June 05 -- India will avoid building new coal power plants in the next five years as it targets to boost its use of renewables to generate electricity, according to the updated National Electricity Plan by the country’s Central Electricity Authority released Wednesday.
The plan is seen as a step toward India’s target of raising the share of renewables in its energy mix by 2030, increasing its non-fossil fuel energy capacity to 500 gigawatts by 2030, and achieving net zero emissions by 2070. The targets were declared by Indian Prime Minister Shri Narendra Modi at the COP26 in 2021.
India overtook China as the world’s most populous country this year, and is the third top emitter of carbon dioxide after China and the USA, according to the World Bank.
The electricity plan, released every five years, outlines India’s strategy and priorities for power generation. Traditionally reliant on coal, India’s most recent plan now proposes to build 8,600 megawatts of battery storage systems. The plan said that no new gas power plants are being considered for investment.
According to the plan, although gas-based power generation has the advantage of fast ramp-up capability, and modern combined cycle gas turbines have a higher efficiency of around 55% compared to coal-based plants at 40 percent, India is “facing loss from gas-based stations.” This is because the domestic gas supply was “inadequate” and the price of imported liquefied natural gas was “very high,” according to the document. “The production and supply of domestic gas has not been keeping pace with the growing demand for natural gas in the country, including power sector,” the document said, as domestic natural gas is prioritized for the production of fertilizer, with the country having an agrarian economy.
With the gradual introduction of renewable energy into India’s energy mix, large-scale renewable capacity is likely to pose challenges to power generation, according to the document. One of the challenges is providing support to the grid particularly during the peak hours when solar energy is going down and the load is ramping up. The document said that “gas-based power plants can play a vital role in grid stability and provide the much needed balancing power for integrating renewable sources-based power generation into the grid, particularly in view of their fast ramp up/down capability.”
According to the document, the development of the domestic natural gas industry started in the 1960s with the discovery of gas fields in Assam and Gujarat, and assumed importance after the discovery of South Basin fields by state-owned Oil and Natural Gas Corporation (ONGC) in 1970. Afterward, private companies were allowed to enter exploration through joint ventures with national oil companies, and 100 percent foreign participation in exploration was eventually allowed.
India has seen electricity demand increase at a compounded annual growth rate (CAGR) of around 4.1 percent in the last ten years, and it projects electricity demand to grow at a CAGR of 7.18 percent in the next five years. The country’s installed power plant capacity rose to 410,339 MW in 2022. According to the document, peak electricity demand will reach 277,201 MW between 2026 and 2027 and 366,393 MW in 2031-32.
According to the Ministry of Power of India, coal and lignite account for 49.3 percent and 1.6 percent of the country’s generation capacity. The latest figures from the agency peg gas power generation at six percent, while non-fossil fuel generation, listing hydro, wind, solar and other renewables, was marked at 41.4 percent.
Recently, the ONGC said it aims to invest $12.1 billion by 2030 in a bid to balance its fossil fuel-heavy energy portfolio with green projects.