India's thermal power sector has seen steady growth, with installed capacity reaching 237.26 GW in 2023, growing at a CAGR of 1.26%. By 2029, the capacity is expected to rise to 244.28 GW, with a CAGR of 0.5%. Major players like Adani Power, NTPC, and Tata Power dominate the market. Coal remains the backbone, accounting for 86.5% of the sector. Key growth drivers include increased industrial expansion, rising domestic demand, and abundant coal reserves. This dynamic landscape emphasizes on the role of thermal power in meeting India's growing energy needs.

Key Highlights

1.     Coal Dominance and Energy Security: Coal India Limited accounted for about 78.73% of India's total coal production, supplying around 580 million tonnes.

2.     Strategies for Capacity Expansion: India has the fourth-largest coal reserves in the world but faces challenges in production and transportation. Enhancing coal production and the logistics network can support increased thermal power capacity.

3.     India’s Focus for the Future: The Central Power Research Institute (CPRI) is working on advanced diagnostics and predictive maintenance technologies.

Utilizing Linkage Coal for Competitive Advantage

1. Importance of Linkage Coal: Linkage coal refers to the allocation of coal supplies to power plants through long-term contracts by coal mining companies in India, primarily Coal India Limited (CIL). This system ensures a steady and reliable coal supply to thermal power plants.

Data: In 2022, Coal India Limited accounted for about 78.73% of India's total coal production, supplying around 580 million tonnes.

 2. Impact on Energy Security: Linkage coal ensures energy security by providing a consistent fuel supply to thermal power plants, thereby stabilizing power generation and minimizing outages.

Insight: According to the Ministry of Power, linkage coal significantly reduces the risk of fuel shortages, which can lead to power outages and economic losses. 

 3. Environmental Concerns: The use of linkage coal in thermal power plants raises significant environmental issues, including greenhouse gas emissions, air pollution, and land degradation.

Ongoing Research: Studies by the Indian Institute of Technology (IIT) Delhi have highlighted the need for cleaner coal technologies and the adoption of renewable energy sources to mitigate environmental damage.

 4. Economic Viability and Challenges: The economic viability of using linkage coal is influenced by fluctuating coal prices, logistical challenges, and competition from renewable energy sources.

Impact: Despite the challenges, coal remains a cost-effective option compared to renewables. However, the increasing adoption of solar and wind energy, which have seen substantial cost reductions, poses a competitive threat.

Accelerating Thermal Power Capacity in India

1. Upgrading Existing Infrastructure: Improving the efficiency and capacity of existing thermal power plants through technological upgrades and modernization.

Insight: Many of India's thermal power plants operate below optimal efficiency. Upgrading these plants can increase their output without the need for new construction.

2. Expanding Coal Production and Supply Chain: Increasing domestic coal production and enhancing the supply chain to ensure a steady supply of raw materials for thermal power plants.

Insight: India has the fourth-largest coal reserves in the world but faces challenges in production and transportation. Enhancing coal production and the logistics network can support increased thermal power capacity.

3. Public-Private Partnerships (PPPs): Encouraging collaboration between the government and private sector to invest in and manage thermal power projects.

Ongoing Research: Studies by the World Bank indicate that PPPs in the power sector can lead to improved project execution and better risk management.

4. Implementing Policy Reforms: Enacting and enforcing policies that support the growth of thermal power capacity, including regulatory reforms, incentives, and streamlined approval processes.

Environment: Effective policies can include stringent environmental norms and incentives for adopting cleaner technologies, balancing capacity addition with environmental sustainability. For instance, the Perform, Achieve, and Trade (PAT) scheme incentivizes energy efficiency in the power sector.

Case Studies

Case Study – 1 China

China faced severe air pollution problems due to the extensive use of coal-fired power plants, leading to hazardous air quality levels in many cities. The Chinese government implemented stringent emissions standards and invested heavily in upgrading existing coal plants with advanced technologies like flue gas desulfurization (FGD), selective catalytic reduction (SCR), and supercritical and ultra-supercritical technology.

Results: Between 2013 and 2018, China reduced sulfur dioxide (SO2) emissions by 70% and nitrogen oxide (NOx) emissions by 65% from its power sector.

Case Study – 2 Indonesia

Indonesia faced challenges with energy security and a high dependency on imported oil, leading to economic vulnerability and supply risks. The Indonesian government launched the 35,000 MW program to boost power capacity, primarily focusing on expanding coal-fired power generation due to abundant domestic coal resources. Additionally, they implemented policies to attract foreign investment and improve infrastructure.

Results: The plant uses ultra-supercritical coal technology and consists of two 950MW units that began operations in 2022.

Case Study – 3 Turkey

Turkey faced environmental concerns and energy inefficiencies in its aging thermal power plants, leading to higher emissions and operational costs. The Turkish government adopted the National Energy Efficiency Action Plan (NEEAP) and implemented stringent emissions regulations. They also promoted public-private partnerships (PPPs) to modernize existing plants and build new ones with advanced technologies.

Results: The Soma Kolin Thermal Power Plant was constructed with ultra-supercritical technology, significantly reducing emissions and improving efficiency. It serves as a model for future projects, balancing environmental and economic objectives.

Optimizing Output: The Imperatives for India’s Thermal Power Future

1.     Transition to Cleaner Technologies: India aims to reduce the environmental impact of thermal power plants by adopting cleaner technologies and improving efficiency.

Data: According to the Central Electricity Authority (CEA), India's average efficiency of thermal power plants is average, but newer plants with supercritical and ultra-supercritical technology can achieve efficiencies.

2.     Diversification with Renewable Integration: Integrating thermal power with renewable energy sources to create a more balanced and reliable energy mix.

Case Study: The NTPC Simhadri plant in Andhra Pradesh combines solar thermal hybrid systems with its coal-based operations, enhancing grid stability and efficiency.

3.     Emphasis on Modernization and Upgradation: Upgrading existing thermal power plants to enhance efficiency, reliability, and environmental performance.

Ongoing Research: The Central Power Research Institute (CPRI) is working on advanced diagnostics and predictive maintenance technologies.

4.     Focus on Regulatory and Policy Support: Implementing robust policies and regulations to support sustainable thermal power development.

Environment: Strong regulations ensure that thermal power plants minimize their environmental impact, contributing to national and global environmental goals.

Conclusion

India's thermal power sector, earlier driven by coal, plays an important role in meeting the nation's energy demands in between challenges of environmental sustainability. With ongoing efforts towards cleaner technologies and capacity expansion, the sector aims to balance growth with environmental stewardship.

How do you see the balance shifting between traditional thermal power investments and emerging renewable energy opportunities in the coming decade?