July 2023

Thermal power is a major source of power generation in the country, accounting for a 74.6 per cent share in the total generation during 2022-23. The segment, however, has been witnessing several challenges, especially concerning growing renewable energy sources, large-scale emissions from thermal power plants (TPPs), and the build-up of stressed assets, among other things. Capacity additions in the segment have been muted in the past couple of years, with 4.5 GW and 1.4 GW added in 2021-22 and 2022-23 respectively, as against the renewable capacity addition of 15 GW, annually, during this period.

Similarly, the PLF has witnessed  a downtrend, hovering around 55 per cent to 60 per cent between 2019-20 and 2021-22. However, 2022-23 saw an uptick, with the PLF rising to 64 per cent during the year. This was primarily  driven by  an increase in power demand, attributed to the opening up of the economy following the pandemic and harsher-than-usual summers, among other factors.

While the renewable energy capacity is rising rapidly, thermal power is here to stay, at least until large scale energy storage becomes viable. The vital role of thermal generation was also evident in meeting the recent power demand surges in the country. However, the role of thermal power is changing at a fast pace from being the main source of baseload power to more of a supportive role in the grid, helping to balance the variable renewable energy generation. Operators are optimising O&M procedures, upgrading control and instrumentation, and undertaking mechanical retrofits to maintain plant performance with flexible loads. Efforts are also underway to minimise the environmental footprint of TPPs with biomass co-firing in boilers, and installation and upgradation of emission control systems.

That said, while no new coal-based capacity will be added in the next five years except for plants already at various stages of planning, the country’s thermal capacity is estimated to reach 284 GW by 2032, accounting for 31 per cent of the country’s overall capacity. Meanwhile, the total fund requirement for thermal generation capacity addition up to 2032 is estimated to be Rs 4 trillion.

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.