New Delhi: For the first time since the 1960s, coal’s contribution to India’s total installed capacity — total power generation capacity — has dipped below 50 percent, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA).
This seeming shift away from fossil fuels is bolstered by the fact that 71 percent of the fresh electricity generation capacity added in the first three months of 2024 came from renewable sources.
A report by IEEFA South Asia, released on 15 May, pointed out that this marked a “more sustainable future for India’s electricity sector,” also given that in 2024 India surpassed Japan to become the third-largest solar power generator in the world.
However, India’s shift towards greener sources of power isn’t as cut and dried as that.
Even if the installed capacity of coal has fallen to 49.23 percent this year, India’s coal production from its existing coal mines is higher than last year. More importantly, the country is actively drilling for more coal deposits.
According to data from the Ministry of Coal, in the first quarter of 2024, the country surpassed its coal drilling targets, achieving over 150 percent of its targets set for the year — indicating that we are actively looking for more coal deposits.
India produced 312.99 MT of coal in the first quarter of 2024, up from 283 MT in the same period in 2023. This is a 10 percent increase and clearly shows that despite a lower coal installed capacity, the country still needs an increasing amount of coal.
Also, coal ministry reports show that more than 70 percent of the coal that is produced is dispatched to the power utilities sector, while 5 percent is also sent to captive power plants — plants used by just one industry for their own power consumption.
That said, Vibhuti Garg, director of South Asia at IEEFA, told ThePrint that the recent bout of renewable energy capacity addition is something to be proud of since it is in line with our national targets. “The government planned to establish 50 percent power generation capacity from non-fossil fuel sources by 2030, but we’ve achieved it in 2024 already.”
However, she and other energy experts cautioned that an increase in renewable energy capacity in India could be for several reasons other than an overall shift to greener energy— mainly stemming from increased electricity demand in the country.
They added that we still have a long way to go to wean ourselves off coal-generated power.
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Why low production from renewable energy sources?
Between January and March 2024, coal accounted for 80 percent of the total power generated in India, making up almost 4,000 million units of electricity. Meanwhile, solar and hydropower — the leading renewable energy power sources — could not even cross 400 million units each.
There are several reasons why, despite the addition of more renewable energy installed capacity, their share in India’s power generation remains low. One of them is the output capacity of solar power plants.
Anil Swarup, former secretary of the Ministry of Coal, explained that the plant load factor (PLF) of solar power plants is about 20-25 percent of their installed capacity.
Plant load factor is the production capacity or output capacity of a particular power plant, as opposed to its total installed capacity. It is the percentage of total power output that is actually utilised by a power plant. “Say if we install a solar power plant of 100 GW, it will produce 20 GW of electricity,” he told ThePrint.
“At the same time, a thermal power plant of the same capacity would yield at least 65-70 GW of electricity.”
According to NITI Aayog, the Plant Load Factor (PLF) of solar power plants in the country is currently 16.04 percent, while for wind it is 20.6 percent. This means that any solar power plant in India is actually producing only 16 percent of its total installed capacity. Thermal power plants on the other hand have a PLF of 67 percent, while nuclear power plants have 74 percent.
This huge difference in output is a big reason why renewable energy sources are unable to make up even half of our total electricity production.
“India’s energy needs are only growing because of high industrial and GDP growth, and more so now because of commercial demand due to the hot weather as people need more ACs,” said Garg. “Keeping this demand in mind, I would say our renewable energy capacity addition needs to grow even more than it currently is.”
Future of solar and other clean energy systems
The increase in renewable energy installed capacity in the first quarter of calendar year 2024 was largely fuelled by solar installations, and in particular the 1.6 GW solar power plant in Khadva by Adani Green Energy.
While India is currently the third-largest generator of solar energy in the world, solar power plants still pose a number of challenges to electricity generation.
As Anil Swarup explained, India’s peak electricity demand is during early morning and night when solar power plants do not function. “So, to utilise solar power to its full potential, we should also make storage systems available,” said Swarup.
According to Garg, Energy Storage Systems (ESS) are the future of India’s electricity market investment, and they’ve already seen a rise.
Currently, battery energy storage systems (BESS) and pumped hydro-storage systems (PHS) are the two main storage technologies in India, and the government has issued tenders for 20 GW worth of ESS capacity in 2023 alone.
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Government’s coal push a worry
India’s rapid increase in coal production and coal drilling, however, has experts like Garg worried.
Drilling and exploration of coal deposits are carried out by the Central Mine Planning and Design Institute (CMPDI) and other associated organisations to find new coal deposits to set up plants or add to coal production in the country.
According to Ministry of Coal data, in the first quarter of 2024, India’s coal drilling targets were achieved substantially by 139 percent in January, 151 percent in February and 179 percent in March.
This means that within the first three months of 2024, India achieved 40 percent of the annual target set by the ministry.
“We need to minimise coal exploration and setting up new power plants because we run the risk of having stranded assets (assets with fewer returns),” Garg asserted. “Coal is a long-term commitment and, while demand may be high right now, costs of renewable energy are only going down and it is the energy source of the future.”
“Why would you want to invest in expensive coal power then, which you’ll have to give up in a few years anyway as the world transitions to clean energy,” she asked.
(Edited by Richa Mishra)
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