Fresh capacity addition in thermal, hydro power tanks 69% in Apr-Nov December 25, 2018

Posted On : February 20, 2019
 

Fresh capacity addition in thermal and hydro power plunged 69 per cent in the April-November period of this fiscal, as green energy gained momentum.

Data by the Central Electricity Authority (CEA) shows only 1,330 Mw in thermal power was added as against 4,300 Mw a year ago, a fall of 69 per cent. New capacity creation in hydro power recorded a marked dip of 70 per cent, from 465 Mw to 140 Mw, in the period under review. Thermal and hydro combined saw their fresh capacity additions tumbling 69 per cent till the end of November in FY19.

An industry source said, “The thermal power sector is burdened with stranded-asset risk and is facing great difficulty in accessing finance. Long-term power purchase agreements (PPAs) are also drying up and the sector is facing increasing competition from renewable energy sources.

As per a report by US-based Institute for Energy Economics & Financial Analysis (IEEFA), the country's thermal power capacity fell by 1,100 Mw in the April-October period of the current fiscal. The addition of 600 MW at the Mahan Super Thermal Power Project in Madhya Pradesh (10 years in the planning) was more than offset by the closure of 1,799 MW of capacity, principally at two other plants - 705 Mw at Badarpur Thermal Power Station in NCT of Delhi, and 420 Mw at Ropar Coal Power Station, Punjab.

The country's latest power sector blueprint – the National Electricity Plan of 2018 (NEP 2018) – forecasts thermal power plant closures of 4,000-5,000 Mw annually over the next five years.

“Stranded assets commonly reflect a myriad of problems such as outdated technologies, legal issues around land acquisition, a geographical misfit between proposed plant locations and the distance coal supplies must travel, and unviable tariffs. TPP proposals in India general require tariffs at progressively higher rates. As a result, Indian discoms or distribution companies, which purchase electricity for supply to consumers, will not accept them given renewable energy tariffs are the low-cost solution,” the IEEFA report observed.

India's . But 2019-20 is looking a lot stronger with a building pipeline of 26000 Mw in project tenders.

As of October 2018, the country has 72.01 Giga Watt (GW) of rated capacity in renewable energy. The target is to reach an installed capacity of 175 Gw by 2022.