A Way Out of the Coal Trap

Syllabus: GS3/ Conservation/Environmental Pollution & Degradation

In Context

• It seems the government is contemplating a ban on setting up new coal-based power stations. 

Coal In India 

• About:
  • Coal is the most important and abundant fossil fuel in India. It accounts for 55% of the country’s energy needs. The country’s industrial heritage was built upon indigenous coal.
  • Indian coal offers a unique eco-friendly fuel source to the domestic energy market for the next century and beyond. Hard coal deposits spread over 27 major coalfields, are mainly confined to eastern and south-central parts of the country.
  • India is the second-largest coal importer despite having the world’s fourth-largest reserves, and coal powers nearly three-fourths of the country’s electricity demand.
• Coal-based power plants:
  • A coal-fired power station or coal power plant is a thermal power station which burns coal to generate electricity. 
  • They generate about a third of the world’s electricity, but cause many illnesses and the most early deaths, mainly from air pollution.

Ban on coal-based power stations vs power demand

• About the ban:
  • The government may need to rethink upon the ban on setting up new coal-based power stations. Although, the plants which are already under construction will be allowed to continue.
• Power demand:
  • The government has 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.
  • This would be 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, which was released recently. 

Issues

• Ban and demand mismatch:
  • The question is, How are we to meet our demand in 2029-30 if no new coal-based plants are allowed?
    • The government probably feels that the additional capacity of about 16,000 MW of coal-based capacity may ultimately not be required, primarily for following reasons.
• Different reports with different demands:
  • There are two versions of the report of the Central Electricity Authority (CEA). 
    • The first was published in January 2020 and the second in April 2023.
  • 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 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. 

• Perception of the report:
  • Historically, CEA’s power demand projections are known to be exaggerated and, perhaps, the government feels the actual demand in 2029-30 could be even lower than the projections in the 20th EPS.

• Changing shape of the load curve:
  • The changing shape of the load curve is, perhaps, another reason why the government feels this additional capacity of 16,000 MW may not be required. 
  • Traditionally, in India, there have been two peaks in a day and the evening peak is usually higher than the morning though there are seasonal variations. 
    • To meet the evening peak, which used to occur at around 7 pm, we had to rely on coal-based capacity 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 is good news since this peak can be met through solar power and hence, we can lower our need for coal-based capacity. 
  • There are some indications that the peak time may get further advanced to maybe 2 pm, which could enable us to further cut down the need for coal-based capacity.
• Retirement of units:
  • In the second version of the CEA report, the required capacity for coal-based stations in 2029-30 has come down. 
  • This decrease is on account of the reasons mentioned above and also 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.

Suggestions & way ahead

• Continuing with older units:
  • Carrying on with generating units that are more than 25 years old is not a bad idea since the station heat rate of well-maintained plants does not get adversely affected with age. 
  • The advantages of carrying on with old plants are that the transmission links are already there and that the coal linkages are maintained. 
  • However, such plants should sell their power in exchange instead of signing fresh PPAs.
• Banning new units:
  • Renouncing the need for additional coal-based capacity is also a good idea. 
  • However, we must ensure that we do not miss the targets set for the other sources, especially solar and wind-based capacities.