Power Ministry’s 5-Year Action Plan Bodes Well for Renewables but with Conditions

The Ministry of Power and MNRE have presented their 5-year plan charting the way forward for the country’s power sector.

The Power Ministry and the Ministry of New and Renewable Energy (MNRE) recently presented the 5-year action plan (vision document) for the two ministries, charting the way forward for the country’s power sector. Aiming at developing a sustainable and competitive power sector to facilitate economic and social development.

The “Vision 2024”, came out with a warning for thermal power producers to prepare for a scenario in which there will be a larger scale grid integration of renewable energy. Clearly stating that it expects total power demand to be met by a higher share of renewable energy, requiring thermal power producers to brace for impact and amend their operations accordingly.

The two ministries said that in a scenario with 130 GW of installed renewable energy generation capacity by 2022, the Plant Load Factor (PLF- power generated vs the installed capacity) of coal plants during peak summer months could drop to 35-40 percent.

A lower PLF signals tougher times for coal-based power producers as a preference for renewable energy would eat into their business. In order to better integrate renewable energy, it has been proposed to do away with the exemptions for renewable energy transmission. Speaking at the session, Minister of Power, and New and Renewable Energy, RK Singh said that the agenda is to treat all power at par on the transmission network. “The plan is to move towards a source-neutral transmission network,” he said.

However, while the country’s overall generation has been on the rise, especially with the growth in solar and wind projects, an adequate transmission has always been and is still the biggest challenge leading to grid congestion and curtailment.

The presentation also noted that as the renewable energy capacity increases, the players will also have to pay for Inter-State transmission charges. It also stated that the capacity allocation of transmission infrastructure needs to be aligned with the growth in renewable energy projects. It mentions that transmission planning needs to be done one to two years ahead as the development period for renewable energy projects is lesser when compared to transmission projects.

It charted a vision of improving the operational efficiency of existing power plants, and aging, inefficient thermal power plants. Because while renewables may be the future of the power sector, coal is will play leading part in it for years to come.

Finally, the document stresses on the modernization of generation and transmission, improvement in utilisation of available transmission capacity, reduction in state-level congestion, facilitating the scaling up of renewable energy, elimination of curtailment, improvement in financial viability, and sustainability of the discoms as its targets.