Even as India travels on the path to a greener future, a massive 14.56GW of coal-fuelled electricity is expected to arrive on stream this financial year, in a reminder that the world’s quickest-growing major economy needs diverse sources to satiate its rising hunger for energy. According to two people aware of the matter, this is part of a plan to add around 27GW of coal-fuelled capacity at the cost of about Rs 1.89 trillion, to be executed by power generation companies run by the Centre and state governments. The development comes against the backdrop of next year’s general elections, with the government committed to providing round-the-clock quality, reliable and affordable power to all.
“India is achieving its energy transition goals fully and will continue to do so," Union power secretary Alok Kumar said in response to a query. “We have already declared the bidding plan to add 50 GW of renewable energy capacity annually for the next five years to achieve the target of 500GW by 2030. At the same time, India has to ensure there is energy security that is required to enable its development and growth."
India’s power demand is growing at around 10% annually, with coal demand likely to peak between 2030 and 2035. Power from renewable sources is intermittent and insufficient to meet such demand, calling for coal power that also helps maintain grid stability. This also means that fossil fuel will remain the mainstay of India’s energy mix for years, even as the country hosts the world’s fourth-largest coal reserves and is the second-largest coal producer.
The capacity addition is led by central public sector units (PSUs) such as NTPC Ltd (8.620GW), NLC (1.980GW), SJVNL (1.32GW), THDC India Ltd (1.32GW), and state government-run firms, including Tamil Nadu Generation and Distribution Corp.
(3.44GW), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (3.3GW), Andhra Pradesh Power Generation Corp. Ltd (1.6GW), Telangana State Power Generation Corp. Ltd (4GW), Maharashtra State Power Generation Co. Ltd (660MW) and West Bengal Power Development Corp. Ltd (660MW), the people cited above said.
“This coal-powered power generation capacity is required to meet the growing demand for electricity in the country and to supply 24X7 quality power to all," said a government official, one of the two people cited earlier. Queries emailed to the spokespeople for NTPC Ltd, NLC, SJVNL, THDC, TANGEDCO, UPRVUNL, APGENCO, TSGENCO, MAHAGENCO and WBPDCL late on Sunday night remained unanswered till press time.
Coal power capacity totalling 205.235 GW remains the backbone of India’s baseload, accounting for more than half of India’s power generation capacity of 416.06GW. Analysts believe that India’s dependence on coal-fuelled power will continue.
“India Ratings and Research (Ind-Ra) has maintained a neutral outlook for the power sector for FY24, as it believes the overall plant load factor (PLF) of thermal power plants would continue to improve and reach closer to 65% during the year. This is backed by the consistent growth in power demand, expected at 6.5% y-o-y for FY24 and FY25, and continued dependence on coal-based generation, in the absence of any major increase in capacity additions in any other sectors except renewables," Ind-Ra wrote in a 10 April report.
The Central Electricity Authority (CEA), the country’s apex power sector planning body, expects peak electricity demand to touch 229GW in April before monsoon rains cool demand. The highest power demand recorded in the country last fiscal was 212GW. “In fiscal 2024, soaring temperature and resilient economic activity are expected to keep power demand growing. On average, the first quarter of the fiscal should see power demand grow 4% on-year on a high base of the previous year," Crisil wrote in a recent report.
Keeping the fossil fuel demand in mind, India’s largest coal miner Coal India Ltd has been given a supply target of 610 million tonnes (mt) to the power sector in FY24, an increase of 24 mt over what it supplied in FY23. “In fiscal 2024, given predictions of heat waves that will increase usage of air conditioners, fans, and refrigeration units, peak electricity demand should touch a record high. India’s peak power demand is expected to grow to 230GW in the first quarter of fiscal 2024, rising 6.5% on-year," the Crisil report added.
The Union power ministry has issued a slew of directives to meet the peak summer demand in the country, including asking power generation firms to blend up to 6% of their coal requirements with imports until September, imposing Section 11 of the Electricity Act on all imported coal-based power plants to operate at full capacity, and barring planned maintenance during the crunch period.
