NON-CONVENTIONAL ENERGY RESOURCES AND UTILISATION 101
2.22 OTHER TECHNOLOGY
2.22.1 Liquid Fuel
The recent controversies of tariff of IPPs in operation have been an eye opener to the issue of fuel
selection. Several experts in hindsight have also suggested that liquid fuel was a wrong selection for
projects such as DPC. However, this reasoning is too narrow and skewed in its interpretation of liquid
fuels. Naphtha is definitely the least favorite and the most prohibitive fuel world-wide and by definition
and characteristics, it does belong to the liquid fuel category. There are other veritably successful alter-
native liquid fuels like furnace oil, LSHS, etc. where power plants are viable in the liquid fuel mode.
Many liquid fuels based IPPs are now without ambiguity opting for safest bet and the least price
volatile liquid fuel that is furnace oil. Furnace oil has its tremendous advantages. With an average gross
calorific value of 10,200 Kcal/Kg furnace oil is a potent low grade fuel for energy generation. In com-
parison to more refined and primary fuels like naphtha and natural gas, furnace oil has no other commer-
cial value except being combusted for energy generation.
Crude oil prices has been floating between $55 to $65 per barrel at the current international oil
pool (Sept.—2005). It proffers excellent potential to have low generation cost of power. With an effec-
tive and time-tested technology of power generation with heavy fuel operated diesel engine based power
plants, furnace oil will indeed be the preferred alternative for liquid fuel IPPs. Further, establishing
captive power plant and IPPs on DG technology has very low gestation period in comparison to gas
turbine or steam turbine based combined cycle power plants. The detractors of DG technology and
using heavy fuel may trump up the bogey of high sulphur content. But that is not a very contentious issue
as government is now clearing IPPs and allowing them to use furnace oil as fuel with sulphur £ 2% by
weight.
For that matter, even LSHS or its Indian version LSWR if used will account for even much lower
sulphur content » 0.5% to 0.8%. The pollution control norms can be met for combusting both of the
above heavy fuels in the diesel engine power plants by constructing chimneys of adequate height for
exhaust gases’ exit. The furnace oil as well as LSHS has no problem of availability. Fuel storage, han-
dling and transportation are far simpler and easy to establish. It is also expected that over a period of
time, the most predictable and stable price levels will be for the furnace oil.
It also gives the opportunity for having lower levels of import costs on account of fuel while
using furnace oil. All these will help the government to keep the fuel import bills for the future at lower
levels, which is desirable. Under the circumstances, all medium and small IPPs can get their projects
started if they decide to switch over to furnace oil based DG power plants. Many promoters of IPPs have
already embarked on this course. It is a good sign at least a few, if not all, have realised that it is more
prudent and time saving to use most technically and commercially viable fuel for liquid fuel based
power generation. The IPPs can also freely source their liquid fuel requirements and no fuel linkage is
prerogative for sanctioning the project.
The most contentious issue was Naphtha. This fuel was primarily being imported to fulfil the
needs of the fertiliser and petrochemical industries as feedstock. Why at all it was considered for energy
generation remains an enigma. Government experts thought that locally produced Naphtha, which was
in surplus, could serve the needs of the liquid fuel based power plants. But the grade produced locally is
HAN (High Aromatic Naphtha), which could not be used for combustion in gas turbines which needed
LAN (Low Aromatic Naphtha).
This reflected a cruel lack of understanding of the technology of gas turbines used as power
generation machines and their fuel application part. This policy continued till it reached a dead end.