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What is the news?
As per the report by the Institute for Energy Economics and Financial Analysis (IEEFA), the lockdowns slowed renewable energy installations in the country.
India aims to install 175 gigawatts (GW) of green energy by 2022 and 450 GW by 2030. But only 7 GW of such capacity was added in the financial year 2020-21.
What are the findings of the report?
First, as per the data of Central Electricity Authority, India was to have installed 100 GW of solar energy capacity by March 2023 which includes 40-GW rooftop solar and 60-GW ground-mounted utility scale. The country has managed to install only 43.94 GW till July 31, 2021.
Second, the amount of power traded increased by 20% over 2020. This led to prices on average increasing by 38% from the 2020 rates. As economic growth revives, electricity demand grows and average prices at the exchange increase.
Third, more access to renewable energy, particularly wind and hydropower will lead to lower energy prices.
Analysis regarding coal
Fourth, coal stocks hit a new record high of 1,320 lakh tonnes at the end of 2020-21 and exceeded the monthly averages of the previous five years. Coal India Ltd., India’s largest coal producer reduced its reliance on imported coal and replaced it with domestic coal. It had about two months’ supply.
Fifth, there is an issue of critical coal supplies in most power plants. It is even increasing.
Sixth, imported coal prices have been rising in the past few months because of resurgent demand after the pandemic mainly in China and India, Japan, South Korea, Europe and the U.S.
Seventh, greater reliance on coal imports will increase thermal power prices in India, leading to higher prices for the ultimate consumers.
What are the solutions to deal with high power demand?
Our electricity system needs “flexible and dynamic generation solutions” such as battery storage, pumped hydro storage, peaking gas-fired capacity and flexible operation of its existing coal fleet.
Government should accelerate deployment of such sources to help meet peak demand and also balance the grid at a lower cost. We need cost effective solutions and a buffer against very high prices at the power exchange during peak demand.
Source: This post is based on the article “Lockdowns slowed green energy push” published in The Hindu on 29th Sep 2021.
