Indian power sector has witnessed gradual revival in demand post covid induced lock-downs. However, development with regards to capacity addition in thermal power plants remains slow, which accounts for almost 75% in the overall commercial power generation.
Thermal power sources consisting of plants based on coal, lignite, diesel and gas, registered net capacity addition of 1.38 giga-watt (GW) during FY22, down 67% y-o-y from 4.13 GW in FY21. These additions were carried out entirely for coal-based plants.
During FY22, a total of 4.48 GW of gross capacity was commissioned, whereas 1.5 GW of end-of-life capacity was retired and an equivalent capacity was converted for captive usage.
On the other hand, capacity addition in renewables increased 109% y-o-y to 15.45 GW in FY22. This includes record solar capacity installations of 13.9 GW during the fiscal. As a result, total renewable energy capacity now stands around 110 GW at the end of FY22.
Private players shy-away from coal projects
The emergence of renewables has been a major hindrance to the development of coal-based power plants, whose existing capacity is currently far in excess of the actual demand and thus impact their operations.
Notably, the country had registered its all-time peak power demand of 201.066 GW on 26 Apr’22. In contrast, its installed power plants capacity currently stands at 399 GW, of which coal-fired plants alone cater 204 GW. This implies that several coal units are currently not in operation.
However, coal plants run by central and state government companies are in a comparatively better condition than the private sector plants.
In tandem with increased demand, plant load factor (PLF) of central run plants increased to 69.62% in FY22 against 63.78% in FY21. In contrast, the PLF of independent power plants was recorded at a low of 52.62% in FY22, falling from 54.23% in FY21.
Some of the lingering issues faced by the private players include rising fuel cost and absence of power purpose agreements with sellers, that kept them on side-lines from developing new power plants.
In fact, commissioning of 525 MW unit by SPEC in Tamil Nadu was the sole capacity addition seen from the private sector during FY22, with rest coming from the government companies.
Coal-based power plants added during FY22
Source: Power Ministry, CoalMint | Quantity in MW
Need for right balance in energy-mix
The ongoing coal crisis seen at the power plants highlight that ramp-up in power output from alternative sources is equally important as improving the existing infrastructure for coal movement.
Electricity generated by renewable sources is intermittent and seasonal dependent. Besides, the country also lags substantial development in nuclear power.
The government has set a target of 450 GW of renewable energy capacity in the coming years so as to reduce the burden on coal-fired plants.
The development would certainly lower coal’s share in the energy mix, but its quantum on absolute term is expected to increase driven by country’s ever-lasting power demand. In addition, there would be the need for new capacity additions in order to replace the old coal-based plants.
Leave a Reply