Draft National Electricity Plan

In Context

• Recently the Central Electricity Authority (CEA) has put up the ‘Draft National Electricity Plan‘forr feedback from stakeholders.

Draft Highlights

• Coal-based capacity:
  • It is seen that apart from the under construction coal-based capacity of 25GW, the additional coal-based capacity required till 2031-32 may vary from 17 GW to around 28 GW.
• Additional requirements for coal-based plants:
  • The Central Electricity Authority (CEA) had suggested no fresh requirement for thermal power plants during 2017-22.
  • CEA is now projecting an additional requirement for coal-based plants in the upcoming five-year periods ending 2026-27 and 2031-32.
    • The above-mentioned power plants can expand the thermal capacity base by as much as 15 percent, a notable rise compared to FY17-FY22.
• Battery Energy Storage System:
  • It is also seen that the BESS (Battery Energy Storage System) requirement in 2031-32 is varying from 51GW to 84GW, stated the document.
• Hydro-based plants:
  • It also said that in the event of delay in achievement of hydro-based plants, which are in concurred/under construction stage, there is additional requirement of coal of around 4 GW in capacity mix in 2026-27.
• Cheaper coal candidates:
  • In the event of non-availability of the base load nuclear capacity, the (study) model opts for cheaper coal candidates available to provide base load support.

Power Sector in India:

• India’s power sector is one of the most diversified in the world.
• Sources of power:
  • Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. 
  • The Indian power sector is undergoing a significant change that has redefined the industry outlook.
  • Sustained economic growth continues to drive electricity demand in India.
• The electricity sector:
  • The electricity sector could be classified into three segments: 
  • Generation
    • Generation is the process of producing power using different sources of energy. 
  • Transmission
    • High voltage power is carried from the generation plants to the distribution sub-stations through a transmission grid. 
  • Distribution
    • Electricity is finally transferred from the sub-stations to individual consumers through a distribution network.  
      • Issues with distribution:
        • One of the key concerns in the power sector has been the financial health of the distribution companies (discoms), which are mostly state-owned.  
        • Discoms have had a high level of debt and have been running losses for the past several years.

Way Ahead

• Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. 
• In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.
• Suggestions:
  • Creating an enabling ecosystem to ensure power plants work efficiently.
  • Revisiting fuel allocation and supporting the priority dispatch of efficient plants could help India reduce coal demand by up to 6 percent of our annual requirement, and set aside more coal for the proverbial rainy day.
  • Enabling discoms to undertake smart assessment and management of demand.
  • Introducing time-of-day pricing and promoting efficient consumption behaviour would help shave peak demand and avoid panic buying in the market.
  • Empowering electricity regulators to help bring down discom losses. 
• The ongoing initiatives like introducing smart metres and network strengthening, and empowering regulators would be critical to infuse payment discipline across the supply chain of the electricity sector and to keep cost recovery as a key metric.

Source: TH