Why banning new coal-run power plants is a good idea

Source- The post is based on the article “Why banning new coal-run power plants is a good idea” published in “The Times of India” on 26th May 2023.

Syllabus: GS3- Energy

Relevance- Thermal energy

News– The government is contemplating a ban on setting up new coal-based power stations. The plants which are already under construction will be allowed to continue.

Why is the move surprising?

The government has also said that in order to meet the power demand in 2029-30, an additional capacity of about 16,000 MW of coal-based capacity would be required. It is over and above the capacity of about 27,000 MW already under construction.

The need for additional capacity of 16,900 MW has been cited in the report of the Central Electricity Authority (CEA) called Optimal Generation Capacity Mix. It  was released recently.

In fact, there are two versions of this report. The first was published in January 2020 and the second in April 2023.

Why does the government feel that the additional capacity of about 16,000 MW of coal-based capacity may not be required?

There are primarily two reasons.

The first reason is the demand for power in 2029-30 in the second report is based on the 20th Electric Power Survey (EPS) whereas the first report looked at the estimates of the 19th EPS. The demand for power in 2029-30 in the 20th EPS is somewhat more conservative.

The 19th EPS had projected a peak demand of 340 GW in 2029-30 whereas the figure indicated in the 20th EPS is 334 GW. Similarly, the energy demand for the 19th and 20th EPS are 2,400 BUs and 2,313 BUs, respectively.

Historically, CEA’s power demand projections are known to be exaggerated. The government feels the actual demand in 2029-30 could be even lower than the projections in the 20th EPS.

The changing shape of the load curve is the second reason. Traditionally, in India, there have been two peaks in a day. The evening peak is usually higher than the morning though there are seasonal variations.

The evening peak occurs at around 7 pm. We had to rely on coal-based capacity for meeting it as economically viable storage options were limited.

However, the evening peak is actually occurring at about 4 pm in the last two to three years. This peak can be met through solar power. Hence, it can lower the need for coal-based capacity.

Why in the second version of the CEA report, the required capacity for coal-based stations in 2029-30 has come down?

This decrease is because of a major change in policy relating to the retirement of units after they complete 25 years.

This version mentions that about 2,121 MW of coal-based capacity would be retired by 2030 whereas the earlier version of this report stated that about 25,000 MW of coal-based capacity would be retired by 2030.

The government probably feels it would be a good idea to carry on with old plants even after they have completed 25 years of operation.

The station heat rate of well-maintained plants does not get adversely affected with age. The transmission links are already there and the coal linkages are maintained.