India’s energy planner, Central Electricity Authority (CEA), has provided a detailed assessment of near-term electricity demand and proposed a prospective plan for development of the electricity system, and future course of action to meet the goals.
In its report, CEA has estimated that power plants would consume 871.5 million tonnes (mnt) of coal in FY’27 in order to satiate rising power demand. Of this, a bulk of 831.5 mnt would be met domestically while the remaining 40 mnt would be imported by plants designed on imported coal.
The estimation was based against an expected coal-based generation of 1,133 billion units (BU) in FY’27, assuming specific coal consumption of 0.67 kg/unit and transportation losses.
Moreover, the coal-based plants were assigned to generate additional electricity taking into account 20% reduction in output from hydro, nuclear and variable renewable energy sources.
Power generation target for FY27
Quantity in BU
Nevertheless, the CEA report indicates a decline in share of coal in overall energy mix impacted by higher addition of renewables and energy storage technologies that would gradually support the base-load.
Notably, contribution of renewable energy-based generation (excluding large hydro) towards the total generation is likely to increase to around 26.4% in FY27 from 11% in the year FY22. On the other hand, share of coal dropped from 70% to 58%.
Power demand projection
The Indian power sector is on course to witness a steep rise in demand recovering from the slowdown induced by COVID-19-induced lockdowns.
The CEA has highlighted that power demand would reach 1,874 BU during FY’27 compared to 1,379.8 BU in FY’22. These projections have been made considering the impact of solar rooftop, green hydrogen, EVs and energy efficiency measures.
This indicates that annual electricity demand would grow at an average of 7.2% over five years ending March 2027, nearly double the growth rate of over 4% seen during the five years to March 2022.
Capacity addition plan
Based on generation planning studies, India’s installed capacity for power generation is set to cross 600 gigawatts (GW) by FY27 from the current levels of 404 GW.
Total installed capacity is projected at 622.899 GW for FY27 comprising of 278.382 GW of conventional capacity (coal, gas and nuclear) and 344.517 GW of renewable-based capacity.
In fact, the capacity addition plan for FY’27 shows that renewable capacity addition of 187.909 GW would increase five-fold compared to coal-based capacity addition of 33.262 GW.
CEA has emphasised that the projected capacity mix would be adequate to cater the hourly demand on a full-year basis, while considering the various technical system constraints.
Nevertheless, the energy planner has informed that the country would need an additional coal-based capacity till FY’32 varying from 17 GW to around 28 GW, apart from the under-construction coal capacity of 25 GW.
This would be required to compensate for the delay in installation of nuclear and hydro power stations in a high demand scenario.
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