Mayuri Singh, Manager – Communications and Culture, Mercados Energy Markets India
India is at a turning point, grappling with how to power its growing economy without compromising its environmental commitments. Recent debates in the Rajya Sabha have brought the spotlight on the expansion of thermal power. Is this a necessary step to fuel our nation’s growth, or does it threaten our strides towards renewable energy and sustainability?
The Necessity of Thermal Power Expansion
India’s energy demand is projected to grow exponentially in the coming years. According to the Central Electricity Authority (CEA), the country needs to increase its coal and lignite-based installed capacity from the current 210.969 GW (as of June 2024) to over 283 GW by FY 2031-32 to meet base load requirements. This entails an addition of approximately 72 GW of coal-based capacity, with an estimated expenditure of ₹6,67,200 crores at FY 2021-22 price levels.
Coal-based power has been a cornerstone of India’s energy strategy due to its reliability and capacity to meet continuous base load demands. The expansion of thermal power is seen as essential to support the growing industrial and residential electricity consumption, especially as the country aims for higher economic growth and improved living standards.
Economic Considerations
Setting up new coal-based thermal capacity involves substantial costs, pegged at ₹8.34 crores per MW at FY 2021-22 price levels. Despite the high initial investment, coal remains a reliable and cost-effective source of base load power. The government’s rationale includes the stability and reliability of coal-based power to meet the immediate and base load energy demands of a growing economy.
However, the economic viability of thermal power is challenged by fluctuating international coal prices and associated costs such as freight and insurance. The average power purchase cost has increased by 71 paisa between FY 2022 and FY 2023 due to various rising costs, including transmission. To mitigate these issues, the government has introduced measures like the SHAKTI scheme, which ensures transparent coal allocation, and the rationalization of coal linkages to reduce power generation costs. Additionally, power exchanges have enabled competitive procurement and efficient price discovery, helping maintain affordable electricity tariffs for consumers.
Enhancing Energy Infrastructure
India’s energy infrastructure has seen substantial enhancements over the past decade. The installed capacity of renewable energy has increased from 75,519 MW in March 2014 to 195,013 MW by June 2024. Additionally, the country has added transmission lines spanning 195,181 circuit kilometers and a transformation capacity of 730,794 MVA, creating one of the largest unified power grids globally. This infrastructure allows the transfer of up to 118,740 MW across regions, optimizing power distribution and lowering costs.
The development of such a robust grid is crucial for integrating various energy sources and ensuring reliable electricity supply across the country. This capability supports the effective utilization of both thermal and renewable energy resources, enhancing overall energy security.
Environmental and Sustainability Challenges
Thermal power, particularly from coal, is a significant contributor to greenhouse gas emissions. This expansion raises serious environmental concerns. However, the government has been proactive in addressing these challenges. Several measures have been adopted to decrease emissions from thermal power plants, including:
- Adoption of supercritical and ultra-supercritical technologies.
- Retrofitting existing plants to reduce emissions.
- Promoting renewable energy generation to offset the environmental impact of coal-based power.
All new thermal power plants are required to adhere to strict emission norms, ensuring that future capacity additions are environmentally compliant. The government has also committed to maintaining thermal capacity to meet peak demands while investing in renewable energy.
Achievements and Ambitions in Renewable Energy
Despite the focus on thermal power, India has made remarkable progress in the renewable energy sector. The total installed capacity from non-fossil fuel sources has reached 45.5%, and the government is committed to increasing this to over 50% by 2030. Significant initiatives that underpin this progress include:
- Waiver of interstate transmission system (ISTS) charges for solar and wind power.
- Establishment of Ultra Mega Renewable Energy Parks.
- Implementation of schemes like PM-KUSUM, aimed at promoting solar energy in rural areas.
India’s renewable energy journey is supported by various policy measures and incentives designed to accelerate the adoption of clean energy technologies. These efforts are critical to reducing the carbon footprint and achieving long-term sustainability goals.
The Strategic Balancing Act
India’s strategy to balance the expansion of thermal power with renewable energy commitments is complex but necessary. The expansion of coal-based power is seen as a stopgap measure to ensure energy security and support economic growth while renewable energy infrastructure is scaled up. The government’s approach involves:
- Continuing investments in renewable energy projects.
- Enhancing grid infrastructure to integrate large-scale renewable energy.
- Implementing measures to improve the efficiency and reduce emissions from thermal power plants.
Long-Term Sustainability: A Viable Path Forward
In the long run, the expansion of thermal power plants need not result in a sustainability setback. The integration of advanced technologies in coal-based power plants can significantly reduce their environmental impact. Supercritical and ultra-supercritical technologies, for instance, improve efficiency and lower emissions compared to traditional coal-fired plants. Additionally, the government’s commitment to retrofitting existing plants with emission control technologies further mitigates environmental concerns.
Moreover, the strategic emphasis on renewable energy ensures that while thermal power meets immediate demands, the long-term trajectory is firmly aligned with sustainability goals. The projected increase in non-fossil fuel-based capacity to over 500 GW by 2031-32 demonstrates a clear commitment to a greener energy future. This includes solar, wind, hydro, and biomass energy sources, all of which are integral to diversifying India’s energy mix.
Way Forward
India’s power sector stands at a crossroads, with critical decisions to be made about its energy future. The expansion of thermal power capacity is driven by the need to meet immediate energy demands and support economic growth. However, this must be carefully balanced with ongoing efforts to expand renewable energy and reduce carbon emissions.
The country’s progress in renewable energy is commendable, but the transition to a sustainable energy future requires a multifaceted approach. This involves leveraging thermal power in the short term while aggressively pursuing renewable energy projects and technological innovations to ensure a sustainable and environmentally responsible energy landscape.
India’s journey towards a balanced and sustainable energy mix is a dynamic process. By integrating robust renewable energy projects and enhancing grid infrastructure, the country can achieve its energy security goals without compromising on its commitment to sustainability.