Plant Load Factor

by Bhagyashree Rath, Researcher - Environment and Climate Change

Determining the performance of a power plant can be a complex topic to understand, given the various factors such as availability of fuel/water, installed capacity, the age of the unit, planned outage etc, at play. A brief understanding of different aspects of plant load factor may help in enhancing our knowledge on performance parameters for thermal power plants. The Plant Load Factor is commonly considered as a measure of a power plant’s capacity utilisation.

The Central Electricity Regulatory Commission defines Plant Load Factor as a percentage of energy sent out by the power plant corresponding to installed capacity in that period. For example, if a power plant with an installed capacity of 500 MW operates through the day at its maximum load, the energy generated will be: 500 MW X 24hr = 12,000 MWh.

The energy sent out by the plant when operating at 450 MW for 24 hours will be: 450 MW X 24hrs = 10,800 MWh

Plant Load Factor (PLF): 10,800 MWh ÷ 12,000MWh = 0.9 (90%)

A low PLF is bad for the power plant as it indicates that the plant is not being used to its optimal capacity. This will increase the per-unit cost of the power thus produced, making it unattractive for purchase by Discoms. A higher PLF, on the other hand, will generate a greater total output which will reduce the cost per unit of energy generated. The higher the output, the lesser will be cost per unit. The additional energy produced would also result in an increase in revenue of the plant.

In India, the Ministry of Power has, since the early 90s, used the Plant Load Factor as a metric to check the efficiency of a plant. A PLF norm has been set, and incentives are being given to those producers who produce power in excess of the norm. Currently, the flat rate payable for excess generation corresponding to the scheduled generation is 50 paise per kWh as specified in regulation 36 (B) of CERC regulations.

In the last decade, India’s Plant Load Factor for coal-based power plants has seen a steady decline. Here’s a look at the annual average PLF for coal and lignite-based plants from 2009-10.

*Until October 2018. Source: CEA

In the same period, the deficit that the country faced in power supply- including contributions from renewable sources- has reduced from 10.1% to 0.6%. This drastic fall in the PLF percentages over the years is attributed to the following:

• Lack of Fuel Supply Agreements to provide steady and affordable domestic coal
• Significant capacity addition in the same period
• The high cost of imported coal
• Lack of long-term Power Purchase Agreements with the Discoms for off-take of power
• Increase in availability of affordable power from wind, solar and hydel power, leading to lesser demand of power from coal

The decline is more observable in the private sector, which largely cites a shortage of coal as the reason for reduced power generation. This has been acknowledged in NITI Aayog’s Draft National Energy Policy, (Draft National Energy Policy, 5.4.2 & 8.7.4) which notes that the falling PLF is threatening the government’s power augmentation agenda. “The issue of meeting full coal demand of the power plants with FSAs (fuel supply agreements) needs to be resolved so that these plants are able to receive their full coal demand, and raise their PLFs. CIL will prioritise its allocation to these power plants..”

Across the world, it is being observed that as coal plant capacities are being added, the PLF seems to take a hit. In 2016, the average PLF globally was 52.5%, with China and the EU slipping well below the average, at 49% and 46% respectively. The shift in energy policies worldwide, necessitated by a commitment to reduce the emission of greenhouse gases, has led to reduced production from coal-based power plants.