Least cost power planning: case study of Maharashtra state

Abstract

The power sector in India and other developing countries is engulfed by many crises, viz., capital, environmental and social crises. Of these, the capital crisis is the most talked about. But little has been done to address the root causes of this crisis. This paper, through a case study of Maharashtra state (in western India) demonstrates that integrating DSM options and decentralised generation in power planning can afford substantial relief from the capital and environmental crises. An integrated least cost plan (LCP) is developed for Maharashtra for the decade 1991–2001. The results of LCP are compared with those of the conventional plan. This work has derived inspiration and benefited from the DEFENDUS plan developed by Amulya K.N. Reddy and others for Karnataka state. Official energy demand forecasts suffer from numerous problems, such as opaque methodology and socially unacceptable assumptions regarding sectoral growth rates. Hence, a frozen efficiency (FE) demand forecast has been developed by incorporating the desired development focus. This indicates an energy and power demand growth rate of 6.4% per annum. To meet the incremental demand of 5,278 MW, the FE scenario, in similar fashion to the conventional plan, banks on only centralised supply sources. The capacity addition plan is based on screening curves evolved after detailed costing of relevant supply options. The FE scenario requires a capacity addition of 7,760 MW, with an annual cost of Rs.71.47 billion. The LCP starts off using the FE demand forecast for the terminal year. On the basis of the integrated screening curves, economical demand side management (DSM) and decentralised supply options are chosen. The remaining demand is met by the centralised supply options. About 40% of incremental demand is met by DSM options, 15% by the decentralised generation options and the rest, i.e., 45%, by traditional centralised sources. The total cost of the LCP is Rs. 47.66 billion/yr. Despite meeting the same level of energy services as the FE scenario, the LCP results in 33% saving in the lifecycle cost. The LCP also reduces the use of fossil fuel by the equivalent of 12 million tonnes of coal per year.