DH Deciphers | What the new power policy spells for the sector
Earlier this month, the Central Electricity Authority (CEA) notified the National Electricity Plan (NEP) for the period of 2022-32. The plan includes a review of the last five years (2017-22), a detailed plan for the 2022-27 period and a roadmap for the next five years (2027-32). Ajith Athrady decodes the plan.
What is the National Electricity Plan?
CEA prepares the NEP every five years forecasting the country’s power generation, transmission and demand trajectory for the coming years. It also has short-term and long term plans for electricity generation, transmission utilities and sources of electricity production.
What are the projections of the latest NEP?
India’s power generation capacity is expected to touch 900 gigawatt (GW) by the end of this decade with major capacity addition coming from renewable energy sources such as solar, wind and large hydro projects.
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What is the plan for power generation?
Presently the country has a cumulative installed capacity of 416,591 MW, 50 per cent of which is coal/thermal power accounting for 237,269 MW.
The estimated installed capacity for 2026-27 is 609,591 MW, comprising of 273,038 MW of conventional capacity (coal-235,133 MW, gas–24,824 MW, nuclear-13,080 MW) and 336,553 MW of renewable based capacity (large hydro-52,446 MW, solar-185,566 MW, wind-72,895 MW, small hydro-5,200 MW, biomass-13,000 MW, pump storage plants-7446 MW) along with BESS (Battery Energy Storage System) capacity of 8,680MW.
This is expected to see a substantial jump in the next five years as the likely installed capacity for 2031-32 will be 900,422 MW comprising of 304,147 MW of conventional capacity (coal-259,643 MW, gas–24,824 MW, nuclear-19,680 MW) and 596,275 MW of renewable energy (large hydro-62,178 MW, solar-364,566MW, wind-121,895 MW, small hydro-5450 MW, biomass-15,500 MW.)
Will coal continue to be the mainstay for electricity generation?
No. The CEA has estimated that the share of coal capacity will reduce to 39 per cent of the total installed capacity in 2026-27 from 52.8 per cent in 2021-22. The share of non-coal capacity, on the other hand, is likely to increase to 57.4 per cent by the end of 2026-27 and may likely to further increase to 68.4 per cent by 2031-32. This is a more than 20 per cent jump from 42.5 per cent as of April 2023.
What funding is required for this capacity addition?
About Rs 33.60 lakh crore will be needed for capacity addition for the decade beginning in 2022.
What will be the increase in power demand?
The all-India peak electricity demand and electrical energy requirement is projected to be 277.2 GW and 1907.8 billion units, respectively, for 2026-27. This will rise to 366.4 GW and 2473.8 BU for 2031-32. The energy requirement and peak demand are inclusive of the impact due to increased adoption of electric vehicles, installation of solar roof tops and production of green hydrogen.
What is the peak demand now?
On June 9, the peak power demand reached a record of 223 GW, resulting in a peak hour shortage of 189 MW. Last year’s record was 216 GW. While the peak power demand is expected to reach 230 GW this year, the requirement may come down if the monsoon picks up pace in the coming days. Nevertheless, the government is taking measures to ensure adequate availability of coal to avoid a repeat of last year’s crisis-like situation. The Ministry of Power has directed all imported coal-based power plants to operate at full capacity till September due to increased demand.
What are environmental concerns?
With the global focus on clean energy, India has been called out for its high dependence on thermal power and NEP has taken cognisance of this. “Though the share of coal-based generation may continue to be high, operation of coal-based plants in a more flexible mode, unlike as base load stations earlier, needs to be emphasised in the wake of huge intermittency and variability of renewable-based generation,” the NEP said.