The government has floated a scheme for replacing around 58,000 million units (MU) of thermal power with 30,000 megawatts (MW) of renewable energy (RE) by FY26. The move is aimed at speeding up the utilisation of RE power in the country’s energy mix to meet COP 26 commitments.

The exercise is expected to save 34.7 million tonnes (MT) of coal and reduce carbon emissions by 60.2 MT.

There is a scope for replacement of thermal power with RE power in the country. The existing regulations of Central Electricity Regulatory Commission (CERC) define a technical minimum of 55 per cent up to which thermal power plants (TPPs) in the country can be operated. Reduction in generation from TPPs is feasible to lower levels of technical minimum of 40 per cent in two-three years, Power Ministry said.

The ministry carried out an exercise to assess the amount of energy from TPPs that can be replaced. The TPPs in future shall operate up to the technical minimum to accommodate cheaper RE when it is available. Thermal energy from those TPPs with high tariffs is proposed to be replaced to optimise the costs of power delivered to the consumer.

“Based on the exercise, it was found that about 58,000 MU of thermal generation in central, state and private sector can be substituted with RE generation. A RE capacity of about 30,000 MW at 22 per cent capacity utilisation factor (CUF) would be required for the purpose,” it said.

Replacing thermal with RE

As per the plan, 20 per cent of the targeted thermal capacity will be replaced with RE power in FY24, followed by 35 per cent in FY25 and 45 per cent in FY26.

On the rationale behind the move, the ministry explained that replacing thermal with RE power will reduce coal consumption, thereby cutting down on carbon emissions. Besides, it will also alleviate the concerns of coal crisis. The implementation of the scheme is estimated to conserve 34.7 MT of coal and reduce carbon emissions by 60.2 MT.

Flexible scheme

Even though the station-wise targets have been worked out, a thermal generating station can substitute larger amounts of thermal power with RE power over and above the targets fixed here. The targets fixed for thermal power stations are the lowest minimum that can be achieved. However, any higher capacity can be installed/procured by them. Besides, any thermal plant which is not in the list are also eligible to replace their thermal capacity with RE.

Hydro-power generating stations are also allowed to bundle RE power. Hydro plants can explore opportunities for bundling RE power with their existing power and participate in the scheme.

All the gencos and the States have been directed to implement the scheme to reduce their tariffs, meet RPO commitments, increase utilisation of transmission lines and reduce emissions. The gencos are also encouraged to enhance their targets for replacing thermal with RE power. State Electricity Regulatory Commissions (SERCs) may also like to oversee the implementation in the interest of consumers as a reduction in power purchase costs is expected.

Revised scheme

In April 2018, the ministry issued a detailed mechanism for allowing flexibility in the generation and scheduling of thermal power stations. The flexibility was provided to gencos to increase RE generation, reduce emissions, enable compliance with Renewable Purchase Obligations (RPOs) and enhance RE capacity. In April 2022, the ministry issued a revised scheme for flexibility in generation and scheduling of thermal/hydro power stations through bundling with RE and storage power.

Accordingly, in order to increase the uptake of RE utilisation under the scheme and in furtherance of the national goal of achieving 500 gigawatts (GW) of non-fossil fuel-based capacity by 2030, a target of about 58,000 MU is fixed at national level for achievement by end of the year 2025-26. The Central, State and private sector generating stations as per the list are required to replace thermal power with RE in accordance with the year-wise trajectory.