In India’s energy transition, solar will emerge as a dominant energy source, but coal will remain the mainstay of the country’s energy sector.
Over the next decade, at least 40% more coal consumption is estimated in India. These trends are reflected in the draft National Electricity Plan (NEP) released by the Central Electricity Authority (CEA), which provides an overview of India’s ongoing energy transition.
The CEA report estimates a 40% increase in national coal needs in 2031-32. In 2021-2022, 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 India’s power sector comes from coal. Of the total installed capacity of 399.49 gigawatts (GW) in the country, 236.10 GW comes from thermal, 6.78 GW from nuclear and 156.60 GW from renewable energies. The NEP draft indicates that there is additional coal-based capacity required until 2031-32, which can range from 17 GW to around 28 GW. This is beyond the 25 GW coal-based capacity being built.
Talking about the role of thermal power plants (TPPs) in the future, Ashok Sreenivas, coordinator at Prayas, a Pune-based energy think tank, says that a small increase in thermal power capacity may be needed despite the low plant load factor (PLF). ). Energy capacity can be maximized at certain peak times when renewable energy is not available. To meet this demand, additional capacity may be required. It should also be clear that reasonable coal capacity will be retired in the near future.
Interestingly, there was a total of 22.7 GW of coal-fired power plants, which were planned to be decommissioned between 2017 and 2022. Of this total, only 7.35 GW were removed from those planned, of which 4.5 GW due to old age criteria. Now, it is estimated that 4.6 GW of TPP will retire between 2022 and 2027. There is no such estimate for 2027-32.
An expert working with one of the four international accountancy bodies, says that of the 22 GW that needed to be removed, 16 GW of TPPs were those that did not have space to install flue gas desulphurization (FGD). Sulfur dioxide (SOx) emissions need to be controlled.
The majority of these TPPs have not retired. The central government is also extending the deadlines for installing FGDs. So no one should get confused with the government’s intention regarding 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, added the expert, who wishes to remain anonymous.
According to the Electricity Act 2003, the CEA is supposed to prepare a national electricity plan once every five years. To date, the CEA has prepared three PNEs in 2007, 2013 and 2018-2019. The CEA is preparing the report in two volumes, one dealing with energy production and the other with energy transmission. This draft report discusses estimates of energy production in the next five-year and ten-year scenarios. It paints an ambitious picture of the electricity sector and the efforts needed to achieve the objectives.
The energy transition is underway
Since independence, India has focused on adding capacity to meet energy demand.
In 1947, the country had only 1.36 GW of installed capacity. Compared to this, the country’s installed capacity for power generation was 399.49 GW in March 2022. Today, India is not only looking to increase its capacity but also focusing on clean fuels to meet its energy demand. Over the next 10 years, the country plans to add more than double its existing capacity.
According to the draft NEP, the country will target 865.94 GW of installed capacity by the end of the year 2031-32, half of which will come 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. On the other hand, the country plans to add 279.48 GW of solar energy and 93.6 GW of wind energy to its existing park during the same period.
The draft report states that “the contribution of renewable energy sources (RES) will be about 35.6% of the country’s total energy in 2026-27 and 45.09% by 2031-32” .
This added capacity will change the industry, said the expert quoted above. According to him, coal and gas as a mixture have so far been the predominant player. Renewable energies represent only 10% of total electricity production.
“Right now that’s not a problem. When you’re talking about a grid where it’s 45% renewable energy, that will become a problem. You’re reducing a reliable source which is coal and replacing it with a variable source which is renewable.In this case, the management of the network becomes a concern.Therefore, the country needs reliable resources for the production of energy.It can be a hydro or storage battery.For the next five years, we have enough hydropower to meet these challenges. But beyond 2026, hydropower alone will not be able to provide this reliability. We need a battery energy storage system (BESS) The draft report is clear on this and highlights the fact that the country will need 51 gigawatts of storage capacity by 2031-32.
However, he points to another problem with this ambitious goal. India adds just 10 to 12 GW of renewable capacity each year. It’s not sufficient. “If the country is serious with its ambition, it needs to add 40 to 50 GW of capacity every year. It also requires huge investments,” he added.
The draft NEP report also gives an overview by stating that a total investment of 3.4 trillion rupees is needed for BESS and 12.52 trillion rupees for renewable energy by 2031-32.
Underutilization remains a concern
Although adding capacity remains above the country’s energy ambition, the proper use of existing capacity (including TPP, gas and renewables) remains a challenge.
The performance of a power plant is measured using the plant load factor (PLF). It is a measure of the output of a power plant relative to the maximum output it could produce. This means that if a power plant has a higher PLF, it produces more energy also at lower cost (per unit of electricity).
The CEA’s draft PNE highlights this bitter observation. About TPPs, it is said that once the power plant is commissioned, the biggest challenge is to operate the plant at a high PLF. “The PLF of the country’s coal-fired power plants has steadily declined over the years. The PLF varied by 60.5% in 2017-18, 60.9% in 2018-19, 55.9% in 2019-20, 54.6% in 2020-21 and 58.8% in 2021-22” , he adds.
Similarly, the NEP project speaks of gas infrastructure. Gas-fired power plants operated at a low PLF of around 23%, the report said. The low PLF is not due to a lack of gas pipeline infrastructure, but to the unavailability of cheap sources of natural gas.
Regarding peak demand and challenge, it is stated that ER generation could not be fully absorbed due to the shape of the load curve. This is the case when the daytime wind capacity utilization factor (CUF) is 24.08% and the solar CUF is 17.73%.
An expert, on condition of anonymity, explains this by saying that there is a mismatch between supply and demand. Solar and wind energy produce maximum energy when demand is minimum. If you see the power demand pattern, it is high in the evening and in the morning. But energy production peaks in the afternoon. In such a scenario, it is difficult to integrate the generated energy into the grid. In the future, when the capacity of solar and wind energy increases, it will be even more difficult to manage the total electricity production.
As for the TPP and the low PLF, the use of these plants has been in continuous decline for at least a decade. In 2009-10, the national PLF was 77.5%. Now, in 2021-22, the average PLF has decreased to 58.87%. The draft NEP document foresees a further decline and estimates that it will reach 55% in 2026-27. However, he claims that there will be an improvement thereafter and that the PLF of thermal power plants will be around 62% in 2031-32. But, he gives no explanation on how he will improve.
Sreenivas de Prayas says TPPs have a low PLF because the country has added significant coal capacity over the past decade. This is accompanied by weaker than expected demand growth and the growing role of renewables in generation. This led to reduced use of TPPs and therefore lower PLF, he added.
An article published in the International Journal of Energy Production and Management in 2021 also raises these concerns. The author of the article is Alok Kumar Tripathi, Managing Director and Head of L&D-NTPC Regional Learning Institute. He writes that coal capacity seems to have been caught between the inaccuracies of forecasting, the obsession with legacy systems, and the rapid advent of renewables.
In his article, he gives five scenarios where three projects further lower the PLF of the thermal power sector. But, when Mongabay-India approached him, Alok Kumar Tripathi had a different perspective to share.
He says now the situation is changing. For several reasons, the whole world is again considering the addition of thermal energy. In recent months, the way demand has picked up, renewables are not able to match it and that is why thermal energy is once again gaining attention. Today, policy makers around the world are planning to establish new thermal power plants. Regarding the low PLF, he says that TPPs must adapt to renewables as production of these increases or decreases. Due to this imposed flexibility, thermal power plants are suffering and must be compensated, he adds.
His view is also reflected in other reports, from different parts of the globe, on the renewed focus on coal, which increasingly looks like a global trend.
This post was originally posted in mongabay india.