Coal-fired generation capacity in focus, 24x7 electricity supply

New Delhi: India will focus on setting up more coal-fired power projects as well as keep adding renewable generation capacity to achieve 24x7 electricity supply for all in 2024 amid economic expansion and the need to ensure energy security in these times of rising geopolitical uncertainties.

In a reflection of ambitious plans, the Union power ministry has planned a whooping 91 GW of coal-based thermal power generation capacity entailing an investment of Rs 7.28 lakh crore over the next few years.

Talking to PTI, Union Power and New & Renewable Energy Minister R K Singh said, "24X7 supply of power is the right of the consumer. Similarly, energy security is of paramount importance for us. You have seen what happened in Europe due to the Russia-Ukraine war."

At present, the average power supply across India is 23.50 hours in urban areas and 22 hours in rural areas, he said. Singh also said that the coal-based thermal power capacity will insulate the country from any geopolitical disruption and ensure energy security for the country at a time when our economy is expanding rapidly.

The coal-based capacity addition is also important given the rising demand for electricity in the country as peak power demand was at an all-time high of 243.27 GW in September 2023. India has installed power generation capacity of about 426 GW, including more than 213 GW of coal and lignite-based projects.

Earlier this month, President Droupadi Murmu said the dependence on fossil fuels is definitely decreasing but fossil fuel-based energy is also essential for the country. India has always worked as a responsible country in the field of clean energy. India is promoting clean coal technologies so that the processes of coal extraction and use become more efficient and environment friendly, she had said at an event.

According to the 20th Electric Power Survey (EPS) report published in November 2022, peak power demand in the country will touch 366.39 GW in 2031-32, 465.53 GW in 2036-37 and 574.68 GW in 2041-42.

Explaining why renewable energy alone cannot be sufficient for round the clock power supply, Singh said that solar is available in the day and wind blows at different times. Thus, renewables can provide round-the-clock power with energy storage only, which is expensive presently.

Singh said the ministry has planned 91 GW of new coal-based thermal power generation capacity, which includes 27 GW under construction. Around 31 GW of coal-based thermal capacity is at an advanced stage of implementation. Out of the total, construction would begin on 17 GW in 2024, the minister said, adding that another 33 GW thermal power capacity has also been planned.

The 17 GW thermal capacity addition entails an investment of about Rs 1.36 lakh crore at an average cost of implementation of Rs 8 crore per MW at the current prices. It is estimated to be 16.4 billion dollars at the foreign exchange rate of 83 against the dollar, on rough calculations.

Anil Sardana, Adani Power Managing Director and Chairman of industry body CII's National Committee on Power said that while renewable sources will continue to play a central role in the energy mix, meeting high base load demand growth will require additional thermal power capacity. He noted that as per the Central Electricity Authority, the peak power demand is expected to soar above 256 GW in 2024.

Further, he said that the power sector, particularly in India, faces a complex set of challenges as it stands at the intersection of multi-decadal growth and transition towards becoming a developed nation.

India's ambitious growth trajectory implies a substantial increase in power demand in the coming years. Meeting the soaring demand and providing reliable electricity while adhering to renewable energy targets and a stable grid is a significant challenge, he pointed out. Apart from round-the-clock power supply, consumers can also look forward to a new policy regime which will end monopoly in electricity distribution.

A Tata Power Delhi Distribution spokesperson said customers may have the option to choose their electricity provider in the future, but it is uncertain whether this will happen shortly. "Giving a choice to select a service provider was introduced in the Electricity Amendment Bill and has been awaiting consensus since. If it does happen, it will undoubtedly be advantageous for customers," the spokesperson said.

About integrating electricity markets across states, PTC India Chairman and Managing Director Rajib K Mishra said 2024 could see significant progress in this direction, with the implementation of the proposed 'Market Coupling Mechanism'. It will allow for real-time power trading across regional grids, optimising resource allocation and potentially bringing down costs for consumers, he added.

Further, he said the introduction of electricity derivatives such as futures and options could provide much-needed risk management tools. According to him, 2024 could see the development of a regulatory framework and pilot programs for these instruments, paving the way for a more mature and resilient electricity market, he added.