Central Idea

• The government’s contemplation of a ban on new coal-based power stations, while allowing those under construction to continue, has generated surprise and curiosity. The government’s acknowledgement of the need for an additional 16,000 MW of coal-based capacity to meet the power demand in 2029-30, alongside the existing 27,000 MW under construction, seems contradictory.

Central Electricity Authority (CEA) report

• The Central Electricity Authority (CEA) report is a comprehensive document prepared by the Central Electricity Authority of India.
• The CEA is a statutory organization responsible for overseeing and coordinating the development of the electricity sector in the country.
• The CEA’s report, titled Optimal Generation Capacity Mix, presents two versions released in January 2020 and April 2023, respectively.
• The second report, based on the 20th Electric Power Survey (EPS), adopts a more conservative approach to demand projections for 2029-30 compared to the first report.

Pattern of electricity demand In India

• Diurnal Variation: The demand for electricity in India typically exhibits a diurnal pattern, with peaks and troughs occurring throughout the day. The morning peak is generally observed during the early hours of the day when residential and commercial activities commence. The evening peak, traditionally occurring around 7 pm, is typically higher due to increased industrial demand and domestic energy usage.
• Seasonal Variation: During the summer months, particularly in regions with high temperatures, the demand for electricity tends to increase significantly due to the widespread use of air conditioning and cooling systems. This spike in demand places additional stress on the power grid and necessitates the availability of sufficient generation capacity to meet the heightened energy requirements.
• Day of the Week Variation: Weekdays generally witness higher electricity demand compared to weekends. This difference can be attributed to increased industrial and commercial activities on weekdays, while weekends often involve reduced energy consumption in non-essential sectors.
• Industrial and Commercial Demand: As economic activities and manufacturing processes ramp up during working hours, these sectors contribute significantly to the overall demand for electricity. Demand patterns in these sectors are influenced by factors such as production schedules, working shifts, and operational requirements.
• Rural vs. Urban Demand: Urban centers, with higher population densities and greater industrial and commercial activities, tend to exhibit higher electricity demand compared to rural areas. However, rural electrification efforts and the increasing penetration of electricity in rural regions have led to a rise in demand from these areas as well.

Factors attributed to the decrease in the required capacity for coal-based stations

• Conservative Demand Projections: The second version of the CEA report projections indicate a slightly lower peak demand and energy demand for 2029-30 compared to the earlier estimates. The government may consider these more realistic projections and adjust the required capacity accordingly.
• Historical Overestimation: The CEA’s power demand projections have been known to be somewhat exaggerated in the past. This overestimation has led to higher capacity requirements being initially projected.
• Changing Load Curve Dynamics: The load curve, representing the pattern of electricity demand throughout the day, has been evolving in India. Recent trends indicate a shift in the evening peak to around 4 pm. This shift aligns well with the availability of solar power during daylight hours, reducing the need for coal-based capacity.
• Retirement of Older Units: A significant change in policy relating to the retirement of coal-based units after 25 years of operation has been considered. The revised CEA report mentions that a lower capacity of coal-based stations would be retired by 2030 compared to the earlier estimate.
• Well-Maintained Old Plants: The government may view the continuation of well-maintained coal-based plants beyond the 25-year mark as a viable option. If generating units are properly maintained, the station heat rate remains unaffected by age. Continuing operations of such plants offers advantages such as pre-existing transmission links and maintained coal linkages, which can contribute to a more efficient use of resources.

Way ahead: Balancing Energy Sources

• Promoting Renewable Energy: A significant focus should be placed on accelerating the development and deployment of renewable energy sources such as solar, wind, hydro, and biomass. This entails setting ambitious targets for renewable energy capacity addition and providing supportive policies and incentives to attract investments in these sectors.
• Enhancing Grid Integration: Robust grid integration infrastructure is essential for effectively integrating and managing the variability of renewable energy sources. Developing smart grids, advanced energy storage systems, and grid flexibility mechanisms can facilitate the integration of renewable energy into the grid, ensuring smooth and stable power supply.
• Energy Storage Technologies: Expanding the use of energy storage technologies, such as advanced batteries, pumped hydro storage, and emerging technologies like hydrogen storage, can help address the intermittent nature of renewable energy sources.
• Demand-Side Management: Promoting energy-efficient appliances, implementing time-of-use pricing, and raising awareness about energy conservation can incentivize consumers to shift their electricity usage to non-peak hours, thus reducing the strain on the grid.
• Distributed Generation: Encouraging distributed generation through rooftop solar panels, community-based renewable energy projects, and microgrids can help diversify the energy mix and reduce transmission losses. Distributed generation enables localized generation and consumption, enhancing grid resilience and reducing dependence on centralized power plants.
• Flexible Power Purchase Agreements (PPAs): Implementing flexible power purchase agreements that allow for the integration of variable renewable energy sources can attract investments in clean energy projects. These agreements should provide a fair and stable pricing mechanism for renewable energy developers, ensuring long-term viability and encouraging their participation in the energy transition.

Conclusion

• The government’s contemplation of a ban on new coal-based power stations, while allowing ongoing construction projects, reflects a pragmatic approach to energy planning. By reassessing the need for additional coal-based capacity, the government demonstrates a commitment to optimizing energy resources. However, it is essential to strike a balance and prioritize investments in solar and wind power to achieve a sustainable and reliable energy future for India.

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