Power Plant Industry

Power plant projects involve massive funds and there timely completion and operation is a crucial factor from the management point of view.Currently the major successful players in this field are Central and State owned PSU companies and a major, most successful EPC Project company is BHEL . Power plant designing and project planning and execution by PSU companies is a typical process and has its own pros and cons.

As a thumb rule , the cost estimation of a typical 500MW coal based thermal power plant is Rs.4 crore per mega watt.Thus the cost estimate for a 500MW coal based thermal power plant is Rs.2000 crore approximately.Generally to reap the benefits of Cost of Economy it is a practice that two units of 500MW each are installed in a set.This helps to economise many common utility services like

1.Raw water/cooling water pumping station o be established at a source like river,lake/reservoir etc.

2.Construction of a common stack (chimney).A 500 MW unit requires a chimney height of minimum 278m.

3.Coal transportation/Handling facilities from mines to the plant site.The most common method being currently used is a dedicated railway line and privately owned wagons and locos.Further this coal is to be stored and processed so as to feed in the boiler.

4.Water treatment facilities . Thermal Power plant process involves steam generation from Demineralised water(DM water).For this the power utilities establish their own dedicated DM plant.

5.A common switchyard and power conveying system to the grid.

6. A host of other facilities like Inventory & Material management services, administrative services , an elaborate security system, residential complex for employees etc.

Important planning considerations

Before setting up a power plant following resources are ensured through proper agreements

1. Power purchase agreement with potential buyers or Power distribution companies.

2. Ensured supply of coal from a government or private mine , for typically 20 years or more.

3. Availability of required quantity of water supply from the local authorities.

4. Land acquisition and related issues.This  can be practically a cumbersome and time consuming activity.It essentially involves high level government office-bearers and the issue of land compensation to the native people is generally a  very tricky process.

After addressing  these basic minimum issues a company can proceed ahead towards EPC contract awarding and further activities.

The Process of Power Generation

A coal based thermal power plant generates steam from Demineralised Water (DM water).This steam at a temperature of 540 deg C and a pressure of 170 kg/cm2  is fed to the steam turbine.The steam turbine drives a generator which produces electricity of typically 16000A at around 15000 volts AC.This voltage is further stepped up to 400KV AC and fed to the power distribution grid.Now a days DC power distribution has emerged as a more economical option.However the price paid for this is higher set up cost for DC power distribution network.Power distribution and grid management is generally done by a separate company .

The Power Business

Power generation companies sell the generated electricity to the Power Distribution company.At present Power Grid Corporation of India Ltd (PGCIL) is the single largest power distribution company in India.It has a network distribution  throughout India.In addition to this State Power Transmission Companies have their own localised networks.Various private sector industries and State Power Transmission Corporations buy electricity from PGCIL. Thus the electricity generated by Power Generation companies is traded twice (first by PGCIL and next by State Power Transmission Companies) before it reaches the end customers.