Powering world’s most populous nation

Sumit Maitra

As per World Population Review’s (WPR) figures for 2022, India has surpassed China as the world’s most populous country. According to WPR, India’s population has touched 141.7 crore as of the end of 2022, more than 141.2 crore Chinese population number as on January 17.

This brings to focus the need to power up the nation to meet the energy demand from an ever-expanding population.

“Power demand in India will continue to rise in a steady manner for the next 30-40 years, doubling every 10 years which would translate into a yearly average growth of 6-7 percent,” says Pramod Agrawal, Chairman, Coal India.

This is in contrast to a much lower growth seen in earlier years, which has now necessitated significant rise in coal supplies.

“The electricity consumption grew by 4 percent in last 5 years and is expected to further increase by 7 percent in next 8 years,” India Energy Exchange (IEA) recently told investors.

Agrawal attributes several reasons for this, most important of which is India’s growing population and low per capita energy consumption.

“India’s population still continues to grow along with accessibility to energy. Earlier, many of India’s villages never had energy connections. Or even if there were electricity connections, availability was poor. Now, even far-flung areas are getting connected,” Agrawal said while addressing the 18th Foundation Day Lecture organised by MGMI.

“Rising population, improvement in electricity accessibility coupled with economic growth would keep driving power demand in the country which will require us to make arrangements to ensure that we meet the demand,” Agrawal said.

Slower addition to renewable energy (RE) would also drive thermal power demand.

“RE capacity was supposed to touch 170 GW by the end of 2022. But there was actual addition of only 120 GW. It is estimated that by 2030, coal’s share of energy pix would come down to 54 percent from 70 percent. However, it would be difficult to say whether it will actually turn out that way,” Agrawal added.

As per government data, India’s RE capacity addition in 2022 was 119.09 GW out of total non-fossil fuel capacity addition of 172.72 GW, the balance coming from large hydro-electric (46.85 GW) and nuclear (6.78 GW).

‘Unprecedented’ rise in power demand

Grid India (POSOCO) has reported to the government that energy demand has increased sharply and is expected to remain at increased level during the first half of FY24.

India’s coal-based power generation grew 15.5 percent to 49,757.10 million units

(MU) during the first half of January 2023 compared to 43,080.78 MU during the first half of January 2022, according to CEA.

On a month-on-month basis, coal-based generation till January 15, 2023 was up by 8 percent as compared to 46,062.85 MU during the same period of December 2022.

During April-January 15, 2022, thermal power generation has risen by 11.6 percent at 896,152.25 MU compared to 803,070.99 MU during the corresponding period of 2021. Between FY23 and FY30, CEA expects electricity demand to grow at a CAGR of 7 percent.

“Although coal supplies has increased during Q4, it is not adequate to meet the unprecedented increase in the demand for electricity,” Power Ministry said.

Steps to procure 1,500MW from imported coal-based plants

Power Ministry has decided to procure 1,500 MW from imported coal-based (ICB) power plants during April-May 2023 period, being seen as the ‘crunch period’ as during that time availability of power in the day ahead market (DAM) is expected to be less than the demand.

NTPC Vidyut Vyapar Nigam Ltd, a wholly-owned subsidiary of NTPC Ltd has been nominated as the nodal agency to facilitate the procurement of 1500 MW.

“This would ensure sufficient supply in the Day Ahead Market, which in turn is expected to have moderating effect on clearing price,” the Power Ministry said on January 23.

The seller of power, to be selected through a bidding process, shall be entitled to receive variable charges towards energy scheduled in the power exchange through at the rate of `5.34/kWh which shall be indexed for the price of imported coal, ocean freight charges and $ exchange rate.

Power Ministry sees coal supply shortfall

As per Power Ministry estimates based on