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Renew | August 2018

Balancing capacity is the need of the hour

Coal is the mainstay and will play a major role in India's energy mix because the plants which are already set up will continue to operate, says <span style="font-weight: bold;">Pankaj Batra, Chairman, Central Electricity Authority (CEA). </span><br /> <br /> India's concentration was on thermal capacity addition, which suddenly shifted to RE. Give us an overview of what is happening in the power sector as a whole. <br /> The sector is changing from the point of view of the generation mix. Earlier, the government policy did not talk much of renewables, but now there is lot of focus on renewables. The country already has a lot of thermal generating capacity, majorly coal, most of which are stranded. Currently, we are looking at how to relieve the problem of stranded capacity. <br /> <br /> This happened because the developers set up the generating stations without signing Power Purchase Agreements (PPAs). They (developers) saw the exchange rates, which were basically short-term and thought the short-term rates would prevail for a long time.<br /> <br /> The new Electricity Act allows setting up generation stations without a licence, as long as they comply with the technical standards for connectivity laid down by the CEA. So a lot of generation stations were set up without PPAs. Developers later found that the states have signed enough PPAs for the demand and therefore, they (states) stopped signing the PPAs further. <br /> <br /> Later, the thrust shifted to renewables. Initially, solar and wind started with high prices, which was more than that of coal. Then the Renewable Purchase Obligations (RPOs) was implemented. From the cost-plus-tariff used before, everything has now moved to competitive bidding. Solar started with Rs 17 per unit and came down to around Rs 2.50. Similarly, the rates of wind vary in different states, ranging from Rs 3.5, Rs 4, Rs 5 and Rs 5.50, depending on the high or low wind velocity in the region. These rates too have come down to the same bracket as that of solar prices.<br /> <br /> The government has taken the decision to move towards renewables to meet its commitment made in the CoP21. The increase in the quantum of capacity addition in RE, and competitive bidding also have cut-down prices. Around the world, the prices have come down drastically. <br /> <br /> <span style="font-weight: bold;">What will be the role of coal-based plants in the changed scenario? </span><br /> As far as coal is concerned, it is the mainstay and will continue to be so for a number of years to come because the plants which are already set up will continue to operate. Wind is a major contributor from the RE segment close to 35,000 MW. When wind fails, other sources need to take over and coal-based plants are the available options now. Solar generation is around 12,000 MW, which supplies for 10û12 hours a day. <br /> <br /> When the planned 100 GW of solar gets added to the grid by 2022, there are concerns about the ramp up capacity of the thermal power plants. Most of them are base-load stations, which means that they have to operate at a constant MW generation. Since installed thermal capacity exists, what is ideally required is the balancing capacity of hydro and gas-based plants which can be ramped up quickly when there is intermittency of wind and solar energies. The existing coal-based plants need to become more flexible in generation. That can be done by retrofitting them to the existing plants to make them more flexible.<br /> <br /> <span style="font-weight: bold;">Is the Indian transmission grid dynamic enough to handle pumping of 100-plus GW of RE?</span><br /> As far as transmission is concerned, there is no problem except that some procedural changes should be made. Solar and wind plants can be set up very quickly, say in one year, whereas, the transmission lines take much longer to build. The generation will come up, but the associated transmission lines will not. So the rule has to be changed to see transmission augmentation. The lines connected to the substations could be strengthened beforehand depending on the potential of wind or solar available in that area, so that the developer does not have to wait for the transmission to come up. This is under consideration and it would happen. <br /> In the withdrawal side, we do not have any problem. The grid has sufficient capacity, but in the injection side, we are in the process of laying down rules for the pooling station to make sure that the bottleneck does not happen. <br /> <br /> <span style="font-weight: bold;">What is the renewable energy target in the energy mix for 2030? </span><br /> The 2030 INDC target is to achieve 40 per cent of the energy mix from non-fossil fuels, which include RE, hydro, and nuclear. There are chances of us achieving the target much before the set deadline.<br /> <br /> <span style="font-weight: bold;">What are the chances of hydro becoming the mainstay? </span><br /> Hydro is the ideal generation to complement the renewables. But it becomes expensive and takes a longer time to set up. So that becomes a problem. It is expensive as the cost of the land increases. Also, uncertain time frames make it difficult for setting up, because of the geological surprises that come up. We are trying to see how we can reduce the costs by offsetting the hydro stations. <br /> <br /> <span style="font-weight: bold;">What about gas-based power stations?</span><br /> We do not want any more gas stations to come up - even the existing gas-based power plants are running at a pretty low load factor. It is at 28 or 32 per cent because of the shortage of domestic gas. The other issue is that imported gas is expensive.<br /> <br /> <span style="font-weight: bold;">A year back, CEA had revised the demand projections downwards. Give an update on the same</span>. <br /> From the 18th to the 19th electric power survey, a revision was made after considering various factors like Make in India, village electrification, 24/7 supply, etc. We have a mid-term review. If the demand increases beyond our forecast, we do a review exercise of demand projection. Normally, we do it once in five years, but sometimes things change fast; so we are looking at a review in two-and-half years. <br /> <br /> <span style="font-weight: bold;">What is the per capita electricity consumption for 2022? </span><br /> We considered the factors that would increase the per capita consumption in electricity and it is projected to cross 1,600 units in 2022.<br /> <br /> <span style="font-weight: bold;">- Renjini Varghese</span><br />
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