Despite India's emphasis on renewable energy, a recent directive from the Central Electricity Authority (CEA) of India to power companies ordering them to postpone retiring any thermal units until 2030 has upset analysts who believe the action may set India's efforts toward an energy transition back. According to CEA's notice from January 20,
"Therefore, the role of thermal fleets, including outdated thermal units, becomes vital to support renewable integration," the statement read. It also noted that the Power Minister was "recommended not to retire any thermal units considering the predicted demand scenario and availability of capacity in the future" at a meeting on December 6.
No Retirement For Thermal Units
The CEA has also stated that by December 2023, an additional 5 to 16 GW of thermal capacity is anticipated. "Therefore, it is urged to all power utilities not to retire any thermal units until 2030 and to ensure the availability of units after carrying out R&M (renovation and maintenance) activities, if required," it stated. In spite of the post-pandemic rise in demand, India's coal fleet has been operating at less than 60% plant load factors (PLF) from April through December of FY2023. India already missed its 175 GW renewable energy goal by 2022, and if this trend continues, it will also miss the 450 GW objective by 2030, according to Ashish Fernandes, CEO of Climate Risk Horizons.
The Institute for Energy Economics and Financial Analysis' Vibhuti Garg, Director for South Asia, stated that "coal plants in India are already operating at low plant load factors (PLFs), and further prolonging the life of such plants will only result in lower PLFs of new and more efficient coal fleets. Discoms won't enter into PPAs with new renewable energy facilities because they will continue to meet their customers' demand from such ineffective coal facilities.
The guidance provided by CEA, according to Sunil Dahiya, Analyst at the Centre for Research on Energy and Clean Air, "differs from its own judgments and data." Old power plants can continue to run for a few more years, but two things must be ensured. Emission requirements should be followed by all outdated power plants. The future growth in demand can be met by raising the power load factor of current stations and integrating renewable energy as planned for 2030, he said, hence no new power stations should be permitted.
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