Lockdown Affected The Green Energy push (GS 3, Economics, The Hindu, Indian Express)

Lockdown Affected The Green Energy push (GS 3, Economics, The Hindu, Indian Express)

Context: According to a report published in Institute for Energy Economics and Financial Analysis (IEEFA), the renewable energy installations in the country have slowed down.  It is way lagging behind India’s target of 2022. India is committed to reducing Greenhouse gas emissions and targeting to install 175 GW of green energy by 2022 and 450 GW by 2030.  This is in contrast with the fact that only 7 gw of such capacity was added in the financial year  2020-21. One GW is equal to 1000 MW.

As per the data of the Central Electricity Authority, India was to have installed 1,000 GW solar energy capacity by March 2023, in which 40 GW was to come from rooftop solar and 60 GW was to come from ground-mounted utility scale. But only 43.94 GW could have been installed till July 2021. 

Some Facts: The IEEFA study found, While analysing the monthly volumes and prices at Indian Energy Exchange which is the largest power exchange in India, that the amount of power traded increased by 20% over 2020, by 37% compared to 2019 and by 30% over 2018. This led to prices on average increasing by 38% compared to 2020, by 8% compared to 2019, and by 11% over 2018. As economic growth revives, the demand of electricity grows and average price at the exchange increases. 

If there could be more access to renewable energy, particularly wind and hydropower, specifically wind and hydropower, it could have contributed to lower energy prices, the report says. 

As per IEEFA’s analysis coal stocks hit a new record high of 1,320 lakh tonnes (Mt) at the end of FY2020/21 and exceeded the monthly averages of the previous five years.

But most of the plants has reported the deterioration in supplies of coal.


Real Issue: Most of the plants had coal stock for 1 to 5 days. However their requirement thermal power plants is to maintain coal supplies for  at least 15 days. The real issue in most of cases is the supply at the thermal power producer end, rather than the issue of coal stock shortage at the CIL end. 

During the past few months, imported coal prices have been rising. It is mainly because of surge in demand after the pandemic Especially in emerging markets of India and China. If we rely more on imported coal then It can inflate the the prices of thermal power, leading to higher prices for the ultimate consumers. 

Way forward : IEEFA notes that the challenge of India’s growing daily peak demand does not require investment in excess baseload thermal capacity. Instead, the electricity system needed “flexible and dynamic generation solutions” such as battery storage, pumped hydro storage, peaking gas-fired capacity and flexible operation of its existing coal fleet.

Md Layeeque Azam, Economics Faculty

Download Plutus ias Current Affairs 01 October 2021

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