Date: 05/09/2022

Relevance: GS-3: Infrastructure: Energy, Ports, Roads, Airports, Railways etc. Conservation, environmental pollution and degradation, environmental impact assessment

Key Phrases: Generation, Transmission and Distribution of power, Central Electricity Authority, A pit-head plant, Coal Based Thermal Power Plant, Coal India Limited.

Context:

• In every monsoon season in India, the Power Ministry issues a warning to the Coal Ministry about impending electricity supply shortage and the latter states that there’s enough supply but logistics is the issue thus pointing fingers at the Railways.
• Every year, the three ministries involved come up with short-term solutions whereas, for the power sector to become future ready, there is a need to find a long-term solution.

Background

• A massive addition in the generation capacity, integrating the country into one transmission grid and strengthening of the distribution system are ensuring the 23 to 23.5 hours of electricity supply.
• Despite this, India is undergoing a second major power crisis since October 2021.
• Several states across the country, including Andhra Pradesh, Gujarat, Maharashtra, Jharkhand, Bihar, Haryana and Uttarakhand, are reeling under long power cuts to meet the increased demand for electricity triggered by hotter-than-normal temperatures.
• India's power demand this year has jumped by a record 40,000-45,000 MW per day as an intense heat wave sweeps through northern parts of the country, the economy expands, and electricity reaches millions of unelectrified homes.
• Power plants operate at run rates much lower than their capacity e.g. in the case of renewable energy units such as solar power, it is just one-fifth of the rated capacity.

What can be an effective solution?

• According to the Central Electricity Authority, there are 269 thermal power plants in India. Each unit has a capacity of 125-300 MW.
• A much-talked-about and suitable solution is to have pit-head power plants. A policy for such plants has been in existence for some time now.
• This is a sensible proposal according to industry players both in power and coal.

It is easier to wheel power than transport coal

• Uttar Pradesh reportedly gets the cheapest electricity from the Sasan project (Madhya Pradesh).
• A pit-head power plant cuts down on logistics and therefore it is cost saving.
• Also, a rake ferrying coal from a mine to a power plant has to return empty which increases the logistics costs.

Coal Based Thermal Power Plant

• To set up a coal-based thermal power plant, the site ideally must be selected based on the availability of -
  • Coal
  • Water
  • Land
  • Transportation facilities
  • Proximity to a coal mine and
  • Load centers
• But there are instances where it is done for political reasons. Some power plants have been built for political reasons — in the constituency of someone in power, to please the vote bank.
• According to industry watchers, it makes sense to have non pit-head power plants when there isn’t enough generation capacity and plants are running to full capacity.
• Today, most non pit-head plants are running much below capacity e.g. when Delhi did not have its own power plant, it still did get electricity.

Coal India Limited’s supplies

• It is an Indian government-owned coal mining and refining corporation, headquartered in Kolkata.
• It is the largest coal-producer in the world and a Maharatna public sector undertaking.
• While dismissing fears of coal shortage, it said that stocks at power plants are close to 30 million tonnes (mt), including imported fuel which is substantially higher than last year.
• Improved supplies from CIL helped stabilize stocks at power plants. Closing stock in August is at a six-year high, barring pandemic-fuelled slowdown in 2020.
• According to CIL, supplies to the power sector were 108 per cent of the annual action plan (AAP) target i.e. supplies have overshot the target.
• So the argument against pit-head power plants definitely loses steam. But the issue of grid connectivity may be raised.
• Besides the obvious differences in coal transportation, an important factor is which grids these plants connect to.

National grid

• The National Grid is the high-voltage electricity transmission network in India, connecting power stations and major substations and ensuring that electricity generated anywhere in India can be used to satisfy demand elsewhere.
• It is owned, and maintained by state-owned Power Grid Corporation of India and operated by state-owned Power System Operation Corporation.
• It is one of the largest operational synchronous grids in the world with 371.054 GW of installed power generation capacity as of June 2020.
• While States would like to have local plants they can connect to their own grids to reduce transmission costs, in most cases they end up with higher coal transportation costs.
• National grid connected plants will also improve grid discipline and facilitate efficient use of spare generation capacity which is crucial during the transition to integrate renewables.
• Having imported coal as a small part of the mix is important to provide fuel security and also benefit from the price cap that global markets will provide.

A possible solution

• All new plants that are going to come up should be either pit-head or have proper access to the grid.
• The non- pit-head plants can be phased out slowly. Also, to ensure no supply disruption at any end, tripartite agreements between the generators, the fuel supplier and the transporter should be entered into.
• This will also help avoid the blame game at the time of coal scarcity. All power purchase agreements should factor in these aspects.
• While logistic issues can be solved with this approach, environmental concerns can be addressed by promoting coal gasification.
• While the National Coal Gasification Mission already exists, CIL is working on Surface Coal Gasification projects.

Way Forward

• Clearly, with decision-makers aware of the challenges, now is the time to have a long-term plan and implement it.
• Short-term solutions, as the name suggests, will only have a short shelf-life.

Source: The Hindu BL

Mains Question:

Q. Setting up of pit-head power plants is vital, as it will ensure steady supply of coal and reduce logistics costs. Defining pit-head power plants, discuss how it can solve the power crisis in India. [250 Words].