EDITORIAL ANALYSIS: The problems plaguing thermal power generators – INSIGHTSIAS

 Source: The Hindu

• Prelims: Current events of national importance, Environmental pollution and degradation(Coal, Paris Agreement)
• Mains GS Paper III: Conservation, Thermal energy demand, environmental pollution and degradation, Coal.

ARTICLE HIGHLIGHTS

• India’s power demand touched a record high of 211 MW even though the coal shortage continued with coal stocks available only for eight days.
• In the last two months, as temperatures soared and the economy recovered, the power demand breached the 200 MW level on several occasions.
• To bridge the gap between shortage in domestic supply and increasing demand, power generating companies or ‘gencos’ were directed to use imported coal for 10% of their requirement, failing which their domestic supplies would be cut.

 

Puucho ON THE ISSUE

Context

Coal:

• It originates from organic matter wood, when large tracts of forests are buried under sediments, wood is burnt and decomposed due to heat from below and pressure from above.
• This phenomenon makes coal but takes centuries to complete.
• Classification of Coal(on the basis of carbon content and time period):

Anthracite:

1. It is the best quality of coal with highest calorific value and carries 80 to 95% carbon content.
2. It ignites slowly with a blue flame and is found in small quantities in Jammu and Kashmir.

Bituminous:

1. It has a low level of moisture content with 60 to 80% of carbon content and has a high calorific value.
2. Jharkhand, West Bengal, Odisha, Chhattisgarh and Madhya Pradesh have deposits of Bituminous.

Lignite:

1. It carries 40 to 55% carbon content and is often brown in colour with high moisture content thus, gives smoke when burnt.
2. Rajasthan, Lakhimpur (Assam) and Tamil Nadu have deposits of Lignite.

Peat:

It is the first stage of transformation from wood to coal with low calorific value and less than 40% carbon content.

 

                     

 

• Top 5 States in terms of total coal reserves in India are: Jharkhand > Odisha > Chhattisgarh > West Bengal > Madhya Pradesh.
• The leading coal producers of the world include China, US, Australia, Indonesia, India.

 

Reasons for increasing power demand and coal shortage:

• India is the second largest producer of coal, with reserves that could last up to 100 years.
• The domestic production of coal stagnated between FY18 andFY21, but revived in FY22.
• The power demand too surged owing to economic recovery and hotter weather conditions.
• Until FY20, domestic sources contributed to about 90% of the power sector’s coal receipts; the remaining was filled by imports. But by FY22, the reliance on imports dwindled to 3.8% which built pressure on domestic supplies.
• The coal imported by power plants declined to 27MT in FY22 from 66.06 MT in FY17. Coal imported for blending purposes by power plants that run on indigenous coal declined to 8 MT in the last financial year, from 19.7 MT in FY17.
• Past data show that importing coal for blending has always seen few takers. A bulk of imports was made by power plants designed for imported coal. Notably, their share of imports saw a decline of 60% in FY22 since FY17.
• This dip in imports can be attributed to the skyrocketing prices of coal in the international markets.
• The price of imported coal is nearly 5-6 times higher than domestic supply.

 

 

Perennial bottlenecks:

• The use of imported coal will also push up the price of power supply to the power distribution companies or Discoms, often dubbed as the weakest link in the power sector chain.
• Delays in payments by discoms create working capital crunch for generating companies which in turn inhibits them from procuring an adequate quantity of coal.
• According to the 2019-20 report by the Power Finance Corporation, discoms had accumulated losses up to ₹5.07 lakh crore and were therefore unable to pay generators on time.
• Discoms in Tamil Nadu, Rajasthan and Uttar Pradesh are the most financially stressed.

 

Reasons for debt issues of Discoms:

• Discoms are bleeding because the revenue they generate is much lower than their costs.
• This is evident from the gap between the average cost of supply and average revenue realized.
• Tamil Nadu, Jammu andKashmir, and Rajasthan have the widest gap between revenues and expenses of discoms.
• Apart from providing power at cheaper rates, some State governments do not revise tariffs periodically.
• Delay in getting compensation from the government also compounds the woes of cash strapped discoms.

 

Extent of India’s Dependence on coal:

• The installed capacity for coal based power generation across the country was 2.04 lakh megawatt (MW). This accounts for about 5% of power from all sources.
• Coal based power stations are retired periodically which happens all the time. But is not fast enough nor are new additions being halted.
• Coal is still most inexpensive compared with other present sources of energy.
• According to the IEA’s Coal Report 2021,India’s coal consumption will increase at an average annual rate of 9% to 1.18billon tonnes in 2024.

 

 

 

Move away from coal is important:

• The threat of global warming is looming over the planet, bringing unprecedented natural calamities. An effective way to keep the danger at bay is to cut the use of fossil fuels coal,natural gas and oil. About 80% of the world’s energy requirements are met by these three fuels.
• Coal emits nearly twice as much carbon dioxide as natural gas and about 60% more than oil,on a kilogram kilogram comparison having a greater role in global warming.
• Combusting coal also leaves behind partially burnt carbon particles that feed pollution and trigger respiratory disorders.
• The power sector in India, which uses the majority of the coal, accounts for 49% of total carbon dioxide emissions, compared with the global average of 41%.
• Environmental issues associated with Coal Mining that is air pollution, water pollution, soil pollution etc.
• Opencast mining and underground mining of coal affect the vegetation pattern.
• Several occupational hazards are associated with coal mining: Pneumoconiosis (by inhaling coal dust), allergies and asthma, noise hazard etc.
• The freeway to coal will raise the local pollution in the country. The government has notified new emission norms for coal-based thermal power plants. But the implementation on the ground has been inadequate.
• Coal- and lignite-based thermal power plants on an annual basis emit 3 billion tonnes of carbon dioxide equivalent/year, which is a third of the total greenhouse gas emissions in the country.

 

Difficulty for India to move away from coal:

• The international cost of natural gas has increased in the recent past from a level that was considered already too high to be financially viable.
• Of the 25,000 MW of gas based power plants, about 14,000 MW remains stranded, or idle, because they are financially unviable.
• While renewable energy sources are cheaper than coal, their ability to generate power consistently is subject to the whims of nature, the wind and the Sun.
• Storage technologies are still not mature enough to help renewable energy sources become reliable generators of power.

 

Reasons for increasing coal demand:

• Iron and steel production uses coal and there are not many technologies to replace the fuel immediately.
• Continued expansion of India’s economy is expected during 2022-2024, with annual average GDP growth of 7.4%, fuelled at least partially by coal.
• India’s push to domestic coal mining through both Coal India and auction of coal blocks to private companies, coal usage in India will increase as it plateaus in other parts of the world, including China.
• The central government has opened up coal mining for the private sector, claiming it as one of its most ambitious coal sector reforms.
• The government anticipates that it will bring efficiency and competition in coal production, attract investments and best-in-class technology, and help create more jobs in the coal sector.

 

Initiatives by India to shift to renewable energy:

• National Solar Mission (NSM): The 100 GW solar ambition at the heart of the world’s largest renewable energy expansion programme
• The Wind Energy Revolution: Leveraging India’s robust wind energy sector to boost clean energy manufacturing and the rural economy
• National Biofuels Policy and SATAT: Building value chains to reduce fuel imports, increase clean energy, manage waste, and create jobs
• Small Hydro Power (SHP): Harnessing the power of water to integrate remote communities into the economic mainstream.
• National Hydrogen Energy Mission (NHEM): Exploring the commercial viability of a versatile clean fuel
• Production-Linked Incentive (PLI) Scheme: Integrating India into the global clean energy value chains
• National Biofuels Policy and SAYAY: Building value chains to reduce fuel imports, increase clean energy, manage waste and create jobs.

 

 

Way Forward

• India must enhance investments in the deployment of clean coal technologies throughout the coal value chain. Government power utilities must show the way by investing in the deployment of advanced clean coal technologies.
• India should also be very cautious of adding new coal capacity beyond 2030 as it risks locking in resources.
• With government’s efforts to push renewable energy due to international conventions on climate change, increase in carbon cess and other initiatives for lesser use of coal, there is a need for ‘Vision 2030 for the coal sector’, which takes into account the environmental factors such as reduction of carbon footprint, abatement of global warming.
• Strategic Decommissioning of Old and Inefficient Power Plants: It may be prudent to let old capacity fade away in due course and saving some of them as they are efficient, while focusing on such detailed analysis and weeding out the needless capacity in the pipeline, to derive long-term economic and environmental benefits.
• We need an energy transformation through which we would realize the co-benefits of local and global emission reduction. We also need the right to energy for all, as energy poverty and inequity is not acceptable.

 

QUESTION FOR PRACTICE

Discuss India’s dependence on coal and difficulties faced by India in moving away from coal energy.

(200 WORDS, 10 MARKS)