National Electricity Plan 2022-27: Coal-fired projects back on, mega lithium battery storage push in new power policy blueprint

Source: The post is based on the article “Coal-fired projects back on, mega lithium battery storage push in new power policy blueprint” published in Indian Express on 3rd April 2023

What is the News?

The National Electricity Plan (NEP) 2022-27 has been rolled out which marks a discernible reversal in the policy thrust from its last edition.

What is the National Electricity Plan?

The Electricity Act 2003 stipulates that the Central Electricity Authority (CEA) shall prepare a National Electricity Plan in accordance with the National Electricity Policy and notify such plan once in 5 years.

The first plan was notified in 2007, 2nd in 2013 and the third National Electricity Plan (notified in 2018) covers the detailed Plan for 2017-22 and the prospective Plan for 2022-27.

What are the key highlights of the National Electricity Plan 2022-27?

Coal Energy Thrust: The fresh draft, in a tacit admission of the ground realities, cites the need for fresh coal-based capacity ranging from 17 GW to nearly 28 GW till 2031-32.

Renewable energy thrust: There is a projected battery storage requirement in 2031-32 of between 51 GW to 84 GW with a daily usage rate of 5 hours.

Battery Energy Storage systems(BESS) especially based on Lithium-ion batteries are one of the storage options. The cost of the BESS is reducing in an unprecedented way making it one of the preferred options for deployment.

– BESS has various advantages of balancing the grid against load fluctuations, intermittency in generation etc.

Hybrid generation models blended with off-stream pumped storage projects, where every day, after the sun rises and solar output is more than the absorbing capacity of the grid, the rest of the solar generation can be diverted to water-based energy storage or pump storage plants (PSP). This will basically perform solar energy shifts and provide backup power. 

What are the challenges ahead in implementing National Electricity Plan 2022-27?

Firstly, the continued reliance on old, inflexible coal-fired plants for base load capacity. India’s vast fleet of coal-fired thermal power plants of 200 MW series is more than 25 years old, run-on old technology and does not promise robust reliability.

Secondly, there is a lack of clarity on how the renewables-dominated grid will be actually managed, despite a pronounced reliance on renewable generation for meeting capacity additions.

Thirdly, there is also no assessment of ramping rate for thermal plants under various scenarios of a solar generation going out.

Fourthly, if the battery storage is to be relied on, the total fund requirement for the period 2022-27 is estimated to be 30 lakh crore. However, the CEA report has given a budget of 8 lakhs crore for BESS for a 10-year period.