Energy security first

The Central Electricity Authority’s (CEA) plan to raise the share of non-fossil fuels in India’s installed power capacity to nearly 70% in a decade, from 42% now, is high on intent, but seems at a tangent to the changing nature of the global energy market. There is no mistaking New Delhi’s commitment to walk the talk on emission reduction. But it ought to be no less an objective for it to meet the fast-rising energy requirements of a high-growth economy at affordable costs.

After all, many major economies, including the advanced ones, have increased the use of coal for energy after the Russia-Ukraine war broke out. That’s because prices of natural gas, which emits less than half as much when burnt to produce a unit of electricity, skyrocketed. Global gas markets are expected to remain tight in the short to medium term, if not longer.

To be sure, the CEA has tacitly acknowledged in its National Electricity Plan (NEP) 2022-2032, that gas-based power is far beyond India’s purchase capacity. It envisages not a single unit of additional capacity via this route between now and 2032, while pegging the capacity constant, at the current level of 25 giga watt (GW). However, coal-fired capacity is projected to rise significantly from 205 GW now to 235 GW by 2027 and, further, to 260 GW by 2032.

The CEA’s virtual negation of gas displays sound understanding of ground realities and exposes the fallacy of a separate plan announced by the government to increase the share of gas from a little over 8% now to 15% by 2030. With legacy (APM) fields wearing out, and “difficult” ones producing far costlier gas, that share may at best remain the same through the next decade. Even the existing gas-based power plants are either shut or operating at abysmally low plant load factor.

The domestic LNG terminals, despite their regasification costs being the lowest globally, operate much below their capacity, as buyers refuse to burn their fingers. So, additional gas, if any, from domestic sources could find users in non-power sectors like fertilisers , where the government bears the cost, thanks to the subsidised retail prices, and city-gas. Also read: Gaming needs uniform regulation Also Read Beating plastic pollution Data Drive: Microfinance gains India can learn agri-policy lessons from China Gaming needs uniform regulation There can be no quarrel with the ambition to take renewable energy (RE) capacity to higher levels, given the need to phase out the use of fossil fuels over the next few decades.

It is also commendable that RE storage via means like lithium-ion batteries is given high priority. Though some issues have cropped up over the use of imported solar modules by developers with the government wanting to promote domestic manufacturing, the proposed RE growth trajectory will likely not go amiss. But that doesn’t guarantee that the NEP’s pace of thermal capacity addition will suffice to power the economy that is meant to be on a roll for several years.

Installed capacity and actual production of electricity are rarely synchronised in the real world. Even if RE capacity (including hydro, biomass and pumped storage) is augmented from 173 GW now to the 596 GW by 2032 as envisaged under the NEP, aligning these facilities with the country’s peak power demand will be an arduous task, and could face serious bottlenecks. The share of coal in the country’s power output stood at a dominant 73% in FY23, while RE share was just 12%, despite the recent strides in capacity creation.

The policy-makers must consider securing the country’s energy security as their prime mandate. .