Coal will stay strong even as solar shines in India’s energy transition

Coal will stay strong even as solar shines in India’s energy transition

Subject :Environment

Context: Draft National Electricity Plan

Details:

Introduction–

• In India’s energy transition, solar will emerge as a dominant source of energy, but coal is still going to be the mainstay of the country’s energy sector.
• In the coming decade, at least 40% more coal consumption is estimated in India.
• These trends are reflected in the draft version of the National Electricity Plan (NEP) released by the Central Electricity Authority (CEA).

About the Draft NEP report–

• As per the Electricity Act, 2003, the CEA is supposed to prepare a National Electricity Plan once in five years.
• So far, the CEA has prepared three NEPs in 2007, 2013, and 2018-2019.
• The CEA prepares the report in two volumes one addressing energy generation and the other on energy transmission.
• The present draft report talks about estimates of energy generation in the next five-yearand 10-year scenarios.

What the report highlights–

• The draft report says, “Contribution of Renewable Energy Sources (RES) will be around 35.6% of the total energy of the country in the year 2026-27 and 45.09% by 2031-32.”
• It highlights that there is an additional coal-based capacity required till 2031-32, which may vary from 17 GW to around 28 GW.
• This is over and above the under-construction coal-based capacity of 25 GW.

Current Scenario of energy consumption–

• In 2021-22, India’s domestic coal requirement was 678 million tonnes (MT).
• It will increase to 831.5 MT by 2026-27 and 1018.2 MT by 2031-32.
• At present, 51.1% of the total installed capacity in the energy sector in India comes from coal.
• Out of the total 399.49 gigawatts (GW) installed capacity of the country, 236.10 GW comes from thermal, 6.78 GW comes from nuclear and 156.60 GW comes from renewables.

Need for new Thermal Power Plants (TPPs)–

• There was a total of 22.7 GW of coal plants, scheduled for retirement between 2017-22.
• Out of this, only 7.35 GW got retired from the scheduled ones which include 4.5 GW retiring due to old age criteria.
• Now, there is an estimate that 4.6 GW of TPPs will retire between 2022-27.
• Out of 22 GW that were scheduled for retirement, 16 GW of TPPs were those that did not have space to install flue gas desulphurisation (FGD). It is necessary to control sulphur dioxide (SOx) emissions. The majority of these TPPs did not retire. The central government is also extending the deadlines for installing FGD. So, no one should get confused with the government’s intention related to coal.
• Even today, the government is talking about installing 17 GW of thermal power plants in the most conservative scenario and 28 GW in the most optimistic scenario.

Energy transition is on the way–

• Since Independence, India has been focusing on capacity addition to meet the energy demand. In 1947, the country had just 1.36 GW of installed capacity.
• As compared to this, the country’s installed capacity for energy generation was 399.49 GW in March 2022.
• Now, India is not only looking for capacity addition but also focusing on clean fuel to meet its energy demand.
• As per the draft NEP, the country will aim for 865.94 GW of installed capacity at the end of the year 2031-32, and half of this will be from non-fossil fuel sources.
• This is India’s commitment to the global community in the fight against global warming.
• To achieve this, India plans to add 35 GW of coal to its existing capacity by 2031-32.
• Against this, the country plans to add 279.48 GW of solar and 93.6 GW of wind to its existing fleet during the same time frame.

Issues with the transition into Renewable Energy–

• Coal and gas as a mix have been the predominant player so far. Renewable energy contributes only 10% of the total power generation.
• Right now, it is not a problem. When we talk of a grid in which renewables will be 45%, then it will become a problem. We are reducing a reliable source that is coal and replacing it with a variable source that is renewable.
• In this case, grid management becomes a concern.
• Therefore, the country needs reliable resources for energy generation. It can be a hydro or storage battery.
• For the next five years, we have enough hydropower which can take care of these challenges. But beyond 2026, only hydro will not be able to offer that reliability. We need a battery energy storage system (BESS).
• The draft report is clear about it and underlines the fact that the country will need 51 gigawatts of storage capacity by 2031-32.

India’s effort to achieve this goal–

• India is hardly adding 10 to 12 GW of renewable capacity every year. It is not sufficient.
• If the country is serious about its ambition, it needs to add 40 to 50 GW of capacity every year. It needs a huge investment as well.
• The NEP draft report also gives a glimpse of it by saying that a total investment of Rs 3.4 trillion is required for BESS and Rs 12.52 trillion for renewables by 2031-32. 

Under-utilisation remains a concern–

• Though capacity addition remains on top of the energy ambition of the country, proper utilisation of existing capacity (including TPP, gas and renewables) remains a challenge.
• The performance of a power plant is measured by using the plant load factor (PLF).
• This is a measure of the output of a power plant compared to the maximum output it could produce. It means if a power plant has a higher PLF, it is producing more energy also at a lower cost (per unit of electricity).
• The CEA’s draft NEP underlines this bitter fact. About TPPs, it says that once the power station is commissioned, the biggest challenge is to operate the station at a high PLF.
• In 2009-10, the national PLF was 77.5%. Now in 2021-22, the average PLF has declined to 58.87%.
• The draft NEP document foresees further decline and estimates it to reach 55% in 2026-27.
• The PLF of the coal-based power stations in the country has been decreasing steadily over the years.
• The PLF has varied from60.5 % in 2017-18, 60.9 % in 2018-19, 55.9% in 2019-20, 54.6% in 2020-21 and 58.8 % during 2021-22.
• Similarly, the draft NEP talks about gas infrastructure. Gas power plants have been running at a low PLF of around 23%.
• The low PLF is not due to a lack of gas pipeline infrastructure, but due to the unavailability of cheap sources of natural gas.
• Though, it claims that there will be improvement after that and the PLF of thermal power plants will be about 62% in 2031-32. But, it does not give any explanation of how it is going to improve.