No new Power Plants required in India

It really feels weird to learn that India will be a power surplus country in the years to come. India will not require power plants any more for the next three years to come, when we are so accustomed to hear that India suffers from huge power blackouts and hence there is a rising demand for electricity in India.

As per an assessment done by the Power ministry, 30 GW of plants are abandoned due to lack of PPAs and another 50 GW is under various stages of construction in India. India already has 300 GW of power plants, operating at 64% capacity.

“Demand for electricity is not likely to rise substantially in the next three years and hence India is expected to be power sufficient without any addition. This clearly signals that any thermal power plant that is yet to begin construction should back off,” a power ministry official said.

Source: Indiatimes

Moreover India has plans to achieve 175 GW of renewable energy generation capacity by 2022. The country will not be power deficit for the first time in its history, as a result of various initiatives taken by the present government. Earlier there were problems around the distribution companies, coal supply, clearances around projects that hampered growth. Now coal output is more streamlined, which will help restart many power plants once again. The state distribution companies will also undergo major reforms to organize power supply to the end customers, with ten states already joining in.

Power Surplus/Deficit situation in India

Data from Central Electricity Authority

While the whole of India should be power surplus, some parts will still face power outs. Western India is expected to be ~7% surplus, while eastern Indian will be more than 10% power deficit. In the last two years, ~46 GW of power has been added, with 11 GW gas plants revived. In its UDAY initiative, India restructured its massively sick power distribution sector. The discom debt has been moved onto the balance sheet of the respective state governments. It remains to be seen whether the new Modi government can make the reforms work where the previous central dispensations failed.

In another news, NTPC cancelled its proposed 1 GW solar power projects in Karnataka. Also no new tender has been announced in the last few months. The face of power industry in India should change with focus on renewable energy and achieving efficiencies in the traditional grid connections and supplies. Hence the country needs to focus on successful completion of projects, to achieve its huge renewable energy installations target by 2022. These could be exciting times for India, if all goes well. It is also expected that the power demand will rise in India as industrialization increases, so the government cannot be complacent.

Inspite of all these data and figures, I am still not convinced of a power surplus India. Execution has always been an issue in the country. The discom distress is the biggest risk facing the growth of the solar energy industry in India today. The success of solar too depends a lot upon a well-functioning distribution system. Let’s keep our fingers crossed and hope for the improvement of proper infrastructural facilities and execution on ground level rather than only on papers.