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ELECTRICITY GENERATION IN INDIA- ROLE OF FOSSIL FUELS IN THE NEXT TWO DECADES

The issue of the correct energy mix most suitable for our country has been a subject of serious consideration with many government bodies, departments and even many think tanks in the country. Niti Aayog in the draft energy policy has very aptly stated ”the world is moving away from overwhelming dependence on fossil fuel, and within the fossil fuels, away from coal and oil in favour of gas. Against an 88% total share of fossil fuels globally in the primary energy mix in the year 2005, the same fell to 86% in the year 2015. The share of oil has in particular fallen from 36% to 33%, while that of natural gas has increased from 23% to 24%, and that of Renewable Energy (including nuclear and large hydro) has gone up from 12.5% to14% in the period 2005-15”. This change which is essentially a trend set by the concerns expressed by most nations at the various conferences held by the UN bodies on climate change. India has also made commitments at the Paris meet (COP21). These NDCs (Nationally Determined Contributions) announced and committed for achievement within a fixed time frame will shape the Energy Policy. This would in turn determine the component of non-fossil fuel based electricity generation capacity in the next two decades.

 The Energy Policy would be looking at both the supply side and the demand side of energy. As far as the demand side is concerned it would dwell upon the changes we wish to see in power consumption in Industry, Buildings, Cooking, Agriculture and Transport. The critical factor in all this is use of higher energy efficient processes and devises. One can also promote conservation of energy, but this would require more of behavioural change though regulations may help. On the supply side it would be dealing with use of coal, oil and gas and renewable sources of energy (solar, wind, geothermal, nuclear, hydro, biomass, etc.) While not getting into the details of the demand side some basic presumptions will be noted and the focus of the paper would be primarily on the supply side.  A large portion of the oil and gas sector is associated with transport and cooking. This paper will primarily dwell upon the issues relating to electricity generation, supply and distribution.

BASIC ASSUMPTIONS

Commitments made by India at the UNFCCC.

  1. INDC include reduction in the emissions intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level.
  2. To create an additional carbon sink of 2.5 to 3 billion tonnes of COequivalent through additional forest and tree cover by 2030.  
  3. India declared a voluntary goal of reducing the emissions intensity of its GDP by 20–25%, over 2005 levels by 2020, despite having no binding mitigation obligations as per the Convention. 
  4. India’s share of non-fossil fuel in the total installed capacity is projected to change from 30% in 2015 to about 40 % by 2030. 
  5. To accelerate development and deployment of renewable energy in the country, the Government is taking a number of initiatives like up-scaling of targets for renewable energy capacity addition from 30GW by 2016-17 to 175 GW by 2021-22.
  6. The ambitious solar expansion programme seeks to enhance the capacity to 100 GW by 2022, which is expected to be scaled up further thereafter.

These targets are viewing 2030 as the year when this would be achieved. As energy demand is concerned the Draft Energy Policy is projecting a 2.7 to 3.2 increase in energy demand of which electricity alone is expected to increase by 4.5 times by the year 2040. The per capita consumption which was 521 Kgoe in 2014 in expected to rise to 1055-1184 Kgoe by 2040.The per capita electricity consumption is expected to rise from 1075 Kwhs in 2015 to 2911-2924 Kwhs in 2040.  With greater use of gas in replacement to coal and oil the import dependency is also expected to increase. Technology enabled changes in the consuming sectors are also expected to contain consumption.

One of the most critical issues is the integration of renewable energy into the national grid. We need smart grids which can handle large intermittent supplies. On the other hand we would need to have much shorter time for switching on and switching off of sources which constitute the base load to ensure conservation.

The main factors which will determine the electricity generation constituents are the increase in per capita consumption and the target fixed for expansion of installed capacities for renewable energy sources. 

THE PRESENT SITUATION

The installed capacity for electricity generation in the country by the end of 12th plan (2016-17) had reached 319606.30 MWs. The break-up of this is given below :-

  1. Coal and lignite based : 192162.88 MWs
  2. Gas based : 25329.38 MWs
  3. Diesel : 837.63 MWs

Total for thermal : 218.329.88 MWs

  • Nuclear: 6780 MWs
  • Hydro : 44478.42 MWs
  • Renewable energy sources : 50018 MWs  

Total installed Capacity : 319606.30 MWs

As of January 2020 the situation has improved with the most significant increase in installed capacity of renewable energy sources. The position as of Jan 2020 is as follows :-

  1. Coal based : 197964.50 MWs
  2. Lignite based :  6760 MWs  (for coal and lignite- 55.5%)
  3. Gas Based : 24955.36 MWs
  4. Diesel : 509.71 MWs

Thermal total : 230189.57 MWs  (62.4%)

  • Nuclear : 6780: MWs (1.84%)
  • Hydro : 45399 MWs (12.3%)
  • RES (renewable) : 86321.03 MWs (23.4%)

Total : 368689.82 MWs

There were 1169 billion units of power generated from 1st  April 2019 to 31st january 2020. The distribution amongst various sources is as follows :-

  1. Thermal – 74%
  2. Nuclear – 3 to 3.55 %
  3. Hydro – 11.8%
  4. Import – 0.5%
  5. RES – 9.8%

Two important points to be noted are (1) average PLF (plant load factor) in January

2019 was 59.65 and in January 2020 it has declined to 57.61 and (2) installation of Solar energy based power plants has increased from 2630 MWs in December 2014 to 37505 MWs in December 2019. Despite a sharp increase in RES and decline in the PLF of thermal power plants almost 75% of generation is still from thermal plants.

WHAT ARE THE IMPLICATIONS OF THE TARGETS SET

The most important factor which will determine the requirement of electricity is the expected increase in per capita consumption. One assumption is that it would increase from 1075 Kwhs to 2911-2924 Kwhs. Today India has a population of about 1.3 billion and it is expected to table off at about 1.6 billion by 2050. We can expect a demand to be about 4 times the present demand by 2040. In India 1169 billion units were generated during the period 1st April 2019 to 31st January 2020. For the whole year we can presume that 1350 billion units will be generated/consumed. On this analogy the power requirement in 2040 would be 5400 billion units. The installed capacity in India today is 368689.62 MWs of which about 86000 MWs is from renewable energy sources. The question is what would be the needed installed capacity in 2040 which would be able to generate the required amount of electricity.

The second important factor is the commitment made by the government to ramp up installed capacity of Non-fossil fuel based energy sources to 40% by 2030. At present it is about 37%. The government of India had announced that by 2022 the installed capacity of renewable energy sources would be enhanced to 175 GWs of which solar alone would constitute 100 GWs. The current situation is that capacity of solar based power plants has increased from 2630 MWs in Dec 2014 to 37505 MWs in Dec 2019. Installing additional 63000 MWs in the next three years would be a difficult task.

Estimates made in energy policy 2007 indicate that about 800 GWs capacity would be required in 2030. Another estimate indicates that 1100 GWs capacity would be needed in 2040. This indicates that in the next 10 years we would be increasing our installed capacity by more than 100%. In the following decade add another 300 GWs would be added.

The commitments made in Paris require that the Non-Fossil Fuel based Energy Sources installed capacity would have to increase from 138.5 GWs to 320 GWs in the next ten years. This is approximately a 230% increase. If increase in all Non-Fossil Fuel based energy sources is proportionate then hydro would have to increase from 45399 MWs to 104418 MWs, nuclear from 6780 MWs to 15594 MWs and in RES form 86321 MWs to 198,538 MWs. It is unlikely that Hydro and Nuclear would expand to this extent and therefore RES would have much bigger share.  The rate at which Hydro and Nuclear have progressed during the 12th plan the capacity addition would not be more than 25000 MWs by 2030 in these two sectors leaving the substantial increased to take place in RES. The distribution of installed capacity by 2030 could therefore be somewhat like this:

  1. RES : 250000 MWs (31%)
  2. Hydro and Nuclear :80000 MWs (10%)
  3. Thermal:  470000 MWs (59%)

One can with similar presumptions arrive at the expected distribution of installed capacity in2040.

These are however, only estimates and subject to changes that may be instigated by improvements in battery storage technology, better management of power grids, development of Nuclear Fusion reactors, improvement in efficiency of thermal power stations, carbon capture and sequestration or utilization technology or even in reducing step-up/step-down time for thermal plants.

It is perhaps very difficult to predict very accurately the power supply scenario. In fact with the impact of the Corona Pandemic one is also uncertain about the manner in which electricity demand  will shape up.  At present there is a sharp dip in the demand for electricity as the industrial production has slowed and there is no clarity on the revival of industrial activity. The government has been announcing various stimulus packages but these address only the supply side where as there is hardly any concrete plan to give impetus to the demand side of the market. Unless demand increases industrial activity will remain sluggish.  With this situation no government will encourage expansion of electricity generation capacity as it would only add to already existing ideal capacity. Revival of economic activities and adequate economic growth will generate the need for more power and then expansion can be planned out. Perhaps at present we need to wait and see how the situation emerges in the post Covid-19 pandemic. Once there is some clarity the demands can be estimated and subsequently the generation side.

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