The Impact of Renewable Energy on India's Thermal Power Industry

2023-02-11 09:33:21

By : JSB Market Research

In : BLOG

India is the second-largest producer of coal globally. Thus, coal is usually used to generate electricity for thermal power plants. In 2020, India produced about 12.68 exajoules of coal. The driving forces for the Thermal power market in India are rapid urbanization and industrialization. Schemes by the government such as ‘Power for All’ is adding to the surge in demand for thermal power plants. While coal dominates the thermal power plants, alternative fuels are nuclear and gas, among others.

But in the Union Budget 2023 itself, Finance Minister Nirmala Sitharaman announced Rs. 35,000 crores for investment for the energy transition. This will also help to meet the objective of achieving net-zero carbon emissions by the year 2070 and energy security for natural gas and petroleum. As of December 2021, India has generated 24.9 GW of energy and 203.190 GW of electricity from gas and coal power plants, respectively.

Compared to the thermal power industry, renewable energy sources such as solar energy occupied the power and energy sector by 77.9%. As per the estimate of CEA or Central Electricity Authority, the share of renewable energy by the year 2029-30 will increase to 44% from 18%. And the same for thermal power will see a decline to 52% from 78%.

Preference for Renewable Power Energy Over Thermal Power Plants

Several policies are marked to enhance renewable energy manufacturing in India, such as ACC (Advanced Cell Chemistry) energy storage systems and PLI for solar PV modules. Boost to renewable power energy in contrast to thermal power is favorable in SEZs (Special Economic Zones). These are incentivized for manufacturing clusters and improve the production of electricity from sources that can be renewed. In the first half of 2022, India accounted for 90.4% of its power capacity additions newly through renewable energy sources.

The renewable power sector can achieve an economic impact of USD 15 trillion by the year 2070. And it can reach the mark of USD 1 trillion as soon as by the year 2030. In the last five years, the nation’s capacity for renewable energy has doubled with sonar energy rising sharply by five times in the indicated period. To increase electricity generation in India because of a number of industrial activities as well as being a nation with the second-largest population, several thermal power projects are already ongoing with initiatives for new ones as well.

o The players in the thermal power and energy sector in India also face challenges because of difficulties in acquiring raw materials. Other deterrents are weak transmission, distribution, and infrastructure.

o And these cause issues in supplying power to residences, industries, and consumers. Thus, transmission and distribution losses are something to think about and recover. The use of renewable energy is also one of the factors affecting the growth of the said market.

o Renewable Energy Research and Technology Development Programme is introduced by MNRE (Ministry of New & Renewable Energy) for the deployment of renewable energy and to promote the development of indigenous technology, to reduce the cost, and improve the efficiency of electricity generation.

o MNRE and MoP (Ministry of Power) are also interested in SPVs (special purpose vehicles) to establish manufacturing zones for renewable energy equipment and power.

o States such as Karnataka, Rajasthan, and Telangana are among the top ten states where solar energy is the dominant source to produce electricity. For Andhra Pradesh, Gujarat, Maharashtra, and Tamil Nadu, the wind is the primary energy source.

Scenario and Progress of Thermal Power Projects in India

The Thermal Power Industry analysis India market research report contains trend information with details about key players, financial snapshot, products/services, business descriptions, business segments, key ratios, geographical segments, financial performance indicators, and others. In 2015, India consumed 16.55 exajoules of coal for energy generation. In 2020, the same was 17.54 exajoules. The steady increase in coal use for power supply shows how important the fuel is for thermal power plants in the country.

Some of the leading players in the India Thermal Power Industry and Market are India Power Corporation Ltd., Maharashtra State Power Generation Co. Ltd, JSW Energy Limited, SJVN Limited, Torrent Power Limited, Nuclear Power Corporation of India (NPCIL), Sembcorp Energy India Limited, Damodar Valley Corporation (DVC), Adani Power, CESC Limited, NTPC Limited, Reliance Power Limited, The Tata Power Company Limited, and others.

o Adani Power Limited in October 2021 announced that by March 2022 it will commission Godda Ultra Super Critical Thermal Power Project. The plant is in Jharkhand, India with a 1,600 MW installed capacity.

o By 2023, there is a plan to commission a thermal power project – Uppur. The location of Uppur Thermal Power Project will be at Ramanathapuram, Tamilnadu costing USD 1.7 billion. It will have a capacity of 1,600 MW. Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) owns this project.

o Adani Pench Power Limited (APPL) on the other hand in July 2020 planned to set up a Coal-based Supercritical Thermal Power plant of 1,320 MW (2×660 MW) capacity at Chhindwara, Madhya Pradesh. The approximate investment for the same is Rs. 7,390 crores.

o A nuclear power station - Gorakhpur Haryana AnuVidyutPariyojana (GHAVP) Units -1&2 (2X700 MW) in 2020 was in the advanced stage already. The first phase of two units GHAVP-1 and 2 (2X700 MW) comes completion target by 2025. The plant civil work along with other packages is in consideration and at different stages of tendering.

o Commissioning of Patratu Super Thermal Project by the Ministry of Power in India is also underway at Jharkhand to generate 4,000 megawatts (MW) of power from coal. To produce electricity, coal is a vital source of energy and for India, it makes for a considerable share of thermal power generation as well.

Final Words

Though renewable energy is the focus to better save loss non-renewable energy sources, the Indian Thermal Power Plant market for 2022-2027 is expected to grow at 2.3% and beyond. But because of the Covid-19 impact, some of the thermal power plants were shut for a while, and the share in the energy and electricity sector fell from 72.5% to 66%. Efficient new technologies are being developed to overcome aging power plants and replace them with considerable energy sources in both renewable and non-renewable materials to produce electricity.