Coal-fired power plants set to get renewed push
10th july 2018
Coal-fired power plants, often regarded as polluting relics in an era of clean energy, are making a comeback in the government’s thinking as an official study says the rapid growth in solar projects needs to be matched with new investment in steady, 24×7 electricity supply from thermal projects.
A study carried out by the power ministry to determine the right solar-coal mix shows that India’s plan to produce 55% energy from renewable sources by 2030 is overambitious. India would need 850 GW of capacity by 2030, of which solar plants, with storage facility, should not be more than 350 GW. Of around 500 GW estimated capacity addition for renewables, 140 GW will come from wind projects, senior officials aware of the development told ET. Coal, however, will be low at almost the present levels which is a concern.
“The worrying fact is that there is no fresh proposal to set up coal-based capacity for base load,” a government official said. Coal-based plants have a long gestation period of about five years against 18-24 months in case of solar. The country has not seen any major fresh coal based power plant proposal in the last few years but the government’s view until recently was that thermal plants had enough spare capacity that can be utilised when demand rises.
The official said solar energy supply is seasonal and good to meet daytime demand. “But to meet the peak evening demand and the manage supply in months when wind, solar and hydro generation is less, the study showed we will need fresh coal-based capacity,” he said. Analysts agree. As renewable energy is not firm in nature, demand from renewable energy has to be viewed in the context of balancing the grid and providing reliable 24×7 power to consumers, said Vinay Rustagi, managing director at Bridge to India.
“Fifty five percent renewable energy penetration is an extremely ambitious target. Anything close to or in excess of 30% renewable energy penetration requires huge effort in expanding the grid or making it resilient as well as in comprehensive redesign of the regulatory framework. We feel the grid integration issues for RE are being ignored in this rush for new capacity addition. This can lead to grid curtailment (as high as 40% in China and some other countries) and the government needs to be extremely careful in planning renewable energy capacity addition,” he said.
Currently, India has 196-GW coal capacity and about 50 Gw of hydro and nuclear plants. About 51Gw thermal plants are stranded or stressed because of non-availability of fuel, lack of PPAs or under-recovery. While another 23 Gw of under-construction projects are likely to be online in the coming five years. R K Singh, minister for power and renewable energy, on Monday said the share of renewables in India’s installed capacity is set to increase to around 55% by 2030.
India had committed in the Paris convention to shift 40% of its electricity generation capacity to green energy by 2030. It is expected to achieve the target by 2022-23. Besides 227 Gw estimated renewable energy generation by 2022, the renewable energy ministry has prepared a trajectory to tender renewable energy projects—30 Gw of solar and 10 Gw of wind each year till 2028.
Analysts agree. As renewable energy is not firm in nature, demand from renewable energy has to be viewed in the context of balancing the grid and providing reliable 24×7 power to consumers, said Vinay Rustagi, managing director at Bridge to India. Having seen the consequences of mismatch due to explosive growth of thermal in the last decade, we cannot afford another mismatch, said Association of Power Producers director general Ashok Khurana said.
“Looking at the quantum of under-utilised/idling and under construction thermal capacity in system, we need to recalibrate our renewable capacity addition programme pace on grounds of absorption capacity of base/peak power, impact on financial health of distribution utilities and power transmission capability up to last mile,” he said.
Kameswara Rao, leader-energy and utilities at PwC India said, “Not only new base-load capacity is needed, but as the mix shifts to renewable energy, we need to invest in flexible generation such as gas and pumped storage hydro to manage variability. In a sense, the power system needs a balanced diet and skimping on any of these can be expensive.”
The mandatory renewables purchase obligations on states, transmission and duty exemptions, the companies have shifted focus to renewable energy but consumers may have to shell a higher price. “The tariffs of renewable energy projects with storage cannot match that of coal plants close to coal source,” an expert said on condition of anonymity. “The power distribution companies and consumers will have to bear the cost.”
Source: THE ECONOMIC TIMES
