Policy Wise: India’s Power Sector

A clean energy transition plan for India

Note4Students

From UPSC perspective, the following things are important :

Prelims level : HELE power plants

Mains level : Paper 3- Clean energy transition plan

Context

India has a long way to go in providing electricity security to its people since its per capita electricity consumption is still only a third of the global average.

Ensuring energy security and role of coal

  • Energy security warrants the uninterrupted supply of energy at affordable prices.
  •  Thanks to the Electricity Act of 2003, the installed coal-fired thermal power plant (TPP) generation capacity in India more than doubled from 94 GW to 192 GW between March 2011 and 2017.
  • This sharp increase in the installed capacity has enabled the government to increase per capita electricity consumption by 37% while reducing peak demand deficit from 9.8% (2010-11) to 1.6% (2016-17). 
  • TPPs contributed 71% of the 1,382 billion units (BU) of electricity generated by utilities in India during FY 2020-21 though they accounted for only 55% of the total installed generation capacity of 382 GW (as of March 2021).
  • Coal, therefore, plays a vital role in India’s ongoing efforts to achieve Sustainable Development Goal 7, which is “to ensure access to affordable, reliable, sustainable and modern energy for all”.

Renewable energy utilisation issue and implications for consumers

  • While variable renewable energy (VRE) sources (primarily, wind and solar) account for 24.7% of the total installed generation capacity, as of March 2021, they contributed 10.7% of the electricity generated by utilities during FY 2020-21.
  • However, the ramp-up of VRE generation capacity without commensurate growth in electricity demand has resulted in lower utilisation of TPPs whose fixed costs must be paid by the distribution companies (DISCOMs) and passed through to the final consumer.
  • The current level of VRE in the national power grid is increasing the cost of power procurement for DISCOMs, leading to tariff increases for electricity consumers. 
  • Therefore, India must implement a plan to increase energy efficiency and reduce the emissions of carbon dioxide (CO2) and airborne pollutants from TPPs without making power unaffordable to industries that need low-cost 24×7 power to compete in the global market.

Way forward: time-bound transition plan

  • Phasing out: The plan should involve the progressive retirement of TPPs(unit size 210 MW and below) based on key performance parameters such as efficiency, specific coal consumption, technological obsolescence, and age.
  • Increasing utilisation: The resulting shortfall in baseload electricity generation can be made up by increasing the utilisation of existing High-Efficiency-Low-Emission (HELE) TPPs that are currently under-utilised to accommodate VRE and commissioning the 47 government-owned TPPs.
  • In addition, the Nuclear Power Corporation of India Limited (NPCIL) is also constructing 11 nuclear power plants with a total generation capacity of 8,700 MW that will supply 24×7 power without any CO2 emissions.
  • The combined thermal (220 GW) and nuclear (15 GW) capacity of 235 GW can meet the baseload requirement (80% of peak demand) during the evening peak in FY 2029-30 without expensive battery storage.
  • The optimal utilisation of existing and under-construction HELE TPPs with faster-ramping capabilities and lower technical minimums also facilitates VRE integration.
  • Since HELE TPPs minimise emissions of particulate matter (PM), SO2, and NO2, the transition plan offers operational, economic, and environmental benefits including avoidance of sustenance Capex and FGD costs in the 211 obsolete TPPs to be retired besides savings in specific coal consumption and water requirement leading to reductions in electricity tariffs and PM pollution.

Conclusion

The implementation of transition plan will enable India to safeguard its energy security and ensure efficient grid operations with lower water consumption, PM pollution, and CO2 emissions.

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