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HomeBusinessExplained | How quickly can India move away from coal? 

Explained | How quickly can India move away from coal? 

With the demand for power going up, what is the outlook on the renewable energy sector? 

With the demand for power going up, what is the outlook on the renewable energy sector? 

The story so far: On Friday, Tamil Nadu Chief Minister M.K. Stalin wrote to Prime Minister Narendra Modi, requesting him to ensure adequate supply of coal to the power-generating units in the State. In Maharashtra, Deputy Chief Minister Ajit Pawar said the State government planned to import coal to cope with the power crisis. The other top power-consuming State in the country, Gujarat, is also planning to import coal, according to reports. Decline in coal stocks and the resulting power outages in several States have spurred queries of renewable energy’s potential to fill in for the conventional resource. Earlier this week, coal stocks in more than 100 thermal power plants in India fell below the critical mark (less than 25% of the required stock) while it was less than 10% in over 50 plants across India. On Saturday, the Minister for Coal and Mines, Pralhad Joshi, said at present 72.5 million tonnes (MT) of coal is available at different sources of Coal India, Singareni Collieries and coal washeries, and 22.01 MT with thermal power plants. “There is sufficient coal availability in the country, to last over a month, which is being replenished daily with record production,” he tweeted.

Is there a coal crisis?

Coal accounts for 55% of the country’s energy needs, according to Mr. Joshi. The India Energy Outlook 2021 report of the International Energy Agency (IEA) said energy use in India has doubled since 2000, with 80% of demand still being met by coal, oil and solid biomass. Pandemic-related disruptions, however, prevented the stock-up of coal. Mining operations were halted to curb the spread of the virus. Despite the gradual easing into operations, mining activities were hampered during the monsoons, delaying arrival of stocks. With household demand for power picking up and the arrival of summer, combined with the sudden acceleration in economic activity, it has resulted in a demand-supply mismatch. The country had experienced a similar situation last October, but with peak summer approaching, the coal stock situation is more worrisome now because demand for power will be high. The energy demand will go up as urbanisation and the population increase. The IEA estimates that despite the shock from COVID-19, India’s demand is expected to grow by almost 5% a year till 2040.

What is the consumption pattern?

Coal is abundantly available, has shorter gestation periods and coal-based plants have lower capital costs than hydel and nuclear plants, therefore, making it the most viable enabler of energy security in the country. The conventional resource’s capacity addition is further helped by the increased participation of the private sector in power generation. In Washington recently, Finance Minister Nirmala Sitharaman said India’s move away from coal will be hampered by the war in Ukraine. At the recently concluded Budget session, Mr. Joshi said, “Despite push for renewables, [the] country will require base load capacity of coal-based generation for stability and also for energy security.”

Where does India stand on renewable energy sources?

The report of the Central Electricity Authority on optimal generation capacity mix for 2029-30 estimates that the share of renewable energy in the gross electricity generation is expected to be around 40% by that financial year. The Union government has spent ₹3,793 crore until March 14 in 2021-22 for implementing varied renewable energy-related schemes and programmes.

A total of 152.90 GW of renewable energy capacity has been installed in the country as on February 28, as per government figures. This includes 50.78 GW from solar power, 40.13 GW from wind power, 10.63 GW from bio-power, 4.84 GW from small hydel power and 46.52 GW from large hydel power. In accordance with the Prime Minister’s announcement at COP26 (the 2021 United Nations Climate Change Conference), the Ministry of New and Renewable Energy aspires to install 500 GW of electricity capacity from non-fossil fuel sources by 2030.

In 2020-21, as per the CEA, 1,381.83 billion units (bu) was generated in total, of which renewable energy sources’ share was 297.55 bu — representing 21.5% of the overall generation. Up to August 2021, the share stood at 24%. “Over the next 10 years, the strong growth of renewables is not sufficient in the stated policies scenario to keep up with the projected pace of electricity demand growth, and coal-fired power generation makes up the difference…,” the IEA said in its report on India.

What are the challenges?

The capacity of a plant does not necessarily translate into the actual power it generates for the grid, some of it is lost owing to external factors such as heat or transmission losses. This applies for both renewable and conventional sources.

Solar and wind energy are variable resources with ‘variability’ being particularly exposed during periods of peak demand. For example, solar energy is abundantly available during daytime in summers. However, the domestic consumption peaks in the evenings when we turn on the air-conditioner after returning from work. With no sunlight outside then, energy requirement and supply face a mismatch. Another dimension to it is the seasonal variation. In monsoons, solar energy is barely available with wind energy available in abundance.

Another factor is spatial variability. Regions near coastal areas enjoy more wind and therefore, possess greater ability to produce wind energy, like Gujarat, in comparison to States which are drier and experience more sunlight, like Rajasthan. Use of renewable energy, therefore, would essentially require a balancing act.

What about transmission and storage?

Transmission and storage are central to addressing variability issues. They help cope with the ‘duck curve’ power demand among consumers in India. Resembling a duck, the curve is a graphical representation exhibiting the difference between the demand and availability of energy through the day. With both wind and solar being variable sources — it becomes imperative to establish a complementing model. This would require import and export technologies between States as well as optimising the trade between those with differing demand and production profiles. “Thermal plants in the eastern region, by contrast, provide flexibility for demand centres to the south and west, which have high industrial and agricultural loads and may call on imports during periods of low renewables availability,” IEA says.

They further add, “India’s national infrastructure has not been designed to account for so much variability in energy generation. The grid is accustomed to consistent supply from thermal power plants, which is diametrically opposed to the erratic generation from solar-PV, wind turbines, and other renewables.”

How will the cost factor work?

Transition to renewable energy would depend a lot on inculcating energy-efficient behaviour such as operating ACs, both for commercial and domestic usage, more flexibly through the day and opting for energy-efficient products. Cooling systems emerge as a utility during summers, the usage however is divided between higher and lower income households with the former being more economically secure opting to run them all through the day. A demand response programme in the direction would help address such issues keeping external factors constant. Further, lifestyle changes to reduce energy demand too would be essential; an example here could be Japan’s ‘Cool Biz Campaign’ permitting employees to wear light and casual clothes at work instead of the conventional jackets and tie in order to reduce the need for air-conditioning. As per government data, India has seen record low tariffs of ₹1.99 per KWh for solar power and ₹2.43 per KWh for wind power — much cheaper in comparison to electricity produced from conventional sources.

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