Coal is India’s energy mainstay, and the country cannot do away with it any time soon, they say. The refrain is not without merit.
But if you take a closer look, you will see much that is wrong with the coal power sector; and much of it can be rectified. If India has to burn coal to provide cheap energy — solar is cheaper but there isn’t enough yet — then, at least, the fuel must be used in as less polluting a manner as possible. But, due to rigidities in energy procurement today, more power is sourced from the coal guzzling plants rather than the more efficient ones.
The ‘cheapest first’ principle of the ‘merit order dispatch’ mechanism, therefore, has resulted in a preference for the inefficient old plants. Worse, the power from the old plants is cheap because they get cheaper coal from vintage contracts and not because they are fully depreciated.
India has about 194,000 MW of coal-fired power plants. A recent study by the Council on Energy, Environment and Water (CEEW), a Delhi-based think-tank, found that their net thermal efficiency — percentage energy embedded in the fuel that gets converted into electrical energy — is “an abysmal 29.7 per cent”.
A drag on efficiency
Efficiency of power plants is measured by a parameter called ‘station heat rate’ (SHR), which indicates how many calories of heat energy the equipment (boiler, turbine) would need to produce a kWhr of electricity — lower the better.
The average SHR of India’s power plants is 2,898 kCal per kWhr, which is not a happy number. CEEW took a more disaggregated view of SHRs and found that 29 new plants showed an SHR of 2,300 kCal per kWhr, or 37 per cent efficiency. This confirms the intuitive understanding that the older and inefficient plants drag down the overall average efficiency — and increase coal consumption. Pertinent to note that 40 per cent of India’s greenhouse gas emissions comes from coal fired in power plants.
Further, the older plants self-consume more of the electricity they generate. The ‘auxiliary consumption’ in a power plant is inevitable because the power-generating equipment itself — coal pulverisers, conveyor belts, fans and others — needs power to run.
All of this has resulted in a situation where the newly built plants, which ought to be supplying more electricity, are supplying much less. Sixty-five per cent of the country’s thermal power capacity was built in the last ten years. If operated wisely, these plants should account for more than 65 per cent of generation, instead of the 62 per cent at present. The average power generation from India’s coal power plants is about 2.7 billion kWhr a day.
And, even the newer plants are not as good as they could have been. The thermal power sector has been a laggard in adoption of technology. The world has moved from subcritical (where efficiencies are around 34 per cent) to supercritical plants (38 per cent); and is moving further to ultra-supercritical (43 per cent) and further ahead to ‘advanced ultra-supercritical’ technology — but India continued to build subcritical plants for far too long (though future additions will all be supercritical).
The first supercritical plant in India was not built until 2012. About 93 GW of coal-fired capacity has been added since, but the “bulk of them use subcritical technology”, says CEEW, quoting Central Electricity Authority data.
Thus, you have a scenario where older and inefficient plants get coal cheaper; they guzzle fuel, pollute the atmosphere and add to carbon dioxide emissions, while the newer plants wait for their turn to supply. It is estimated that 39,000 MW of coal power plants are operational after completing their economic lives, as assessed by the electricity regulator while fixing the price of electricity they would produce.
Karthik Ganesan and Danwant Narayanaswamy, the researchers at CEEW who have produced a report, did a simple exercise: If the ‘cheapest first’ method of procuring power is changed to ‘the most efficient first’, then India would consume 42 million tonnes less of coal each day. If this is done, then some 50 GW of (old) power plants would become surplus.
There might be a price to pay for the change in the short term (unless, of course, the sensible system of carbon pricing is put in place), but the less-carbon benefits are more. If coal is a necessary evil, then one should not grudge paying a price for using less of it.
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