Unviability of New Coal-Based Power Plants | 10 Sep 2021

Why in News

According to a recent report prepared by two independent think tanks, EMBER and Climate Risk Horizons, India does not require additional new coal capacity to meet expected power demand growth by Financial Year (FY) 2030.

Key Points

  • Highlights of the Report:
    • India’s peak power demand would reach 301 GW by 2030, if it grows at an annual growth rate of 5% (which is also in line with projections made by the Central Electricity Authority), India’s planned solar capacity can cover much of it.
    • Therefore, adding new coal plants will lead to “zombie” units – ones which will exist, but not be operational.
    • Further, India can free up nearly Rs 2.5 lakh crore by not investing in these surplus plants.
    • Once incurred, these wasted investments will lock DISCOMs (power distribution companies) and consumers into expensive contracts and jeopardise India’s Renewable Energy goals by adding to the system’s overcapacity.
    • Further, it will lead to the loss of annual savings of Rs 43,219 crore that India makes by investing in renewables and storage.
    • Thus, the report concludes that more coal capacity beyond what’s already under construction isn’t needed to meet the aggregate demand growth by FY 2030.
  • Factors Responsible for Solar Energy Over Coal Based Power Plants:
    • The disruption in the power sector owing to replacement of thermal based generation with Solar energy generation is possible with the downward trend of cost of solar panels.
      • Moreover, the newer technology options like battery energy storage systems will further promote solar energy.
    • The world is focusing on environmental issues, especially climate change and therefore the idea of growing sustainably has taken centre stage globally.
    • Government Policy of active promotion of Solar energy through schemes like PM KUSUM, Rooftop Solar Scheme, etc.
  • Importance of Continuing Coal Based Power 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.
      • However, that is still nearly half of the total energy mix and way ahead of any other source of energy. Thus, it is not easy to replace coal very easily.
    • Issues related to land acquisition, funding and policy continue to come in the way of renewable energy plans.
    • Apart from the power sector, other critical sectors like steel and aluminium also depend on coal based power.
    • Further, the capacity value of the coal based power plants is critical to meet instantaneous peak load, and to meet load when renewable energy is unavailable.
    • Further, India had initially set a 2017 deadline for thermal power plants to install Flue Gas Desulphurization (FGD) units that cut emissions of sulphur dioxides. But that was postponed to varying deadlines for different regions, ending in 2022.

Way Forward

  • Optimal Energy Mix in Power Generation: Power is generated through various sources of energy such as coal, hydro, natural gas, and renewables (solar, wind). An optimal energy mix is one that uses a mix of these generation sources in the most efficient manner. This gains tremendous importance as the future generation capacity mix should be cost effective as well as environmentally friendly.
  • New Technologies for Coal Based Units: The government has commissioned more efficient supercritical coal based units and old and inefficient coal based capacity is being retired. A range of new technologies (like Coal gasification, Coal beneficiation, etc.) can be deployed to make coal-fired power plants more environmentally compatible.

Source: IE