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India’s Power Sector Plan 2030: Solar & Wind Energy Predominate

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By Didhiti Ghosh

Kolkata, July 3, 2019: Solar and wind energy projects may constitute over half of India’s total power capacity by 2030, according to a draft report by the country’s power-planning body, which sees the country surpassing its climate goals. All non-fossil fuel sources will form 65% of the total installed capacity and contribute around 48% of gross electricity generation.

Prime Minister Narendra Modi’s climate target of having 40% non-fossil fuel powered capacity by 2030 will be exceeded if the projections hold true. As per the current plan, the government aims to install 175 gigawatts of renewable capacity by 2022. India had 80 gigawatts of renewable capacity as of May-end.

Solar and wind projects are seen constituting 440 gigawatts of capacity out of the projected 831 gigawatts in more than a decade, the Central Electricity Authority said in the report Monday. The share of coal in overall capacity is likely to drop to a third from about 56% now. Still, the polluting fuel will continue to produce half of the country’s electricity by 2030, compared with about 72% now.

In a report published by the Economic Times, the Central Electricity Authority (CEA) had pegged overall energy and peak power surpluses at 4.6 per cent and 2.5 per cent, respectively, indicating that India would be a power-surplus country in the financial year. The same was mentioned in its load generation balancing report (LGBR) for 2018-19.

In 2017 also, the CEA in its LGBR had projected that India would become a power-surplus nation in 2017-18. But, the peak power deficit was 2.1 per cent, while overall electricity deficit was 0.7 per cent across the country in that financial year.

The generation programme from fossil fuel based generating sources has been arrived at after ensuring full utilisation of the energy that is likely to be available from nuclear & renewable energy sources, it said.

The contribution from coal or lignite based generating stations to the generation programme is 1,044.29.

Even with its continued reliance on coal, India is expected to meet its commitment made under the Paris Agreement on climate change to cut emissions relative to the GDP by a third by 2030 from 2005 levels. India is the third largest CO2 emitter among countries but per capita, its emissions are only 40% of the global average, according to the IEA.

“The recent cost trends of renewable energy generation sources have given them the footing to compete with conventional sources of electricity generation,” according to the report.

The report, which is yet to be adopted by the government, identifies the intermittent nature of renewable generation as a limiting factor and advocates adoption of grid-scale battery storage. The reducing cost of batteries will help in the faster rollout, it said.

India is projected to overtake the U.S. as the world’s second-biggest emitter of carbon dioxide from the power sector before 2030, as the nation’s electricity demand skyrockets, the International Energy Agency said in its World Energy Outlook last year. Carbon dioxide emissions from the Indian power sector are likely to be 1,154 million tonnes by 2029-2030, the CEA said.

The predominance of coal has also been a turning point in this aspect. One of the key reasons for the woes of the thermal power sector was the Supreme Court’s 2014 decision to cancel 204 coal blocks allocated since 1993, calling the allocations illegal and arbitrary. In 2015, the Union government passed a bill to award these blocks through auctions and allotments. The government has so far awarded 85 coal mines, including 24 captive blocks to the private sector, under the Coal Mines (Special Provision) Act, 2015.

However, CRISIL’s Prithiani sounds a note of caution: “For private companies that have won mines in auctions, their weak financial position and lack of PPAs is a bigger challenge than environmental issues.” In February 2018, the government decided to end the monopoly of Coal India.

Private companies could now bid for mines not just for their use, but also to sell the coal to others, which only Coal India could do till now. This was the biggest step in freeing up the sector since coal mines were nationalised in the early 1970s.

“For commercial mining to work there should be no cap on prices. If there is a cap, there will be less competition,” says Vinay Prakash Goel, CEO for coal and mining businesses at Adani Enterprises, which operates nine coal blocks given to PSUs under the mining developer and operator model.

Till battery technologies to store solar power improve and become cost-effective, the country’s peak electricity demand will have to be met by thermal power, especially as the outlook for hydel and nuclear power is not all that rosy. Ashok Khurana, Director General of the Association of Power Producers, says if the government has to provide 24X7 power for all, around 25 GW of capacity will have to be added.

A spokesperson at state-owned National Thermal Power Corporation, India’s largest thermal power producer, says while coal will remain the mainstay of the power sector for at least a decade, the focus will be on “competitive, environmentally compliant and flexible power generation from coal plants.”

According to BP Energy Outlook 2019, coal’s share in India’s primary energy consumption will decline from 56% in 2017 to 48% in 2040. But that is still nearly half of the total energy mix and way ahead of any other source of energy. Oil’s share, the second largest, will decline from 29% to 23%, and the contribution of renewables will rise fivefold to 16%. Even the NITI Aayog, which replaced the Planning Commission, in a 2017 report estimated the share of coal in the energy mix in 2040 to be at least 44%. “There are scenarios where the share of coal can even increase,” says Rahul Tongia, a fellow with Brookings India, a think tank.

Tackling climate change is impossible without reducing our dependence on fossil fuels, especially coal. The problem lies in the fact that coal is cheap and developing economies like India prefer low-cost fuel sources.

(Author Didhiti Ghosh is an India Columnist at La Agencia Mundial de Prensa, USA and is a Guest Faculty at the Centre for Linguistics, Maulana Abul Kalam Azad University of Technology, WB. E-mail: didhiti.24@gmail.com | LinkedIn: https://bit.ly/2H6gNAv).

 

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