How Coal Can Support India’s Decarbonisation Story
Excerpts of a conversation with Arjun Yadav of BW Businessworld:
What has led to the current coal shortage and the subsequent power crisis in the country?
Coal shortage is largely on account of the rise in commodity prices. The power plants that were importing coal are facing newer challenges as it becomes a lot more expensive. Demand is moving to domestic coal but powerplants operating on domestic coal are scampering to ensure uninterrupted supplies.
Domestic coal supply is not at fault. Coal India has grown 27 per cent in capacity. However, along with unprecedented commodity escalation of imported coal, the oil and gas side has also made the situation worse. Additionally, the import substitution of producing electricity with domestic coal is putting pressure on demand.
Does this unprecedented demand and the subsequent load on coal-fired powerplants come as a surprise?
Demand is indeed rising and it doesn’t come as a surprise. In July 2021, we had 200 gigawatts (GW) peak power demand and the latest number is at an all-time high of 210 GW demand. With economic activities reviving after Covid and the economy growing at a decent pace, power demand was expected to increase. Only the timing, due to the early and harsh summer, may be considered a surprise.
The Central Electricity Authority has projected that the energy mix will be roughly 54 per cent thermal and coal in 2030, down from 74 per cent in 2021. Looking at the aggregate demand, it’s not that coal will go down. Instead, the existing power plants will continue and incremental demand will be supported by renewables.
We need to ramp up renewable energy by 35 GW per year for the next eight years to meet the 500 GW of demand on the new capacity. Also, the existing coal-fired power plants will have to deliver the baseload to the country and take care of the peak demand through a flexible operation.
With coal-fired power plants here to stay, how do India’s decarbonisation prospects look to you?
Between COP 21 and COP 26 and the two waves of the pandemic, the renewable sector got its due attention. Coal was earlier seen as a fading sector. However, with this global supply chain disruption, especially due to energy security concerns highlighted by the ongoing geopolitical situation coupled with unprecedented price escalation and the rising power demand, the importance of coal for the Indian economy is highlighted. At GE Power India, our 10-year plan is to work and support the decarbonisation story of India with coal as part of the energy mix along with various air quality control solutions aided by more efficient and flexible power generation solutions. The journey to decarbonisation is challenging but we can solve it with technology.
What are the technologies through which we can improve efficiency and reduce harmful environmental fallout?
I have been propagating and proposing that there is a default focus on renewable energy. India, now, has the opportunity to decarbonize and create value for societies by having a decarbonisation strategy for its coal-fired power plants. Through deploying technology, we can improve efficiency, reduce tariff and reduce emissions. We can also generate more power from the same existing plants, and we can enable renewable integration to the grid.
Apart from ashes, which is being dispatched for multiple usage in the vicinity of respective power plants, we have technologies to address most emission issues. Primarily, we have three major pollutants from a thermal power plant – Sulphur Oxides (SOx), Nitrogen Oxides (NOx) and particulate materials. There are proven solutions for each of these pollutants in any utility scale power plant, i.e., Flue Gas De-Sulphurizers (FGDs) for controlling SOx, Electro-Static Precipitator (ESPs) for controlling particulate materials and Selective Catalytic/non-Catalytic Reduction solutions (SCR or SNCR) for controlling NOx. However, significant reduction in NOx emissions can be achieved by boiler design modification too. These are quite mature and proven solution worldwide. GEPIL has been a pioneer in offering these technologies in the India market. We have successfully installed the first WFGD unit for NTPC at its Vindhyachal project. We have also recently commissioned another WFGD system in our Unchahar power plant achieving ~95% reduction in SOx emissions. It is working to install WFGD in numerous other powerplants. Similarly, we have successfully implemented NOx reduction for NTPC Dadri unit through boiler modification. It is implementing the solution for various other powerplants for multiple customers. It is a market leader in ESP technology and is multiple various projects to help customers achieve mandated particulate emission levels.
Efficiency improvement can be achieved by upgrading plant systems and equipment replacing old technologies with new generation solutions. Such upgrades help powerplants achieve higher operating efficiencies. In many cases, such upgrades also help in achieving higher output, which effectively means lower per unit cost of generation.
I believe industry leaders are beginning to accept to see that in India, Net Zero 2070 or any energy generation mix target will need coal. Factors like reliability, energy security, cost of electricity generation etc., need to be considered. Policymakers and industry leaders are beginning to understand this and that, I think, is a shift in policy landscape that we have witnessed the last couple of years.
What are some reforms needed in the power sector that can contribute in making India a $5-trillion economy by 2027?
Power is a social commodity. When we understand this, politicians, regulators and the government would need to pay close attention to how they price it. The industry is facing the problem of long-term power purchase agreements (PPAs). However, for any capex investment, either in a renewable asset or in any qualified asset, there has to be a security of repayment of the investment. Investment in the power sector needs to be secured by a PPA.
Alternatively, if there’s a mature market mechanism to trade power freely like any other commodity, that can boost investor confidence. However, nothing would give better assurance than PPAs. We can also explore the possibility of extending targeted subsidies and explore a ‘GiveItUp’ movement for the power subsidy.
