POWER

Ther Mal

Rising Heat across India Raises Alarm On Another Energy Crunch

High temperatures across parts of India have pushed electricity demand to near-record levels in recent weeks, triggering worries about yet another summer squeeze on power supply. Peak demand for electricity touched 211 gigawatts in January, close to an all-time high last summer that saw a 122-year-old heat record breached.

Temperatures have been as much as 11C above normal in some regions in the past week and prompted the India Meteorological Department to advise farmers to check wheat and other crops for signs of heat stress.

The unusually early onset of hotter weatherand forecasts that power consumption will rise as irrigation pumps and air conditioners are cranked up. Electricity demand could set a new high of 229 gigawatts in April, according to the power ministry. The electricity demand may rise 20% to 30% compared to last summer. There's no other option than to cut power supply.

India’s power demand likely to grow at 7% annually: S&P

IThe cold wave conditions in January 2023 drove north India’s power demand, which grew 18 per cent Y-o-Y at 186 gigawatts (GW) during the month with expectations that going ahead electricity demand will be in the range of 7 per cent on an annual basis.

The International Energy Agency (IEA) has projected that over the next three years, more than 70 per cent of the growth in global electricity demand is set to come from China, India and South east Asia combined. However, the agency expects a slightly slower growth rate averaging at 5.6 per cent per year for the 2023-2025 period.Crisil said it expects power demand to remain buoyant in the coming summer and grow 8-9 per cent Y-o-Y during April-September next fiscal (FY24).

Coal-fired power generation will continue to be the thermal fuel that will meet fluctuations in power demand and could reach new record highs during the spring season, especially during periods with higher-than-normal weather. The spring is usually the period with high demand for thermal fuels in the power sector, as hydro and renewables pick up during the summer months.

India Won't Shut Coal Power Plants Till 2030 to Meet Rising Demand: Report

Centre has asked power utilities to not retire coal-fired power plants till 2030 due to a surge in electricity demand, just over two years after committing to eventually phase down use of the fuel. India said last May it plans to reduce power generation from least 81 coal-fired plants over the next four years, but the proposal did not involve shutting down any of its 179 coal power plants. India has not set a formal timeline for phasing down coal use.

The CEA, which acts as an advisor to the ministry, cited a December meeting where the Union power minister had asked that ageing thermal power plants not be retired, and to instead increase the lifetime of such units "considering (the) expected demand scenario".

Peak power demand met - a measure of maximum power supplied during the day - rose to a record of as much as 210.6 GW on Jan. 18, 1.7% surpassing the previous peak of 207.1 GW at the height of an intense heatwave last April that caused India's worst power crisis in six and a half years.

"Peak power demand has already risen 5% this year. If it increased by another 3-4%, we could be staring at another crisis. There is no question of retiring old coal units," a senior official at a utility in south India said.

Gencos told to import coal to ensure sufficient stock till monsoon

Despite a spike in electricity demand between April 2022 and January 2023, the supplies of domestic coal have not been commensurate with the requirement, and therefore, the power ministry has asked Central as well as state generation companies (Gencos) to import coal through transparent and competitive procurement for blending, to ensure sufficient coal stocks at their plants for smooth operations till September 2023.

NTPC imported 13.87 million tonnes of coal in 2022-23, out of which 13.56 million tonnes has been imported from Indonesia while 0.319 million tonnes has been imported from Australia. Thermal power plants have been importing coal for blending from 2009 onwards and these imports varied between a peak of 48.8 million tonnes in 2015-16 to 23.8 million tonnes in 2019-20.

The gap between daily coal consumption and daily arrival of domestic coal ranged from 2.21 lakh tonnes to 0.5 lakh tonnes between April 2022 and January 2023, sources said. If there would have been no import for blending purposes, the coal stock available at domestic coal-based plants would have reduced to zero by September 2022. The average depletion was about 1.6 lakh tonnes per day during the first half of 2022-23, they added further.

Imported coal plants told to run at full capacity in peak summer: Power Ministry

The power ministry asked imported coal-based power plants to run at full capacity for three months starting March 16, invoking emergency powers under Section 11 of the Electricity Act. Power demand is expected to peak around 229 GW in April, the ministry said in a notification.

Section 11 of the Electricity Act provides that the government may, in extraordinary circumstances, ask a generating company to operate and maintain any station in accordance with its directions.

In case the existing power purchase agreements of the imported coal-based plants do not have adequate provisions to pass through the increase in cost because of higher international fuel prices, a committee will work out the benchmark rates, the notification said.Any surplus power left after meeting the power purchase agreement requirement by such units or any power for which there is no agreement will be allowed to be sold on the power exchanges.

In the current financial year, India's electricity demand hit a high 215 GW. To meet the increased projected peak demand in the coming April, about 193 GW generation would be required from thermal generating stations, the power ministry said.

IEX set to launch High Price Day Ahead Market segment in March

Indian Energy Exchange is set to to launch the High Price Day Ahead Market segment by midMarch. This will facilitate electricity generating firms to sell power at a price as high as Rs.50 per unit.

The relaxation in norms by the CERC will provide relief to three categories of power generating companies (gencos) which are those running their plants on expensive natural gas (RLNG), imported coal and BESS (Battery Energy Storage System).

Currently, there is a price ceiling of Rs.12 per unit in the Day Ahead Market (DAM) on the energy exchanges. With the current level of upper price cap, gencos having high variable costs for operating their plants are generally not keen on selling electricity on the energy exchanges and this in turn results in stranded power generation capacity.

Against this backdrop as well as the upcoming summer season, the CERC, earlier this month, allowed the introduction of a new segment -HP-DAM -- wherein electricity can be sold and bought at a price as high as Rs.50 per unit. The CERC has allowed three categories of power generators to participate in the HP-DAM market -- gas-based generating stations using imported RLNG and naphtha; units using only imported coals and BESS.

Power plants start tariff revision talks

Coal-fired thermal power plants are getting ready to begin talks on signing supplementary power purchase agreements (PPAs) after the power ministry invoked emergency provisions. Besides, thermal coal price has fallen in the global markets which could further improve their bottomline that may be reflected in their financial performance.

The power ministry had recently invoked emergency powers to direct power plants that run on imported coal to maximise output and sell surplus power in exchange. The order will be effective from March 16 to June 15.

The imported coal prices which had touched $300 per tonne last year are expected to cool to $200 a tonne. Analysts said the coal cost could go up as the unofficial import ban of Australian coal by China has been lifted which could push up demand. China has started buying Australian coal this month, signaling the end of an unofficial ban that ran for over two years, according to market sources.

Centre directs states to expedite energy efficiency activities on mission mode

The Centre and Bureau of Energy Efficiency (BEE) have directed state governments to expedite energy efficiency activities on a mission mode. This is aimed at securing the interests of future generations and the economy at large. Union Power Minister R K Singh has emphasized all state governments to consider energy efficiency as a flagship programme, aimed at reaching the central government's targets and mitigating climate change.

He advised proactive states like Andhra Pradesh, Karnataka, Chhattisgarh, Uttar Pradesh, Guja- rat, Maharashtra and Madhya Pradesh etc. to identify the energy saving investment potential in their respective States and focus on energy efficiency related investments that will help the states to boost the economy, improve energy performance in key sectors, create employment and improve the environment.

AbhayBakre, Director General of BEE directed state energy saving bodies to strive to achieve the national energy savings target of 150 million tonnes of oil equivalent of energy, which equates to 750 billion units of electricity. Further, APSECM has been directed to finalize the State Energy Efficiency Action Plan for each sector, including achieving the state-specific energy target of 6.68 million ton of oil equivalent (mtoe) by 2030.

Indian Government releases draft guidelines for pumped storage plants

The Government of India has released draft guidelines to promote the development of pumped storage projects in the country, and are seeking comments from stakeholders by the end of this month. With pumped storage plants expected to play a key role in grid stabilization and to help meet peaking power demand, the government said it felt the need to formulate a separate guideline to promote its development.

To date, the Central Electricity Authority (CEA) estimates that the on-river pumped storage potential is 103GW in India, with a large number of off-river pumped storage potential also available. The government is proposing suitable support to be extended to identify and evaluate this potential.

In India, there are currently eight projects (4745.60MW) in operation, four projects (2780MW) under construction, and 24 projects (26630MW) allotted by States which are under different stages of development. The draft National Electricity Plan (NEP) published by the CEA indicates that 18.8GW of pumped storage projects and 51.5GW of BESS (5 hour) are required to integrate planned renewable energy capacity addition to 2032.