Practical Matters

Despite growth in renewables, coal-based power will continue to fulfil a large share of India's power needs. Instead of resisting the new environmental norms, power plants would do well to clean up their act

- Priyavrat Bhati

INDIA'S DEMAND for electricity is seeing a steady rise. With an increasing number of villages being connected to the grid, this demand is only set to accelerate in the coming years. Currently, around 80 per cent of India’s electricity supply comes from coal-based power. But the sector has been facing a difficult time over the past few years.

The energy needs of consumers in remote villages, where the grid has just reached, as well as in rich urban areas are not being met since power distribution companies (discoms) do not have money to buy sufficient power from generating companies. The accumulated losses of state discoms stood at R4 lakh crore in 2014-15, as per the Power Finance Corporation. The result is: millions have no electricity; an equally large number gets limited supply and practically everyone else suffers from periodic power cuts.

At the other end, due to the inability of distressed discoms to buy power, power plants are not generating electricity as per their capacity. As a result, the plant load factor (plf) or efficiency of power generation companies has steadily declined. Thermal power sector problems could worsen with the expected increase in renewable energy capacity. India has set an ambitious goal of creating 175 gigawatt (GW) of renewable energy capacity by 2022. Policies such as capital and generation incentives, priority dispatch (where power generated through renewable energy is the first to be purchased by discoms), reduced cost of transmission and cross-subsidies have favoured the growth in renewable energy. Rapidly falling solar costs have also provided a boost to renewables. The Central Electricity