India is quickly moving toward Dimethyl Ether (DME) as a powerplant fuel as part of a Joint Collaboration Agreement for the development, production and marketing of DME as a multi-application fuel for India. Progress of the Joint Agreement was reviewed in DME Newsletter Number 4 issued by TNO Automotive on behalf of the International Energy Agency Implementing Agreement on Alternative Motor Fuels. In December BP Amoco along with partners Indian Oil Corporation Limited, the Gas Authority of India Limited and the Indian Institute of Petroleum, successfully completed Phase I with the issuing of the Techno-Economic Feasibility Report (TEFR) for using DME as fuel for power generation. The TEFR was completed in December 1999, based on an extensive investigation over a period of 1 year by a team of more than a dozen full-time experts in engineering, research, finance, marketing and business development. After reviewing the TEFR, the DME Group determined that the project can be commercially viable and is proceeding to the next phase, which is to complete a Detailed Feasibility Report. The initial activity is a focused marketing effort with power producers and regulators in specific states in India regarding DME sales and purchase terms.
India’s Union Power Ministry is discouraging the use of naphtha as powerplant fuel. DME is calculated to be 6 percent more efficient (kilocalories of fuel consumed per kilowatt-hour of power produced) than naphtha. This benefit, coupled with expected lower maintenance costs, translates to an 8 percent lower cost of generating electricity using DME as compared to naphtha, even when the delivered fuel costs are the same.
In mid-February, three Memorandums Of Understanding (MOUs) were signed by BP Amoco with Indian companies to supply DME as a fuel for powerplants. The companies involved include: PPN Power Generation Company Unit II Pvt. Ltd., Pillaiperumalnallur, Tamil Nadu state; Kannur Power Project Ltd., Kannur, Kerala state; and Siasen Energy Ltd., Puthu Vypeen, Kerala state.
BP Amoco expects to sell some 5,300 tonnes per day of DME in India. For a 300-megawatt powerplant, about 1,770 tonnes per day of DME is required.
PPN Power Generating was given permission in 1999 to double the capacity of its plant in Tamil Nadu state. The company is adding a 330-megawatt, combined-cycle gas turbine powerplant at its current location. The new addition to the powerplant was designed to run on naphtha, which could then be switched later to natural gas.
The window of opportunity for DME was opened even wider in Kerala state with the announcement by Petronet Liquefied Natural Gas (LNG) that there will be at least a 2-year delay in building an LNG receiving terminal at Cochin (Kochi). The company needed at least a 5-year agreement for off-take in order for Petronet LNG to arrange financing for the terminal. The opening of the terminal has been delayed to 2005.
PPN Power Generation has held discussions with Imodco for designing a single-point mooring system to handle DME. PPN Power Generation has requested that BP Amoco prove DME can be used in different makes of turbines. BP Amoco has obtained assurances from General Electric (GE) that DME can be used in GE’s turbines. The company was also looking to find out if DME can also be used in turbines made by ABB, Siemens and Mitsubishi Heavy Industries.
The Kannur Power Project was originally a joint venture between Enron India and K.P.P. Nambiar and Associates for a 513-megawatt, LNG-fired powerplant. Last August Enron announced it was dropping out of the project. K.P.P. Nambiar and Associates has continued to pursue the project and is now looking at DME for the fuel.
Siasen had proposed building a 650-megawatt powerplant, also using LNG as a fuel. However, the company had signed an MOU with Petronet LNG. Without National Thermal Power Corporation agreeing to use LNG, the terminal project was delayed.
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