Are We on the Right Track?

The Indian economy is flourishing at a rapid pace, thus seamless supply of high quality power is very essential to support this growth momentum. Therefore, for the nonce, we have to increase our thermal power capacity. However, as per our government’s target, we will steadily approach towards complete renewable power-based economy… - P. K. Chatterjee (PK)

In New Delhi, on 21st November 2023, the Union Minister for Power and New & Renewable Energy R. K. Singh had an interaction with stakeholders in the power sector. The agendum was to review thermal power capacity addition and facilitate the industry to overcome any problems being faced by them. In the meeting, addressing the PSUs and industry, the Power Minister informed everyone about the government’s decision to add 80 GW thermal power capacity by the year 2031-32.

According to the REN21 Renewables 2022 Global Status Report, globally India stands 4th in Renewable Energy Installed Capacity (including large Hydro), 4th in Wind Power capacity & 4th in Solar Power capacity. When our country is so highly focused on harnessing renewables, then the question arises – why has our government suddenly made such a decision to invest in thermal power?

Power Minister Singh also focused on that point.  He said, “Power demand of the country has increased at an unprecedented rate due to rapid growth of the economy. India needs 24×7 availability of power for its economic growth; and we are not going to compromise on availability of power for our growth. This power cannot be achieved by renewable energy sources alone. Since nuclear capacity cannot be added at a rapid pace, we have to add coal-based thermal capacity for meeting our energy needs. We have 27 GW under construction, and we had thought that we would add another 25 GW. But we have decided that we will start work on at least 55 GW – 60 GW of thermal capacity. As demand keeps accelerating, we will keep adding this capacity.”

How prudent this decision is that has already been verified in January 2024. According to a PTI bulletin, “India’s power consumption grew nearly 6% to 133.83 Billion Units (BU) in January 2024 as compared to the year-ago period, according to government data. In January 2023, power consumption stood at 126.30 BU, higher than 111.80 BU recorded in the same month a year ago, the data showed. The peak power demand met – the highest supply in a day – rose to 222.32 GW in January 2024. The peak power supply stood at 210.72 GW in January 2023 and 192.18 GW in January 2022.”

Are we deviating from our renewables harnessing target?

Not at all.

In line with the Prime Minister’s announcement at COP26, Ministry of New and Renewable Energy is working towards the target of 500 GW of installed electricity generation capacity from non-fossil sources by 2030.

A view of launching of Powerthon 2024…

Further, in its Nationally Determined Contribution (NDC) submitted to the United Nations Framework Convention for Climate Change (UNFCCC), India has committed to achieving about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

The Government of India has undertaken several specific measures to increase the production of solar energy, wind energy and green hydrogen, including:

  • Waiver of Inter State Transmission System (ISTS) charges for inter-State sale of solar and wind power for projects to be commissioned by 30th June 2025 and graded ISTS charges thereafter.
  • Declaration of trajectory for Renewable Purchase Obligation (RPO) up to the year 2030.
  • Launch of new schemes and programs, including Development of Solar Parks and Ultra Mega Solar Power Projects Scheme, Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan Yojana (PM-KUSUM), Grid Connected Solar Rooftop Programme, CPSU Scheme Phase-II (Government Producer Scheme),  Production Linked Incentive Scheme under ‘National Programme on High Efficiency Solar PV Modules, National Bioenergy Programme, Renewable Energy Research and Technology Development (RE-RTD) Programme, Schemes for incentives on electrolyser manufacturing and Green Hydrogen production under the National Green Hydrogen Mission.
  • Setting up of Ultra Mega Renewable Energy Parks to provide land and transmission to RE developers on a plug and play basis.
  • Laying of new transmission lines and creating new sub-station capacity for evacuation of renewable power.
  • Setting up of Project Development Cell for attracting and facilitating investments.
  • Standard Bidding Guidelines for tariff based competitive bidding process for procurement of Power from Grid Connected Solar PV and Wind Projects.
  • Government has issued orders that power shall be dispatched against Letter of Credit (LC) or advance payment to ensure timely payment by distribution licensees to RE generators.
  • Notification of Promoting Renewable Energy through Green Energy Open Access Rules 2022.
  • Notification of Late Payment Surcharge and related matters Rules 2022.
  • Notification of Electricity Amendment Rules 2022 with provision of Uniform Renewable Energy Tariff for Central Pool.
  • Launch of the National Green Hydrogen Mission with the objective to make India a hub for Green Hydrogen production and exports.

Phasing out the old coal-based thermal power plants

Although, Government of India has not formulated any plan to phase out the old coal-based thermal power plants in the country; Central Electricity Authority vide an advisory dated 20.01.2023 suggested that no retirement or re-purposing of coal-based power stations will be done before 2030, considering the expected energy demand scenario and availability of capacity in future, and Thermal Power Plants (TPPs) were also advised implementation of Renovations & Modernisation (R&M) and Life Extension (LE) of their units for running up to 2030 and beyond or operating in two shift mode to facilitate Solar and Wind energy integration into the grid, wherever feasible – power generation is a delicensed activity as per Section 7 of the Electricity Act, 2003 and phasing out/retirement of units is decided by power generating companies based on their own techno-economic and environmental reasons.

Nineteen coal-based units of 2,344 MW capacity have been retired in the last three years i.e., from 01.01.2021 to 31.01.2024. The state-wise list of retired coal-based units is given in Table 1 (at the top of the previous page)..

As techno-commercial and environmental feasibility of operations is very important for running an old TPP, we cannot at this point predict the future of other running TPPs. Thus, we have to follow a fail-safe path to keep our economic growth momentum intact.

A startup incubation programme for solving DISCOMs’ problems

The Review Planning & Monitoring (RPM) meeting of power sector, with states and state power utilities was held in New Delhi on 18th & 19th January, 2024, under the chairpersonship of power minister Singh. Additional Chief Secretaries, Secretaries, Principal Secretaries (Power/ Energy) of States and CMDs of State Power Utilities participated in the meeting.

During the meeting, the minister launched the third edition of the Consumer Service Ratings of DISCOMs, covering performance of DISCOMs for FY 2022-23. As per the Ratings, NPCL (Uttar Pradesh), BRPL (Delhi), BYPL (Delhi) and TPDDL (Delhi) have achieved A+ (highest) ranking among all the 62 rated DISCOMs in the country. The report has captured the current status of consumer services across various DISCOMs. It will steer healthy competition amongst the DISCOMs
and nudge them to improve upon the key services rendered to consumers.

He has also launched Powerthon 2024, which will enable budding startups and entrepreneurs having concepts and ideas for solving key problems of power DISCOMs to participate in an incubation programme, wherein they will have an opportunity to seek overall guidance, resources and nurturing by established domestic incubators to build prototypes.

Concomitantly, the power minister released Electricity Distribution Network Planning Criteria formulated by Central Electricity Authority, encompassing different aspects of distribution planning processes at sub-transmission & distribution level including introduction of smart technologies.

Addressing the power sector stakeholders, he said that power sector of the country has come a long way, with average daily availability of power supply in rural areas up from 12.5 hours per day in 2015-16 to ~21 hours. Similarly, hours of supply in urban areas improved to 23.8 hours per day from 20 hours in 2015-16. Electricity shortage is now history.

According to Singh, the sector has achieved many milestones through joint efforts that were not expected to have been achieved. Twenty nine million households have been electrified. AT&C Losses have been reduced from 27% in 2014-15 to 15.41% in 2023.

However, he expressed his concern over increase in ACS-ARR (Average Cost of Supply-Average Realizable Revenue) gap from Rs. 0.15 per unit to Rs. 0.45 per unit in last one year. In this regard, distribution utilities were directed to make concerted efforts to become viable, or else, there might be challenges in attracting investments in the future.


In order to support the fast growing economy in our country, we need to supply seamless, high quality power on 24X7 basis, thus to achieve that, we need to have reliable power generation setup. So, at present the government’s decision to add more TPPs is quite a reasonable choice.

However, our responsible and prudent government is putting its utmost effort to harness renewable energy, which is praiseworthy.

If the current plans for renewables expansion can be achieved in time, then we will have no difficulty in keeping our commitment for carbon footprint reduction. In this mission, we obviously need support from the private entities too.

By P. K. Chatterjee (PK)

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