CENTRAL ELECTRICITY REGULATORY COMMISSION

NEW DELHI

Petition No: 144/MP/2017

Coram:
Shri P.K. Pujari, Chairperson
Dr. M.K. Iyer, Member
Shri I. S. Jha, Member
Date of Order: 9th April, 2019

In the matter of
Petition under Central Electricity Regulatory Commission (Indian Electricity Grid Code)
(Fourth Amendment) Regulations 2016 and Central Electricity Regulatory Commission's
DOP on Reserve Shutdown and Compensation Mechanism dated 5.5.2017 for seeking
upward revision of the Technical Minimum fixed for schedule of operation of NLCIL lignite
based Generating Stations (TPS I Expn, TPS II stage 1 & 2, TPS II Expn) and other related
issues.

And

In the matter of

NLCIL
(a joint venture of NLC & TANGEDCO)
Harbour Estate, Tuticorin-628004 …. Petitioner

Vs.

1. Tamilnadu Generation and Distribution Corporation Limited

NPKRR Maaligai, 144,
Annasalai, Chennai – 600002

2. Kerala State Electricity Board

Vaidyuthi Bavanam, Pattom
Thiruvananthpuram – 695004

3. Puducherry Electricity Department

137, NSC Bose Salai
Puducherry – 605001

4. Power Company of Karnataka Limted

KPTCL Complex, Kaveri Bhawan
Bangalore – 560009

5. APTRANSCO / APPCC,
Vidyut Soudha, Khairatabad,
Hyderabad - 500 082

6. TSTRANSCO / TSPCC,
Vidyut Soudha, Khairatabad,

Order in Petition No. 144/MP/2017 Page 1 of 25

Hyderabad - 500 082

7. Southern Regional Load dispatch Centre,

Power System Operation Corporation Ltd.,
29, Race Course Cross Road,
Bengaluru – 560 009.

8. Southern Regional Power Committee,

29, Race Course Cross Road,
Bengaluru – 560 009 …Respondents

Parties present :
Shri M.G. Ramachandran, Advocate, NLCIL
Ms. Ranjitha Ramachandran, Advocate, NLCIL
Ms. Anushree Bardhan, Advocate, NLCIL
Shri J. Dhanasekaran, NLCIL
Shri K. Ravikumar, NLCIL
Shri S. Vallinayagam, Advocate, TANGEDCO
Shri Ashok Rajan, SLDC

ORDER

The present petition has been filed by the Neyveli Lignite Corporation of India

Limited (hereinafter to be referred as (“the Petitioner”) seeking upward revision of the

Technical Minimum fixed for schedule of operation of NLCIL lignite based Generating

Stations. The Petitioner has made the following prayers:

a) To review the Technical Minimum of 55 % of MCR loading or installed capacity of a

generating unit, fixed and consider revising the same for the lignite fired Stations of
NLCIL under power to remove difficulties and Power to relax as follows to ensure
reliable, safe and stable operation of the units on a sustained basis:
 TPS- I Expansion Units: Technical minimum is to be fixed at70% MCR.
 TPS-II, Stage-1 & Stage-2 Units: Technical minimum is to be fixed at
70% MCR.
 TPS II Expansion Units: Exemption may be granted from technical
minimum operation.
 NLCIL Power Plants should be exempted from Reserve shut down
provision.
b) To consider the URS sold in market shall be treated independently and
allowed over and above the technical minimum schedule of 70%.

Order in Petition No. 144/MP/2017 Page 2 of 25

Submission of the Petitioner

2. The petitioner has submitted as follows:-

(a) The implementation of Central Electricity Regulatory Commission (Indian

Electricity Grid Code) (Fourth Amendment) Regulation, 2016, which provides for

technical minimum of 55 % is affecting the reliability of operation of Units of the

Petitioner’s power plants due to resultant unstable conditions.

(b) Provision of fuel oil support leads to mixed firing and this is injurious to the

furnace in the long run, as slagging on the furnace gets accelerated due to this and

use of water lancing is also not possible during low load operation of the Unit.

(c) As a result of lower utilization of lignite for power generation, utilization of

linked mines capacity of the petitioner is getting affected, resulting in huge revenue

loss to the petitioner.

(d) To mitigate the effects of low load operation of Units, reserve shut down of the

Units can be taken but, this affects the performance of the Units in the long run, as

these Units are not designed for frequent shut down and start up.

3. The Petitioner has further submitted that its pulverized lignite fired plants i.e.

Thermal Power Station II – Stage I (3 x 210 MW), Stage II (4 x 210 MW) and Thermal

Power Station I Expansion (2 x210 MW) are also facing following technical problems

encountered during low load operation :-

(a) Four (4) Mills need to be kept in service while operating the Unit at low loads,

as three (3) Mill operations will lead to Unit tripping in the event of tripping of any one

mill. With the necessity to operate the Units at low load on a continuous basis due to

URS schedule given by beneficiaries in most of the time blocks of the day, operating

the Unit with 3 mills in service warrants fuel oil support, as otherwise, this will lead to

tripping of Unit on any slightest disturbance. This results in mixed firing for prolonged

Order in Petition No. 144/MP/2017 Page 3 of 25

 durations and this leads to formation of slagging on the furnace walls. Water lances

also could not be taken into service during low load conditions due to furnace

pulsations. Further, shifting of fire ball in the furnace also occurs due to operation of

less number of mills, leading to instability.

(b) Single stream operation could not also be followed due to difficulty in ramping

up the load when there is requirement as per schedule and unreliable operation of

the Unit, as tripping of any equipment (Fan, mill etc.,) will lead to Unit tripping.

(c) Increase in mill outlet temperature also leads to unsafe operation. Lignite is

dried in the mill using hot flue gas using flue gas drawn from the furnace through

Resuction duct due to self ventilation of the beater wheel Mill and the temperature of
o
the lignite – gas mixture is to be maintained at 120-180 C as per OEM

recommendation. Hot air is used to reduce the flue gas temperature so as to control

the After Mill Temperature (AMT). The air admission has to be kept at optimum level

so as to maintain the oxygen levels at safer limits to avoid pre ignition and possible

explosions in the mill outlet duct. When the lignite flow is reduced, AMT goes beyond

the limits, resulting in unsafe operation and endangering safety. The vibration levels

in the mill also go high because of the increase in AMT.

(d) There are restrictions in use of Water Lances, which is used for furnace

deslagging. Water jet at a pressure of minimum 18 Ksc is sprayed on to the furnace

walls to remove the slag deposits. This process is unique for only Lignite Fired

Boilers. At low loads, heavy fluctuations develop in the furnace if water lances are

taken into service, leading to furnace instability as water quenches the fire ball and

eventually results in tripping of the Unit. Since technical minimum schedule is given

for most of the time blocks, the water lances could not be pressed into operation. If

water lances are not operated for a few days continuously, heavy deposition of slag

Order in Petition No. 144/MP/2017 Page 4 of 25

 takes place on the furnace walls as well as at the Mills Resuction Duct Mouth.

Dislodging of this heavy mass of slag from furnace subsequently using water lance

and fall of the same from heights result in damages to furnace hopper (S panel area)

and bottom ash handling systems like After Burning Grates and slag conveyor, which

are located below the furnace. Fall of heavy mass of slag had created explosions in

the Slag bath in the earlier days and repeat of the same cannot be ruled out if the

present situation continues. Unit has to be eventually stopped for attending to the

above problems.

(e) Low load operation results in furnace instability because of flame failure,

leading to eventual tripping of Unit on Fire ball protection, even under optimised air

flow condition. The turbulence created for effective combustion of pulverized lignite

in tangential firing is uncontrollable when the fuel/air mixture is lean, especially

during tripping of running mill/feeder. The after effect on such occasions is violent

due to spontaneous combustion of lignite particles at other elevated locations. In

other words, there is no more combustion but only explosion. Such incidences are

unpredictable and the only effective way to control this is to take precautionary steps.

Hence oil burners are necessarily to be taken into service to ensure fireball/furnace

stability, resulting in avoidable mixed firing.

(f) Mixed firing on a continuous basis, coupled with non-operation of water

lances, leads to slag formation in the furnace.

(g) Keeping RGMO in service during low load operation also causes difficulties.

Any sudden increase / decrease in load / lignite flow affects the furnace stability very

much.

(h) Reserve shut down of Unit(s) will lead to further under-utilisation of lignite

mines feeding the Power Plants. Moreover, the Units are designed for base load

Order in Petition No. 144/MP/2017 Page 5 of 25

 operation only and frequent shut down / start up will tell upon the performance of the

Units in the long run.

4. The Petitioner has submitted that apart from the aforesaid problems, the following

additional station specific technical problems are being faced in different Plants of Petitioner

during operation at technical minimum load:

(a) Technical problem specific to Thermal Power Station I Expansion ( 2 x

210 MW):- HRH temperature goes as low as 520 degree celcius even with no RH

spray. Sustained low operation of the Unit will damage the LP Turbine last stage

blades in the long run.

(b) Technical problem Specific to Thermal Power Station II Stage I & Stage

II: Increased RH & SH attemperation flow and furnace temperature due to possible

furnace fouling effect.

(c) Technical problem Specific to TPS II Expansion: The petitioner w.r.t. TPS

II Expansion has submitted that this station has Circulating Fluidised Bed

Combustion (CFBC) boilers of 250 MW rating which are the first of its kind in the

country. After overcoming numerous technical problems faced in these boilers, only

from 4th quarter of 2016-17, we are able to run the Units at more than 200 MW and

the availability of the Units is also showing steady improvement. The quantum of

refractory used in the boiler is more than 5000 Tonnes and because of the constant

circulation of hot bed materials along with lignite, many peculiar problems are being

faced in these boilers compared to conventional PF fired boilers. Varying the load as

per schedule and lowering the load up to Technical Minimum schedule pose lot of

technical problems and some of them seriously affect the safe operation of the

boilers. Variations in critical parameters are encountered, affecting the stable

operation of the boiler. Any outage of the Unit due to any small disturbance results in

forced outage of Unit for a minimum period of 15 days. Since, more time is required

for the cooling of refractory for the people to enter inside to take up the works.
Order in Petition No. 144/MP/2017 Page 6 of 25
 Depending upon the location of the problem, dismantling / recasting of refractory

also becomes necessary and in which case, outage time is still higher. The

difficulties being faced are summarized as under:

i. High Combustor Differential Pressure (DP) : While reducing the

firing of lignite, the Combustor differential pressure increases, affecting the

fluidization of the bed material and disturbing the evaporation. The high

differential pressure also reduces the primary air flow through nozzles and

sometimes completely blocks the air flow, resulting in fire out in boiler. High

DP also leads to shifting of bed material from one pant leg to another,

affecting the combustor stability. To normalize the above situation and to re-

establish the primary air flow, huge quantity of very high hot bed material has

to be drained directly through combustor drain to atmosphere, leading to very

unsafe operation endangering the safety of the nearby equipment and also

people working around. If DP in the combustor is not reduced by draining the

material, lignite feeders will trip, leading to Unit tripping. During normal

operation, combustor DP is controlled by draining the bed material through

ash coolers.

ii. Non-Fluidization of Fluidized Bed Heat Exchanger (FBHE) & Low

SH/ RH steam temp: The SH and RH coils are located in the Fluidized Bed

Heat Exchangers (FBHEs) in the boiler of TPS II Expansion and there are 4

FBHEs per boiler. During reduction of firing while ramping down, non

fluidization of combustor affects the circulation of hot bed material through

FBHE and this causes disturbances in the fluidization process in FBHE, which

in turn lowers SH / RH steam temperature. Ramping down specifically affects

RH steam temperature, which goes as low as 486 deg C even at 165 MW

iii. High SH/ RH Tube Metal Temperature:- The partial load operation

often raises SH/RH tube metal temperature. Frequent variation in firing

Order in Petition No. 144/MP/2017 Page 7 of 25
 causes thermal stress in SH/RH coils, resulting in tube failure and the

restoration time for any outage is normally minimum 15 days.

iv. Refractory failure:- Frequent variation in firing causes thermal shock

in refractory material (5000T) resulting in failure of refractory and dislodging

from its position. This in turn leads to loss of heat due to radiation. Failure of

refractory in FBHEs results in penetration of bed material through damaged

refractory voids causing erosion of Super heater and Re heater tubes, ending

in tube leakage which warrants forced outage of Boiler. Any repair of coils in

FBHE takes minimum of fifteen days including cooling and repairing of

pressure parts and refractory.

v. Lower Ramping Rate: During ramping up also, load could be raised

only for 3 to 4 blocks and thereafter firing could not be raised continuously due

to faster rise in temperature in combustor, cyclone and back pass. Further,

increase in back pass temperature also leads to increase in Steam Cooled

wall temperature, leading to eventual tube puncture and shut down of the Unit.

vi. In addition to the above Low load operation results

(a) Increase in Heat rate.

(b) Reduction in Boiler Efficiency.
(c) Increase in auxiliary consumption.
(d) Increase in specific fuel consumption.
(e) Heavy shock in refractory lining
(f) High strain in Pressure parts due to increase of metal
temperature in SH/RH tubes since these are of high chrome material
A 213 T91.

5. The petitioner regarding under-utilization of Neyveli Pit head mines has submitted as

under:

(i) NLC being an integrated mine-cum-power company, scaling down of

generation in the thermal power plants due to technical minimum necessitates

Order in Petition No. 144/MP/2017 Page 8 of 25

 significant reduction in the lignite production resulting in decrease in the capacity

utilization of the linked mines.

(ii) Since the coming in vogue of technical minimum of 55%, heavy surrender of

power by the beneficiary States of the Southern Region is being experienced

resulting in heavy back down of generation.

(iii) If capacity utilisation of Neyveli mines becomes lesser than 85%, there will be

under recovery of lignite cost as the annual fixed charges of lignite cost is recovered

at 85 % of capacity utilization of Neyveli mines.

(iv) Lignite cannot be transported over long distances as it is susceptible to

spontaneous ignition and hence has to be consumed at the point of excavation.

(v) Due to issues in surrender of power by the beneficiary States, full quantum of

power is not made available to the Generator before hand to undertake trading. This

is also resulting in under utilization of available thermal capacity and is getting

wasted.

(vi) Under the above circumstances scaling down the technical minimum to 55 %

would result in enormous reduction of power generation by NLCIL Power Plants vis –

a vis lignite production, which ultimately would lead to under utilisation of mines and

under recovery of lignite cost and cascading impact on the financials of the

Company.

6. The petitioner has submitted that, the Petitioner had made a presentation to the

Central Commission during the process of amendment of the Grid Code on the technical

difficulties that the Petitioner’s power plants would face due to reduction of technical

minimum to 55% of installed capacity. In this regard the Petitioner had also filed a Petition

no 132/MP/2016, seeking upward revision of the Technical Minimum fixed for operation of

Order in Petition No. 144/MP/2017 Page 9 of 25

Central Generating Stations and Inter-State Generating Stations. However the Petition was

withdrawn by the Petitioner, but a detailed representation dated 13.12.2016 to that effect

was made to the Commission.

7. Sale of URS in Market:- Further, the petitioner for the sale of URS in market has

submitted that as facilitated by Tariff Policy, ISGSs are permitted to trade the URS power of

beneficiaries in the Power Market. Quantum of URS Power traded in the Power exchange

is included by the RLDCs while notifying the Technical minimum schedule, and this defeats

the very purpose of the Tariff Policy which facilitates trading of surplus power. The

petitioner has prayed to the Commission that URS sold in the market should be treated

independently and allowed over and above the technical minimum schedule of 70%.

Replies and Rejoinders

8. The respondent TANGEDCO vide affidavit dated 18.9.2017 has submitted that as

per the Notification dated 19.5.2016 of the Ministry of Power, the Central Generating

Stations are given the option of sale of un-requisitioned power at the power exchange due

to surrender of power by the State Utilities and TANTRANSCO has given “No objection

Certificate" to the Central Generating Stations for sale of URS power in the power

exchanges. Further, on one side the Central Generating Stations are benefitted by

collecting the capacity charges from the beneficiary utilities according to the share allocated

in the respective generating station, on the other, by sale of URS power through

exchanges, the Central Generating Stations are once again getting the capacity charge and

energy charge from 3rd party purchasers. In other words, the CGS by selling URS power

benefits itself of double capacity charges in addition to the energy charge.

9. The respondent no.7 SRLDC vide affidavit dated 10.2.2018 has submitted that the

request of NLCIL for raising the technical minimum to 70% was already raised during the

Order in Petition No. 144/MP/2017 Page 10 of 25

feedback on draft fourth amendment to the Grid Code and the Commission after

considering the views of all stakeholders has decided the technical minimum of 55%. The

technical minimum of 55% is very helpful to the system operator in managing the grid as

well as managing the growth of renewable energy variation and unexpected demand

variation. SRLDC has further submitted that technical minimum of 55% may be maintained

and has requested to treat the URS sold in the market as part of technical minimum only.

10. The Petitioner, vide affidavit dated 20.2.2018 in its rejoinder has submitted that

inferior quality lignite power stations need to be considered due to unique nature of Modus

operandi and technical difficulties and further reiterated its contention that URS sold in the

market shall be treated independently and should be allowed over and above the technical

minimum schedule of 70%.

Response of CEA and replies of respondents on CEA report

11. The Commission referred the issues raised by the Petitioner to CEA vide letter dated

26.3.2018, seeking suitable advice. The CEA vide its report dated 12.9.2018 on upward

revision of the Technical Minimum of NLCIL's thermal generating stations has given it’s

recommendations supported with analysis.

12. The final recommendations of CEA are as under:-

(i) CERC notified the 4th Amendment to CERC (Indian Electricity Grid Code)

Regulations, 2010 on 06.04.2016 vide which technical minimum was fixed to 55%

MCR of the Thermal units operating with coal and lignite as primary fuel.

Subsequently, CERC vide order dated 05.05.2017 notified the Detailed Operating

Procedures on reserve shutdown mechanism, due to part load operation and

multiple Start/Stop of the units consequent to implementation of technical minimum.

(ii) The specific technical aspects of pulverized lignite based plants having

bearing on technical minimum load have been examined in detail including design

Order in Petition No. 144/MP/2017 Page 11 of 25

 aspects, constructional features, OEM recommendations, operational practices etc.

and the same are indicated in enclosed Appendix-1 (along with its annexures).

(iii) Based on consideration of factors given in Appendix-1 including operational

issues brought out M/s NLCIL during visit in CEA officials to their plant, survey of

international literature/ studies on the issue, we are of the opinion that M/s NLCIL

may be allowed to operate its conventional pulverized lignite fired units at the

technical minimum load of 65% MCR vis-à-vis that set at 55% MCR for coal based

plants. However, if in future, the technical minimum load of coal based power plants

is set below the present level of 55% MCR, the technical minimum load of NLCIL’s

lignite based power plants shall also be considered for appropriate reduction from

the present proposed 65% MCR.

(iv) Regarding NLCIL TPS-II (Expansion) 2x250 MW which is based on CFBC

technology, it is stated that these are the first set of 250 MW CFBC units installed in

the country and modifications are being carried out by them to improve their

performance. The detailed aspects in this respect are indicated in enclosed

Appendix-2 (along with its annexures). They have indicated that a time period upto

30.06.2019 is required for completing the modifications and test the sustainability of

operation of both the units. Based on consideration of the factors indicated in

Appendix-2, the request of NLCIL for exemption from compliance of technical

minimum load of 55% for these units upto 30.06.2019 seems to be reasonable. The

same is recommended to be favourably considered by CERC.

13. CEA has given its further analysis /observations on upward revision of the Technical

minimum from 55% to 70% in respect of NLCIL's pulverized lignite fired thermal generating

stations and CFBC boilers stated as follows:-

14. Considering the GCV and the moisture content, the design conditions of fuel for

lignite based plants are inferior to that for coal based plants. In comparison to the boilers for
Order in Petition No. 144/MP/2017 Page 12 of 25
indigenous coal which are designed for a typical GCV of 3800 kcal/kg with moisture content

in the range 10- 15%, the design calorific value of lignite on NCV basis is 2350 kcal/kg with

moisture content as 52% for TPS-1 Expansion units, and gross GCV of 2800 kcal/kg with

moisture content of 48.5% for TPS-II, Stage-I units.

15. CEA's standard technical specifications for coal based sub- critical 500 MW units

provide for control range of boiler as 50% TMCR to 100% BMCR. This requirement is

expected to be similar for coal based sub- critical 210 MW units also. The design steam

parameters are to be maintained up to 60% load in case of pulverized lignite power plant

and up to 50% load in case of conventional pulverized coal plants. Moreover, as per the

O&M manual of TPS-II Stage-I main steam, hot reheat steam, cold reheat steam

temperatures shall be controlled within close tolerances between 60 to 100% boiler load.

16. The CEA in comparison to 210 MW conventional coal fired boiler with 210 MW

lignite fired boiler has analysed that low load operation of lignite fired boilers with reduced

number of operating mills results in displacement of the fire ball and has implication of

disturbance to stable operating conditions as compared to conventional coal fired boilers.

Further, the combustion stability gets adversely affected at low load for lignite fired boilers

due to very high moisture content as the flue gas is used for heating the lignite and

transporting it to boiler and there is no regulation on flue gas drawn, however, in

conventional coal fired boilers, air heated by flue gas in APH is used to dry the coal and

transport it to the boiler.

17. The O&M manual also indicates that mill outlet temperature is to be in the range 120

to 180 deg C (140 deg C at 100% MCR). The technical details of mill & lignite burner

system as furnished by NLCIL also indicate that temperature of fuel/ gas mixture at the

classifier is to be maintained within 120 - 180 deg C. Further, on technical constraints of

milling circuit, it has been indicated that if temperature after the mill increases above 180

deg C, the mill must be immediately stopped. NLCIL made a control desk demonstration to
Order in Petition No. 144/MP/2017 Page 13 of 25
CEA on 25/26 May 2018. Initially, the unit was operating at near full load of about 207 MW

with 5 mills in operation and the outlet temperature of the mills was in the range 154-164

deg C. Slowly and gradually load was reduced to 170 MW with 4 mills in operation and mill

outlet temperature increased to the range of 168-180 deg c. The load was further reduced

to 160 MW, the mill outlet temperature was in the range of 140-165 deg c however, the

combustion stability deteriorated with disturbance in the 2 flame scanner. With further

reduction of load up to 135 MW the combustion was very poor and intensity of 3 flame

scanners deteriorated with mill outlet temperature in the range of 146-183 deg c. The

petitioner NLCIL at this juncture has stated that for further reduction of load one more mill

needs to be taken out and oil gun needs to be cut in. However, the same was not

attempted as tripping of any mill on any account would have resulted in tripping of the unit.

18. The CEA in its observations has mentioned various international references which

mention that technical minimum load achievable by lignite fired thermal power plants are

higher than corresponding minimum load achievable by coal based thermal power plants.

19. Considering all the factors given above , CEA is of the opinion that the petitioner

NLCIL may be allowed the technical minimum load of 65% MCR with a condition that if in

future, the technical minimum load of coal based power plant is set below the present level

of 55% MCR, than the technical minimum load of NLCIL lignite based power plant shall

also be considered for appropriate reduction from the present proposed of 65%.

20. CEA in its technical analysis of operation of TPS-II expansion has observed that

from design consideration, there is no limitation in plant operation up to stipulated technical

minimum load of 55%. However, the petitioner NLCIL in its request to CERC has submitted

that they are facing technical difficulties in stabilisation of its units and it would require

exemption from operating the unit under technical minimum till a stable operation level is

achieved. The technical difficulties faced by the petitioner NLCIL are as under:-

Order in Petition No. 144/MP/2017 Page 14 of 25

 (a) Combustor differential pressure – High
(b) Non-Fluidization of Fluidized Bed Heat Exchanger (FBHE) & SH/RH steam
temp, low.
(c) SH/ RH/ Tube high metal temperature
(d) Refractory Failure:
(e) Back Pass Hanger Tube Failures.
(f) Ramping up and ramping down:
(g) Other impacts of low load operation i.e. Heavy shock in refractory lining, High
strain in Pressure parts due to increase of metal temperature in SH/RH.

21. CEA has observed that main problems faced by CFBC based units of NLCIL TPS-II

expansion are increase in combustor differential pressure requiring draining of 860°C bed

material to control the same, significant drop in temperature of HRH steam and disturbance

in Fluidized Bed Heat Exchanger (FBHE) fluidization & drop in its temperature. Although

COD of both the units has been achieved in 2015 (Unit- 1 on 4.7.2015 and Unit- 2 on

22.4.2015), even after 3 years of COD, these units have not been able to achieve the

stable and sustained operation due to various reasons including equipment design

deficiency. The PG test has not been carried out for any unit as yet.

22. As per CEA, there is improvement in the performance of the units over the years.

Modifications are also being carried out in FBHE-coil with the support by BHEL, to improve

the performance. Accordingly, arrangements are also being made to conduct the PG test.

Hence, time is required for the stabilisation of the units.

23. The Commission, on request of respondents shared the report of CEA with the

petitioner and respondents for their comments

Replies and Rejoinders on CEA report

24. TANGEDCO vide affidavit dated 28.12.2018 and 10.01.2019 has filed its reply with

respect to the report of CEA. TANGEDCO vide affidavit dated 10.1.2019 has submitted as

under :

(a) The Commission has notified the Fourth Amendment to Grid Code in 2016

which is binding on the petitioner and cannot be challenged before this Commission.

However, the same can be challenged in the appropriate forum.

Order in Petition No. 144/MP/2017 Page 15 of 25
 (b) On technological aspects of the TPS-II expansion of NLCIL, has submitted

that CFBC technology was adopted by the petitioner for its characteristics of

excellent vertical and lateral mixing and capability of optimum carbon burn out

resulting in high combustion efficiency with simple operation and quick start-up.

However, the TPS-II Expansion has not able to achieve its full capacity from the date

of commercial operation (i.e.) 4.7.2015, till date.

(c) The petitioner is seeking to modify the operational parameters for the purpose

of technical minimum to suit its convenience after the amendment of the Grid Code

following due process of law. In the light of settled law, once the recommendations of

CEA and the comments of all the stakeholders are considered and an amendment

is notified by CERC under Scetion 178 of the Act and the same legislation cannot be

altered to suit a particular generator of Government of India Undertaking relying on

the recommendation of CEA.

25. The petitioner in its rejoinder vide affidavit dated 19.2.2019, has submitted that, the

objections raised by TANGEDCO on the maintainability of the petition is, misconceived as

the Petitioner is not challenging the provisions of Grid Code but it has only sought for relief

from the Commission in exercise of the powers to remove difficulties and power to relax,

which are provided in the Grid Cod itself. Further, the petitioner has submitted that the

report submitted by CEA was after examining all the aspects and difficulties faced by the

generating station during operation, hence, there is no legal ground for TANGEDCO to

challenge the maintainability of the petition filed by NLC.

Analysis and Decision

26. After considering the submissions of the parties , the following issues arise for our

consideration :

Issue No. 1: Whether the present Petition is maintainable?

Issue No.2: Whether any direction is required to be issued pertaining to upward

revision of technical minimum to 70% for pulverized lignite fired plants based in the
technical difficulties faced by the Petitioner?
Order in Petition No. 144/MP/2017 Page 16 of 25
Issue No. 3: Whether any exemption may be granted to generating stations based on
CFBC technology. ?
Issue No. 4 : Whether the Petitioner’s generating station should be made exempted
from Reserve Shut Down provision ?
Issue No.5 : Whether URS sold in the market should be treated as independently
over and above the technical minimum schedule?

Issue No. 1 : Whether the present Petition is maintainable ?

27. TANGEDCO has submitted that the present petition is not maintainable as the

amendment in Grid Code was brought after following the due procedure of giving

opportunities to the affected parties. The review of Technical minimum of 55% MCR of the

generating units is a direct challenge to the Fourth Amendment of Grid Code. TANGEDCO

has further submitted that, the petitioner can challenge the amendment to the Regulation

before the appropriate forum. It has stated that on one hand the Central Generating

Stations are benefitted by collecting the capacity charges from the beneficiary utilities

according to share allocation and on the other hand, they are getting capacity charge and

energy charge from the purchasers by sale of URS power through power exchange. The

Central Generating Stations are adequately compensated and therefore imposition of

compensation charge are the unwarranted burden on the beneficiaries.

28. Regulation 54 and Regulation 55 of the Grid Code deals with "Power to Remove

Difficulty" and "Power to Relax". The said provision have been put in place to cater to the

specific difficulties faced by a particular stake holder including any generator as well

beneficiaries in application of certain regulations. The Power to Relax and Power to remove

difficulties may be exercised in appropriate cases and it does not amount to the

amendment of the Regulation. The Appellate Tribunal in its judgment dated 25.3.2011 in

Appeal No.130 of 2009 (RGPPL V CERC & ors) had held that the power to remove

difficulties is to be exercised when there is difficulty in effecting the Regulations and not

when difficulty is caused due to application of the Regulations. In M. U. Sinai Vs Union of

India (1975) 2 SCR 640, the Hon’ble Supreme Court had held as under:-

Order in Petition No. 144/MP/2017 Page 17 of 25

 “The existence or arising of a difficulty is the sine qua non for the exercise of power. If this
condition precedent is not satisfied as an objective fact, the power under this clause cannot
be invoked at all. Again, the “difficulty” contemplated by the clause must be a difficulty
arising in giving effect to the provisions of the Act and not a difficulty arising all under, or an
extraneous difficulty. Further, the Central Government can exercise the power under the
clause only to the extent it is necessary for applying or giving effect to the Act etc., and no
further. It may slightly tinker with the Act to round off angularities, and smoothen the joints or
remove minor obscurities to make it workable, but it cannot change, disfigure or do violence
to the basic structure and primary features of the Act. In no case, can it, under the guise of
removing a difficulty change the scheme and essential provisions of the Act.”

29. In the present case the Petitioner is facing specific difficulties while operating its

lignite based stations at technical minimum of 55% as notified by the commission for

thermal units and therefore, is seeking relaxation by invoking power of relaxation under

Regulation, 55 and power to remove difficulty under Regulation, 54. It is observed that only

lignite fired thermal stations, are facing technical problems in operating at the technical

minimum of 55%. Therefore, the Commission is empowered to exercise its Power to

Remove Difficulty" and "Power to Relax" under Grid Code based on the merits.

30. We are not inclined to accept the contention of TANGEDCO that the present petition

is not maintainable.

Issue No.2 : Whether any direction is required to be issued pertaining to upward

revision of technical minimum to 70% for pulverized lignite fired plants based in the
technical difficulties faced by the Petitioner ?
31. With regard to the issue of upward revision of technical minimum to 70 % for

pulverized lignite fired plants as prayed by the petitioner based on technical difficulties

being faced by these units of the petitioner, the Commission has observed the following

from the report of CEA:

a) Design conditions of fuel for lignite based plants are inferior to that for coal

based plants. Boilers for indigenous coal are designed for a typical GCV of 3800

kcal/kg with moisture content in the range 10- 15%, the design calorific value of

lignite on NCV basis is 2350 kcal/kg with moisture content as 52% for TPS-1

Expansion units, and gross GCV of 2800 kcal/kg with moisture content of 48.5% for

TPS-II, Stage-I units.

Order in Petition No. 144/MP/2017 Page 18 of 25

 b) The design steam parameters are to be maintained up to 60% load in case of

pulverized lignite power plant and up to 50% load in case of conventional

pulverized coal plants.

c) As per O& M manual of TPS-II Stage-I main steam, hot reheat steam, cold

reheat steam temperatures shall be controlled within close tolerances between 60

to 100% boiler load.

d) Low load operation of pulverized lignite fired boilers with reduced number of

operating mills results in displacement of the fire ball and has implication of

disturbance to stable operating conditions as compared to conventional coal fired

boilers. Further, the combustion stability gets adversely affected at low load for

lignite fired boilers due to very high moisture content as the flue gas is used for

heating the lignite and transporting it to boiler and there is no regulation on flue

gas drawn, however, in conventional coal fired boilers, air heated by flue gas in

APH is used to dry the coal and transport it to the boiler.

e) While in operation, in case temperature after the mill increases above 180

degree celcius, the mill must be immediately stopped. NLCIL made a control desk

demonstration to CEA on 25/26 May 2018. Initially, the unit was operating at near

full load of about 207 MW with 5 mills in operation and the outlet temperature of

the mills was in the range 154-164 deg C. Slowly and gradually load was reduced

to 170 MW with 4 mills in operation and mill outlet temperature increased to the

range of 168-180 degree celcius. The load was further reduced to 160 MW, the

mill outlet temperature was in the range of 140-165 degree celcius. However, the

combustion stability deteriorated with disturbance in the 2 flame scanner. With

further reduction of load up to 135 MW (around 65% MCR) the combustion was

very poor and intensity of 3 flame scanners deteriorated with mill outlet

temperature in the range of 146-183 degree celcius. The Petitioner at this juncture
Order in Petition No. 144/MP/2017 Page 19 of 25
 has stated that for further reduction of load, one more mill needs to be taken out

and oil gun needs to be cut in. However, the same was not attempted as tripping

of any mill on any account would have resulted in tripping of the unit.

f) Accordingly, CEA has recommended as follows with respect to upward

revision of technical minimum for pulverized lignite fired plants:

"Based on consideration of factors given in Appendix-1 including operational

issues brought out M/s NLCIL during visit in CEA officials to their plant, survey
of international literature/ studies on the issue, we are of the opinion that M/s
NLCIL may be allowed to operate its conventional pulverized lignite fired units
at the technical minimum load of 65% MCR vis-à-vis that set at 55% MCR for
coal based plants. However, if in future, the technical minimum load of coal
based power plants is set below the present level of 55% MCR, the technical
minimum load of NLCIL’s lignite based power plants shall also be considered
for appropriate reduction from the present proposed 65% MCR."

33. After consideration of the above observations based on the technical issues as brought

out by the petitioner in the petition and as submitted by CEA in its report, we are of the view

that technical minimum of 55% as per the Fourth Amendment of the Grid Code is not

sustainable for pulverized lignite fired units and is leading to unstable and unsafe operation

with shifting of fire ball and possible tripping of mills/units. Accordingly, the Commission in

line with the recommendation of CEA that technical minimum of 65% may be allowed for

pulverized lignite fired units of NLCIL, allows technical minimum of 65% for TPS-II, Stage-1

& Stage-2 Units and TPS- I Expansion Units of NLCIL.

34. However, CEA in its report has also recommended that if in future, the technical

minimum load of coal based power plants is set below the present level of 55% MCR, the

technical minimum load of Petitioner’s lignite based power plants shall also be considered

for appropriate reduction from the present proposed 65% MCR. In the light of this, NLC

may explore with Original Equipment Manufacturer, the possibilities to run these units at

technical minimum of 55% and below, with suitable modifications if required.

Issue No. 3 : Whether any exemption may be granted to generating stations based on
CFBC technology?

Order in Petition No. 144/MP/2017 Page 20 of 25

35. Regarding NLCIL TPS-II (Expansion) 2x250 MW which is based on CFBC

technology, the Commission, based on difficulties as brought out by the petitioner in the

petition and based on CEA report has made following observations:

a) The CFBC units of NLCIL are the first set of 250 MW CFBC units installed in

the country and modifications are being carried out by them to improve their

performance.

b) During low load operation , the units face following operational problems i)

increase in combustor differential pressure is observed which requires draining of

860°C bed material to control the same, ii) significant drop in temperature of HRH

steam and iii) disturbance in Fluidized Bed Heat Exchanger (FBHE) fluidization &

drop in its temperature.

c) Although COD of both the units has been achieved in 2015 (Unit- 1 on

4.7.2015 and Unit- 2 on 22.4.2015), even after 3 years of COD, these units have not

been able to achieve the stable and sustained operation due to various reasons

including equipment design deficiency.

d) Accordingly, CEA has advised as follows with respect to exemption of CFBC

based TPS-II (Expansion) from technical minimum operations:

"Based on consideration of the factors indicated in Appendix-2, the request of NLCIL for
exemption from compliance of technical minimum load of 55% for these units upto
30.06.2019 seems to be reasonable. The same is recommended to be favourably
considered by CERC."

36. After consideration of the above observations based on the technical issues as

brought out by the petitioner in the petition and as submitted by CEA in its report, we are of

the view that low load operation of CFBC based units of NLCIL is not sustainable as it is

causing operational difficulties as brought out above and leading to low availability and

forced outages. CEA has observed that with the modifications being carried out in FBHE

coil with the technical support of BHEL, trend of improvement in performance has been

Order in Petition No. 144/MP/2017 Page 21 of 25

observed. CEA has finally observed that time is required for stabilization of units.

Accordingly, Commission in line with the recommendation of CEA allows CFBC based plant

of NLCIL i.e TPS II Expansion, exemption from technical minimum of 55% till 30.06.2019.

The Technical Minimum for such plants shall be 65% till 30.06.2019.

37. Regarding the submission of SRLDC that Grid Code limit of 55% may be maintained

in order to have flexibility for accommodating RE generation, inadvertent deviation and

other incidents like abnormal weather conditions etc., it is observed that upward revision of

technical minimum of only specific generators based on the technical difficulties would not

take away the flexibility for accommodating RE generation which is available to system

operators in terms of going down to technical minimum of 55% for all inter-State generating

stations. As such, we do not find merit in the submission of SRLDC.

Issue No. 4 : Whether the Petitioner’s generating station should be made exempted
from Reserve Shut Down provision ?

38. The third proviso to clause (3) of Regulation 6.3 B of the Grid Code reads as under :

“Where the scheduled generation falls below the technical minimum schedule, the
concerned CGS or ISGS shall have the option to go for reserve shut down and in such
cases, start-up fuel cost over and above seven (7) start / stop in a year shall be considered
as additional compensation based on following norms or actual, whichever is lower:”

Unit Size (MW) Oil Consumption per start up (Kl)

Hot Warm Cold
200/210/250 MW 20 30 50
500 MW 30 50 90
660 MW 40 60 110

39. It is observed that on one hand the Petitioner has put forward various operational

issues its generating stations face during low load operation based on which its prayer of

considering technical minimum of 65% has been accepted for its pulverized lignite fired

stations and exemption has been granted to its CFBC generating station and on the other

hand it prays to remain out of reserve shutdown if the scheduled generation falls below the

technical minimum schedule. In this regard, the Grid Code has given option to the

generators for going for Reserve Shut Down, if the scheduled generation falls below the

Order in Petition No. 144/MP/2017 Page 22 of 25

technical minimum schedule. In case the generator decides not to go for RSD and keeps

on operating at the technical minimum, the difference between the actual generation and

scheduled generation would be accounted under DSM mechanism. As such, the prayer of

the petitioner for exemption from RSD is not allowed.

Issue No. 5 : Whether URS sold in the market should be treated as independently
over and above the technical minimum schedule ?

40. The Petitioner has prayed that the URS sold in the market should be treated

independently and be allowed over and above the technical minimum schedule of 70 %. In

this regard the respondent SRLDC has submitted that the URS sold in the market should

be treated as a part of technical minimum only and URS should not be treated

independently as it narrows down the margin to flex the sudden variation.

41. URS Power includes (i) the quantum of power which has not been dispatched by the

power plant owing to the original procurer not dispatching the same; (ii) the quantum of

power which has not been taken within two hours by procurers entitled to exercise their first

right to receive the quantum not dispatched by the original procurer; and (iii) the said

quantum of power not being able to be sold to third parties.

42. In this regard, we are agreeable with the contention of SLDC that URS should not be

treated independently i.e. over and above the technical minimum otherwise it would defeat

the very purpose of allowing the RLDCs/SLDCs to call for operating the generators on

technical minimum to accommodate sudden variation and for accommodating the RE

generation to its full potential. We therefore, hold that URS shall be treated as a part of

technical minimum schedule only.

43. Further, we are not inclined to accept the submission of TANGEDCO that generators

are collecting double capacity charges as well as energy charges by way of sale of URS

power in the market, based on consent of beneficiaries. The clause 6.5 (A) (c) of IEGC (fifth

Amendment) Regulation, 2017 provides as under:

Order in Petition No. 144/MP/2017 Page 23 of 25

 "6.5(A) Scheduling and commercial settlement of energy exchanged under Ancillary
services including Spinning Reserves and URS:

(a).....................

(b)....................

(c) In case of sale of share of original beneficiaries in market by ISGS for which
consent has been given, the realized gains shall be shared between the ISGS and
the concerned beneficiary in the ratio of 50:50 or as mutually agreed by the ISGS
and concerned beneficiary in the billing of the following month. This gain shall be
calculated as the difference between selling price of such power and fuel charge
including incidental expenses.

Provided that such sale of power by ISGS shall not result in any adverse impact on
the original beneficiary (ies) including in the form of higher average energy charge
vis-à-vis the energy charge payable without such sale:

Provided also that, the liability of fixed charge in such cases shall remain with
original beneficiary (ies) as determined in accordance with the Tariff Regulations
notified by the Commission from time to time

44. The provision of Grid Code (Fifth Amendment) Regulation, 2017 clearly provides for

sharing the gains in the ratio of 50:50 in case of sale in open market. It is observed that

provision of sharing of the revenue, earned over and above the fuel cost, with the

beneficiaries takes due care of the interests of the beneficiaries. Hence, the contention of

the TANGEDCO that generating stations are recovering two capacity charges by selling

URS is devoid of any merits.

45. In view of the above discussions, the decisions of the Commission are summarised as

under:

(a) TPS- I Expansion Units: Technical minimum of 65% MCR is allowed.

(b) TPS-II, Stage-1 & Stage-2 Units: Technical minimum of 65% MCR is allowed.

(Provided, with a condition that if in future, the technical minimum of coal based

generating station is set below the present level of 55%, than the technical minimum

load of NLCIL lignite based power plant shall also be revised appropriately.)

(c) TPS II Expansion Units: Exemption is granted from technical minimum

operations up to 30.06.2019.

Order in Petition No. 144/MP/2017 Page 24 of 25

 (d) The prayer of the petitioner that NLCIL Power Plants should be exempted

from Reserve shut down provision is not allowed.

(e) URS shall be treated as a part of technical minimum only.

43. The Petition No. 144/MP/2017 is disposed of in terms of the above.

Sd/- Sd/- Sd/-

(Dr. M.K.Iyer) (I. S. Jha) (P.K. Pujari)

Member Member Chairperson

Order in Petition No. 144/MP/2017 Page 25 of 25