India needs power capacity addition as fast as possible to meet peak demand: RK Singh

New Delhi: Minister for Power and Renewable Energy RK Singh said that the government is following a four-pronged strategy to meet the rapidly surging power demand under which all power generating capacities in the country have been directed to be available fully for scheduling, a mandate to import coal for blending has been issued to power generating companies (GENCOs), capacity addition is being planned as fast as possible and gas-based capacities have been put on stand-by. Addressing a press conference on Monday, Singh stressed, “If the peak power demand keeps on increasing, India requires capacity addition as fast as possible to meet the growing demand.”

The minister met with his counterparts in states and union territories on Monday and discussed ways to address the growing power demand in the country during a National Conference of Power and New & Renewable Energy Ministers of States & UTs. The conference began on Monday and will go on until Tuesday.

Govt asks DCB, ICB gencos to run power plants on full capacity

The minister said that during the meeting, he directed all state power generators to have all their generating units working at full capacity. “We have told states that they cannot not run their power plants at full capacity and then ask the Central government to allocate power from the Central pool. The Central pool will be used to make up for the shortfall that exists after states have been running their power plants at full capacity,” said Singh.

In order to ensure that no power generation capacity is idle, the government is also planning to come up with a rule under which fixed charges will be payable to GENCOs only when they declare their full capacity as available for scheduling either by Power Purchase Agreement (PPA) holder or on the power exchange. “We have ensured that all capacities have to run. And we are also going to come up with a rule under which GENCOs will get fixed charges only if they offer their capacity for scheduling either by the PPA holder or by the exchange. Nobody can keep their capacity idle (both domestic coal-based and imported coal-based plants). The availability of more power on the exchanges will ensure lower cost,” Singh told the media during the interaction.

India will need coal import despite rise in coal production: Singh

Commenting on the mandate given by the government to domestic coal-based plants to import 6 percent coal until March next year for blending, Singh said that India will need coal imports despite a rise in coal production because power demand has been increasing 20 percent every month for the last three months. “Coal India has increased its production. But the power demand has surged at least 20 percent every month over the last three months, and there has been a shortfall of at least 2.5 lakh tonne every day despite improved coal production by Coal India,” said Singh. According to official figures, the gap between coal supply and coal consumption by thermal power plants has stood at 4.1 MT in April, 1.9 MT in May, 3.9 MT in June, 2.4 MT in July, 7.1 MT in August, 8.3 MT in September and 6.6 MT in October.

Need to add power generation capacity as fast as possible: Singh

To meet the rapid rise in power demand, the government and the states have agreed to add power generation capacity as fast as possible, said Singh. “During the meeting today, we agreed that we need to add capacity as fast as possible, both conventional as well as renewable… more renewable than conventional. But we are very clear in our minds that we will not compromise on the availability of power for our economic growth. We will be adding renewable energy along with storage to have RTC power, but at the same time, the role of conventional power will continue until RTC RE power becomes substantial.”

Singh said that around 40,000-50,000 MW of thermal power capacity is already under construction in the country. During the meeting, the government has also asked state governments to add thermal power capacities in coal-bearing areas close to pitheads or within 500 km to address the problem of logistics for coal transportation. In addition, the government is also planning to add a lot of hydro projects. “But all of these projects have a long gestation period. So, the faster way to add capacity is to add renewables along with storage. And we are adding RE capacities rapidly. Last year, we added almost 15,000 MW, which was commissioned. This year, again, we are hoping to commission the same quantity,” said Singh.

Peak power demand

The Central Electricity Authority (CEA) has projected a peak power demand of 256.53 GW for 2024. Detailing the government’s plan to meet it next year, Singh said that he is expecting around 12,000 MW thermal power capacity to be commissioned by March, which will be enough to meet the peak. “We have substantial capacity in the offing. By March, we expect around 12,000 MW (thermal) to be commissioned. And that will make up for the shortfall. Second, we have gas-based capacity which we keep on reserve. We have plans to procure gas from GAIL. So, we will utilise our gas-based capacity to meet the demand during non-solar hours,” said the minister.

Referring to the thermal power bundling guidelines floated by the Ministry of Power, Singh said that the Centre has also asked GENCOs to use renewable energy during day-time and supplement it with thermal power at night, a move which is expected to also bring down the cost of electricity.