India’s stance on power sector has been changing since May 2023. Is it a lack of planning or just political messaging?

Plans to halt building new coal-fired power plants, apart from those already planned, were announced 6 months ago

By Parth Kumar
Published: Friday 24 November 2023
Photo: iStock

India’s stance on its power sector has considerably shifted in the last six months. 

The Union minister for power and new and renewable energy, RK Singh, held a review meeting on November 21, 2023 with independent and state-owned power producers. The minister said India needs to add 80 gigawatts (GW) of coal-based power capacity, compared to the 27 GW already under construction or planned, as mentioned in the National Electricity Plan 2022-32 (NEP). The addition is needed as the peak power demand in the country could go up to 335 GW by 2029-30 from the current level of 240 GW, Singh added. 

The Union minister in September 2023 stated that India may add 25-30 GW thermal electricity generation capacity in addition to the under-construction / planned capacity to meet the rising demand. 

Before that, in May 2023, it was announced that India will pause the commissioning of new coal power plants for the next five years, apart from the ones already in the pipeline, in order to boost the renewable capacity of the country. Between May 2023 and November 2023, India’s stance shifted from adding no new coal power capacity apart from planned ones to adding 80 GW of coal power capacity in the country. 

In August 2023, Singh informed the Rajya Sabha that the central government had not formulated any plan to phase out the old coal-based thermal power plants in the country. The Central Electricity Authority (CEA), vide an advisory dated January 20, 2023, suggested that no retirement or re-purposing of coal power stations be done before 2030, considering the expected energy demand scenario, the minister added. 

But the NEP, which was notified in May 2023, mentioned that 2,121.5 MW (12 plants) were under consideration for likely retirement between 2022 and 2032. Within a span of six months, the minister has made statements indicating a shift in what has been laid out in the National Electricity Plan 2022-32. But what could be the reasons behind this change? 

The rising demand for power is the first and most obvious one. The country must add 80 GW capacity as the demand will reach 335 GW by 2030, the minister said in his most recent statement. But the projection of this demand was already in the NEP when it was notified. 

The NEP projected a peak electricity demand of 366.4 GW in 2031-32, which doesn’t seem different from what Singh said in his most recent statement. If the demand was projected correctly, the planned capacity addition should have been considered accordingly within the NEP. It does not explain why the capacity additions were announced later.

The other reason stated is the limitations of energy storage technology and its costs, which limit dependence on renewable energy. However, these costs were not very different six months ago, so it does not explain why the NEP had not considered them.

Notifying a comprehensive electricity plan for the country for the upcoming decade and then putting out statements within a few months that deviate from the plan sends out a message of lack of planning and clarity in India’s strategies with respect to the power sector. 

India is also inviting private investment for coal-fired plants, despite opposition from the Western world, news agency Reuters reported on November 22, 2023. Singh asked the private companies to invest in coal projects and “not miss the growth opportunity”, the report stated. 

“This announcement of coal power capacity expansion could also be a message for the private sector to continue investing in coal power in India,” said Anubha Agrawal, programme officer for industry unit at Delhi-based think tank Centre for Science and Environment. 

The developed world’s continued dependence on fossil fuels could also be driving forces behind these statements about why India should compromise at all on its energy security when the countries that should have taken the lead in climate mitigation are retreating.

However, frequent changes in India’s stance could jeopardise the cause of climate change that India has been championing for years by setting ambitious targets and meeting them ahead of schedule (such as for renewable energy).

Even if these shifting statements are a political message to the rest of the world highlighting the importance of energy security for India, one-time clear messaging and non-contradictory stances will save us from facing any difficulties in areas where we are already achievers.

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