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National Electricity Plan for 2022-27

  • Category
    Economy
  • Published
    7th Apr, 2023

Context

The National Electricity Plan (NEP) 2022-27 has been rolled out which marks a discernible reversal in the policy thrust from its last edition.

Need of the initiative:

  • India is now amongst the fastest developing countries in the world in terms of GDP as well as the electricity consumption.
  • The challenge is to meet the energy needs of high economic growth & electricity consumption of about 1.3 billion people.
  • The development of an efficient, coordinated, economical and robust electricity system is essential for smooth flow of electricity from generating station to load centers (as per Electricity Act, 2003).
  • Also, optimum utilization of resources in the country, in order to provide reliable, affordable, un-interruptible (24x7) and Quality Power for All.

Highlights of the draft:

  • The coal energy thrust: The fresh draft, in a tacit admission of the ground realities, cites the need for fresh coal-based capacity ranging from 17 GW to nearly 28 GW till 2031-32.
    • This would be over and above an under-construction coal-based capacity of 25GW (1 giga watt or GW is equal to 1000 megawatts or MW).
    • An increase in the plant load factor(PLF) of coal fired plants from 55% up to 2026-27 to 62% in 2031-32.
  • The renewable energy thrust: A projected battery storage requirement in 2031-32 of between 51 GW to 84GW with a daily usage rate of 5-hours.
    • Estimated to be Rs.10 crore per MW, this could translate into investments into battery storage between Rs.5 - 8 lakh crore over the next ten years as backup for renewable capacity.
  • Battery Energy Storage System: Battery Energy Storage systems (BESS) especially based on Lithium - ion batteries are one of the storage options.
  • Hybrid generation models: This will basically perform solar energy shifts and provide backup power.
  • Hydro-based plants:
  • It also said that in the event of delay in achievement of hydro-based plants, which are in concurred/under construction stage, there is additional requirement of coal of around 4 GW in capacity mix in 2026-27.

 What are the challenges ahead?

  • The continued reliance on old, inflexible coal-fired plants for base load capacity.
    • India’s vast fleet of coal-fired thermal power plants of 200 MW series are more than 25 years old, run-on old technology and do not promise robust reliability.
  • Lack of clarityon how the renewables-dominated grid will be actually managed, despite a pronounced reliance on renewable generation for meeting capacity additions.
  • The inertia, which imparts stability to the grid, has been declining due to poor progress of hydro power and zero inertia solar generators.
  • There is also no assessmentof ramping rate for thermal plants under various scenarios of solar generation going out.
  • If battery storage is to be relied on, the total fund requirement for the period 2022-27 is estimated to be 30 lakh crore.
    • However, the CEA report has given a budget of 8 lakhs crore for BESS for a 10 year period.
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