Growth in Coal-Fired Thermal Capacity and Alleged Misrepresentation of Coal Quality| Ias Banenge

June 18, 2024 IAS BANENGE

Context:

According to the data on NITI Aayog’s energy dashboard, India’s coal-fired thermal capacity grew to 218 GW in FY24 from 205 GW in FY20, marking a 6% growth. Additionally, a recent report alleges that in 2014, a company misrepresented low-grade Indonesian coal as high-quality and sold it to a public power generation company in Tamil Nadu.

Relevance:

GS III: Indian Economy

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Dimensions of the Article:

Current Status of India’s Power Sector
Grade of Coal Produced in India
Challenges in the Thermal Power Sector
Strategies for Improvement

Current Status of India’s Power Sector

Demand-Supply Mismatch: The power market is facing a growing demand-supply imbalance due to a slowdown in new coal-fired power plant capacity and insufficient storage options for renewable energy.
Grid Pressure: This imbalance has strained the country’s grid managers, particularly during periods of soaring temperatures with high power demand.
Increased Coal-Fired Power: The share of coal-fired power generation increased from 71% in FY2019-20 to 75% in FY2023-24.
Thermal Plant Generation: Coal-fired thermal plants increased generation by 34%, from 960 billion units (BU) to 1,290 BU, with the average plant load factor (PLF) rising from 53% to 68%.
Thermal Capacity Addition: Over the past five years, thermal capacity addition fell short of government targets by an average of 54% annually, with the private sector contributing only 7% of new capacity.
Private Sector Contribution: The private sector added only 1.7 GW, or 7%, of the total thermal capacity in the last five years.
Investment in Thermal Power: There has been a push for new thermal power projects, including private sector investments, with a goal of adding 80 GW of new thermal power capacity by 2032.
Renewable Energy Growth: India’s solar capacity doubled to 81 GW, and wind power capacity grew by 22% to reach 46 GW.
Cost of New Plants: Setting up a new coal plant (Rs 8.34 crore per MW) is significantly more expensive compared to a solar power plant (per MW cost is much lower).

Grade of Coal Produced in India

Gross Calorific Value (GCV): Determines the grade of coal based on the heat or energy produced from burning it. Higher carbon content means better quality or ‘grade.’
Composition of Coal: A mixture of carbon, ash, moisture, and other impurities. Indian coal generally has high ash content and low calorific value compared to imported coal.
Uses of Coal: Primarily used in thermal power plants and blast furnaces for steel production, requiring different types of coal.
Coking Coal: Needed for producing coke, essential in steelmaking, with minimal ash content.
Non-Coking Coal: Used to generate heat for boilers and turbines, despite higher ash content.
Characteristics of Indian Coal: Domestic thermal coal has an average GCV of 3,500-4,000 kcal/kg, while imported coal has over 6,000 kcal/kg. Indian coal has over 40% ash content, compared to less than 10% in imported coal.
Environmental Impact: Burning high-ash coal results in higher emissions of particulate matter, nitrogen, and sulfur dioxide.
Blending with Imported Coal: The Central Electricity Authority (CEA) recommended in 2012 that blending 10-15% imported coal can be safely used in Indian power boilers.
Clean Coal Technologies: Achieved by increasing carbon content and reducing ash content through washing plants or coal gasification. The resulting syngas can be used more efficiently to generate electricity.
Coal Production in 2023-24: India produced 997 million tonnes of coal, an 11% increase from the previous year, primarily from state-owned Coal India Ltd and its subsidiaries.
Continued Reliance on Coal: Despite commitments to shift from fossil fuels, coal remains the main energy source in India.

Challenges in the Thermal Power Sector

Key Issues:

Rising Demand vs. Capacity: The growing electricity demand is outpacing the development of new thermal power plant capacity, particularly from renewable sources due to their intermittent nature.
Dependence on Coal: Coal continues to be the dominant source of power generation, despite its environmental drawbacks and escalating costs.
Private Sector Reluctance: Financial and environmental concerns are making the private sector hesitant to invest in new coal plants.
Quality of Domestic Coal: Domestic coal has a lower calorific value and higher ash content compared to imported coal, leading to increased emissions.
Insufficient Battery Storage: Large-scale battery storage solutions, essential for integrating renewable energy into the grid, are still underdeveloped.

Strategies for Improvement

Boost Renewable Energy:
- Accelerate the expansion of solar and wind energy, focusing on grid integration solutions such as large-scale battery storage.
Adopt Emission Reduction Technologies:
- Implement technologies like Flue Gas Desulfurization (FGD) and Selective Catalytic Reduction (SCR) to lower emissions from existing coal plants.
Provide Incentives for Clean Energy:
- Offer financial and regulatory incentives to encourage private sector investment in cleaner and more efficient power generation technologies.
Promote Energy Efficiency:
- Encourage energy efficiency measures to reduce overall demand and lessen the load on the grid.
Modernize Grid Infrastructure:
- Upgrade grid infrastructure to better handle the integration of variable renewable energy sources and enhance overall efficiency.
Explore Alternative Energy Sources:
- Investigate alternative energy sources such as clean coal gasification, gravity batteries, ocean energy, and nuclear power (with stringent safety protocols) to meet energy demands.