August 2022

Thermal power is a key contributor to the country’s generation capacity, acco­un­ting for a major 58 per cent share in the total installed base. The thermal ca­pacity of 236 GW is the mainstay for meeting the country’s power demand. Coal accounts for over 89 per cent of the installed thermal capacity while the rest is contributed by gas (10.5 per cent) and diesel (0.5 per cent).

With the rapid transition towards renewable energy, thermal power plants are undergoing cyclic and part load operations. This trend is expected to gain further momentum, especially in light of India’s recent commitments at the COP26 climate summit, to increase non-fossil fuel capacity to 500 GW and to meet 70 per cent of the energy requirement from renewable energy sources by 2030. Further, as India aims to “phase down coal”, the coal-based power generation segment would need to work towards measurable reductions in emissions.

Gencos are cognisant of the new and changing requirements and have begun taking measures to successfully transition to a flexible regime. They are adopting new-age digital and automation solutions as well as scaling up their O&M and asset management strategies manyfold.

However, the slow-paced resolution of stressed thermal assets is a key challenge in the sector. Currently, coal-based capacity of about 41 GW is stressed owing to issues such as lack of long-term PPAs, unviable tariffs in PPAs, lack of coal linkages, delays in project implementation and promoters’ inability to secure funding for completing projects. In addition, about 12 GW of gas-based capacity in the private sector is stranded or underutilised due to the unavailability of domestic gas.

Power Line’s Infocus section on thermal generation explores in detail the key trends and recent developments in this segment, as well as the major issues, challenges and the future outlook.

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