Power equations

Proactive focus on thermal power needs a rethink

With northern India facing the longest and most intensive heatwaves in decades, national power demand has hit 250 Gw, 25 per cent more than last year and 71 per cent more than in 2022. The power ministry has rightly taken pride in ensuring that thermal power stations have adequate stocks of coal to keep the lights, fans, and air-conditioning on. This has been a chronic problem in previous summers, leading to prolonged outages. This year, with the Eastern Dedicated Freight Corridor operational from October 2023, coal stocks have reached plants well on time. As on June 23, thermal power plants had 16 days of stocks as against 9.4 days on June 23, 2022, and 12.7 days on the same day in 2023.

All told, the government appears to have been proactive in ensuring that India’s burgeoning demand for power will be met in the years ahead. To this end, the government reportedly expects to add 15.4 Gw of coal-fired capacity in 2024-25, the highest in nine years, and 90 Gw by 2032. At the same time, a programme of “Coal Reforms 3.0” is on the agenda to increase the availability of coal for industrial sectors, especially steel units, with the broad objective of reducing imports to zero in the next two financial years. The first step in this process will be to introduce separate forward bidding auctions for domestic coking coal for steel units with washeries (to remove impurities in coal) and for those without washeries. Both moves can be considered practical and pre-emptive. Peak power demand is set to reach 366 Gw by 2030 from 243 Gw currently. Plus, in 2024-25 alone, leading integrated steel manufacturers in India are expected to commission an additional 15 per cent capacity in fossil fuel-guzzling blast furnaces.

The big question that arises from this thermal power rampup is the impact on emission and the future of renewable energy. India has set a target to achieve 50 per cent cumulative installed capacity from non-fossil fuel-based energy resources by 2030 and has pledged to reduce the emission intensity of its gross domestic product by 45 per cent by 2030, based on 2005 levels. It is hard to see how it can achieve the latter. True, the installed capacity of non-fossil power in India is now 45.3 per cent of the total capacity, putting India on track to exceed its climate-change commitments. But this is illusory progress. The absence of viable storage technologies has limited grid offtake from renewable sources. Thus, thermal energy still does the heavy lifting for the Indian economy, accounting for over 70 per cent of power generation.

Encouraging industry to continue its dependence on coal is unhelpful. In this respect Coal Reforms 3.0 appears to be at odds with a scheme announced earlier this year for a pilot project for green hydrogen to replace coal both as a fuel and as feedstock (which is possible even in steel produced through the blast furnace route). Given that coal-based thermal plants are responsible for a disproportionately higher share of emission than the industrial sector, the government may do well to balance a well-meaning approach to power India’s economy in the immediate future with a longer-term perspective of making the air safer for Indians to breathe in the long run.