Dr Ashwani Mahajan
Though, immediate danger of another power crisis due to coal miners’ strike is over, a major challenge continues to haunt the policy makers, that is, how to meet the ever growing demand for electricity.
After coal based thermal plants faced closure due to coal scam resulting from illegitimate coal block allocation and forcible import of coal to somehow save the country from shortage of power and to keep power plants working; energy sector has been going through a worst ever crisis. After Supreme Court’s decision and later issuance of ordinance by the government to somehow overcome this crisis, thermal power plants are seemingly overcoming the worst scenario; however coal based thermal power sector does not seem to be out of blues.
It is notable that execution of erection of thermal power plants with an investment of not less than rupees 10 lakh crores is pending. In the post-ordinance scenario, when auction of coal blocks would start, these projects are expected to see the light of the day. However, major question is whether these thermal power projects would be economically viable.
Coal: A Cheaper Alternative
It is true, that as on today despite several problems, coal is the cheapest alternative of producing electricity in the country; and coal based electricity production is advocated in the country for various reasons. India has third largest coal reserves in the world. Mining, transportation and usage of coal are much easier in the country. However in future coal based energy production may face various hurdles. One such hurdle may come from international community; as due to the dangers of global warming, India may face pressure to limit use of coal. Recently USA and China reached a bilateral agreement, according to which China will peak its emissions of green house gases and later it would start reducing the same. In such a scenario, India would also face pressure to reduce its green house gases emissions. Coal based thermal plants emit huge amount of green house gases, which lead to rise in earth’s temperature, significantly. Thermal power plants work for many decades; and thermal power if erected now, may face pressure to close down later, to help reduce global warming in the interest of the humanity. Due to this reason, even availability of finance would be a major issue.
Secondly, price of coal may rise in future, as there is an upward tendency in running and transport cost of coal. Despite government’s best effort to avert coal crisis, coal prices are bound to increase in future. We should also learn from our earlier experience that when in the past, coal supply was affected, forced import of coal led to worsening of our current account deficit in the balance of payment and rupee weakened to a low level of nearly rupees 69 per dollar, which complicated our problem of inflation.
Thirdly thermal power plants require huge amount of water, which is becoming scarce day-by-day.
Competition is with Solar Energy
It is an open secret that cost of thermal power is rupees 4 to 5 crores per megawatts; whereas cost of solar plant is nearly rupees 7 crores per megawatts. But solar power plants can produce electricity at nearly zero running cost. Apart from this it is not practical to construct small captive coal based thermal plants, however, solar power plants are possible is any size and capacity. Now when it is possible even to send electricity produced by solar plants, to the grid, solar power is set to give a tough competition to the coal based power.
Today, distribution of power in the country is a big problem. Whether it is a theft of power or inefficiencies is the transmission, a huge amount of electricity goes waste. Today, transmission and distribution losses in the country range between 13.5 percent and 58.5 percent in different states. By installing solar panels on roof tops we can provide electricity in a decentralised manner. This would end inefficiencies in distribution and commercial establishments, institutions and even households can meet their requirements by installing solar power.
As we feed electricity in the grid from thermal plants, we can feed solar power also into the grid. States like Karnataka, Tamil Nadu, Andhra Pradesh etc. have already started net metering system, in which one can feed electricity produced by solar panels and in case of need, power can be drawn from the grid. Customer then is billed on the net electricity drawn from the grid.
On the one hand, cost of producing electricity by conventional sources like coal and oil is becoming costlier and cost of solar panels has been going down day-by-day. In the past cost of solar panels used to be $ 5 per watt which has come down to less than a dollar. At the same time, capital cost of conventional power plants has been rising. Cost of thermal power plants, which used to be rupees 2 crore, a megawatt, has increased to Rs. 4-5 crores a megawatt now. Therefore even if cost of producing conventional power may be slightly low, for various reasons solar power becomes relatively cheaper in near future. For distant places, where electrification is yet to take place solar power can definitely turn out to be a cheaper alternative as transmission and distribution expenses could be avoided.
The most important fact is that generation of solar power has ‘zero effect’ on the environment and therefore ever rising demand for electricity in the nation can be easily met from solar power, without causing pollution. Today India is far behind the developed countries in terms of per capita consumption of electricity. Today per capita consumption of electricity is merely 574 kilogram equivalent of oil in India, whereas the same is equal to 7069 kilogram per capita equivalent of oil in USA. Demand for electricity is bound to increase with growth in incomes, which would be difficult to be fulfilled from thermal power.
Need of the hour is that there should be rethinking on giving go ahead to the pending thermal power projects, which have been approved in the past and future power needs be met by giving preference to the non-conventional sources especially wind and solar.
(The author is Associate Professor, PGDAV College, University of Delhi)
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