Coal-based power tariff may see hike to boost renewables

To make thermal power stations more flexible to accommodate renewable energy, tariffs of coal-based electricity may be raised by as much as Rs 0.45/unit, depending on the quantum of green energy being generated by solar and wind plants. The tariff rise is about 13% of the average all-India price at which states procured non-renewable power in FY18. A recent report titled ‘Flexible operation of thermal power plant for integration of renewable generation’, prepared by the Central Electricity Authority, pointed out that “revision of tariff is essential to make profitable flexible operation of thermal units”.

Flexibility is the extent to which a power system can modify electricity production or consumption in response to variability.

The country expects to have an installed renewable capacity of 175 GW by FY22, when daily net load swings are expected to be up to 80,000 MW.

Variable electricity generation from renewables increases the flexibility requirements of power plants. “In the Indian context, while Coal is expected to provide majority of the flexibility, Hydro and Gas are also expected to play a pivotal role,” the report said. However, if gas power plants are to be used optimally for flexibility, about 45.27 MMSCMD of the fuel would be required in FY22, significantly higher than the present availability of 29.88 MMSCMD.

The report estimates that maximum flexing of thermal generation would take place on July 27, 2021. On this day, about 1,08,082 MW of solar and wind generation will be integrated into the grid when power demand would be 1,81,151 MW. This would cause thermal generation to back down to 79,207 MW with a maximum ramp down rate of 310 MW/min.

To make the grid flexible, the report has not ruled out the possibility of renewable energy curtailment, but as a last resort. Though ‘must-run’ status and feed-in tariffs for renewable energy have made the sector more viable, the report admits that the option of curtailment “looks like an aberration from the general policy of govt. of India”. Every percent renewable generation curtailment would lead to loss of 2,630 million units of renewable energy in the FY22, corresponding to monetary loss of `658 crore at an average renewable cost of `2.5/unit.

sources@financial express