Does India need more coal power?

Source: Business Standard

Relevance: India needs to rethink the relevance of coal-based plants at present.

Synopsis: Critical analysis on the future of coal plants in India.

Arguments in favour of doing away with additional coal-based capacity

Several reasons are being cited in support of this argument. They are,

• First, need to meet the Paris Agreement target of limiting temperature rise to only 1.5 degrees centigrade by 2100 when compared to pre-industrial levels.
• Second, coal-fired plants in India are already operating at a very low plant load factor (PLF). It is possible to generate additional power at a relatively low marginal cost.
• Third, India has envisioned a massive programme of having 450 GW of renewable capacity by 2030 and it is growing at the rate of about 25 per cent annually in the last few years.
• Fourth, with the cost of batteries declining progressively, storage has become a viable option, which will help in attaining grid stability.
• Fifth, green hydrogen may become a viable option by 2030 and will be able to provide long-term storage solutions.
• Sixth, coal-based developers will find it increasingly difficult to find lenders for their projects due to increasing divested from coal.

However, India needs to look into the following issues in detail before coming to a conclusion.

• First, India needs to estimate the demand for electricity for the future in 2030. Various estimates suggest India needs 2,200 billion units (BUs) to 2,800 BUs depending upon the assumptions made.
• Second, need to estimate the shape of our load curve in 2030. Need to understand whether the load curve will be the same as it is today where the peak demand will be at around 8pm or will it shift to sometime during the daylight hours.
• Third, need to have a realistic estimate about the feasibility of achieving a renewable capacity of 450 GW by 2030.
• Fourth, though battery costs may have come down by 80 percent approximately in the last decade, there is apprehension that further decrease in costs may no longer be so dramatic. Even at today’s battery prices, it is economically viable to have storage of approximately four hours only.
• Fifth, low PLF does not necessarily mean that India does not need any further fresh capacity. PLF is only the average use of the capacity of the generating station over the year. There could be certain hours of the 24-hour dispatch period where the plant may have to operate at more than 80 percent of the load, for a short period of time.

In conclusion, it would be a significant achievement for  India if it can do away with more coal-based plants other than the ones under construction. However, this can only happen after a thorough study clearly establishes that we can meet the demand for electricity without new coal-based plants.