Nearly 58% of the total power supply on a daily basis is from thermal units. The coal consumption is not going to change in the present financial year as the demand is expected to increase by no less than 6%.

"For the second year in a row, the Centre has ordered the nation’s coal-fired power plants to run at full capacity. But this year's order is even more sweeping than last year's — all coal and oil-fired generators will be maxed out for the entire summer, from April through June," says a power analyst.

"We expect the demand to increase this year more than our own expectation, after two years of Covid-19. In summer, use of air conditioners in offices, houses, among others will increase the demand," said the analyst.

The Power Ministry has instructed NTPC (National Thermal Power Corporation Limited) to operate its 5000 MW (mega-watt) gas-based power stations during April and May. Other entities will add 4000 MW of gas-based power capacity during the summer.

All hydropower plants have been directed to work with Regional Load Despatch Centres and State Load Despatch Centres to optimise water usage in the current month for better availability in the future.

The ministry has also said some new coal-based plants would be commissioned by the end of this month, with an additional capacity of 2920 MW. Two thermal power units at Barauni, Bihar (2 x 110 MW) will also add to the power supply during the period. Similarly, the North Chennai third unit with a capacity of 800MW will also be commissioned by September this year. All these will increase coal consumption.

Western Region with many thermal units has consumed the maximum coal in FY23: 27826.8 tonnes. Eastern Region with 14539.8 tonnes comes second. Southern Region has consumed 13666.1 tonnes and Northern Region 13488 tonnes.

"The reason for Southern region consuming less amount of coal is availability of wind power. In states like Tamil Nadu, Karnataka and Gujarat we have plenty of wind power capacity and among the above states, Tamil Nadu has the maximum wind power capacity of 8739 MW," said a CEA official.

In Tamil Nadu during peak summer, the thermal units will be on standby. "Wind power season in the state is between May 15 and September 15. During this period, the thermal units in the state will be on standby and only when the wind power generation declines, these units will be started to provide continuous power supply," said the official.

Thus, during the wind season, the coal consumption in Tamil Nadu will be less compared to all other states.

During this period, Tamil Nadu also barters wind power with hydro power to states which need to fulfill renewable power obligation. "This year we have got orders from northern states and once the wind season begins, we will be selling wind power to these states. During January or February each year, we will get hydro power from these states as our demand will increase but supply will be in surplus in these states," said Tangedco chairman Rajesh Lakhani.

But there is good news with regard to renewable energy (RE) in the future. In the first two weeks of this month, there has been a flurry of activity in the renewable energy market, with around 4.45 GW of tenders being floated.

The tenders allotted during these two weeks include three solar tenders, one wind solar hybrid (with energy storage) and one round-the-clock (RTC) tender. Around half of these allotments (49.4%) is for RE tenders, including wind solar hybrid (with energy storage) and RTC.

Amongst solar tenders, the lowest tariff of Rs 2.55 per unit which was in a pan-India tender of 1250 MW. The tariff in both the new-age RE tenders of SECI 1200 MW wind solar hybrid (with energy storage) and REMCL RTC, was unusually high at Rs 4.64 per unit and Rs 3.99 per unit respectively.

ReNew is the most active utility scale player currently with allotted capacities (1200 MW cumulatively) in 3 of the 5 tenders in first two weeks of financial year 2024. Other active players include NTPC REL, Avaada, Acme and Ayana Renewables.

Currently, ReNew is the only company operating in the RTC segment in India, owing to its win in the first renewable based RTC tender in India back in 2021. With their wins in the latest 1000 MW RTC tender, NTPC REL, Ayana Renewable, O2 power and Sprng Energy have also entered the RTC segment.

"The government is trying its best to lower coal consumption but the problem is availability of renewable power. Battery is also another issue as solar and wind power can be saved and used later if battery is available. The SECI has started floating tenders for renewable power only with battery and probably in the coming years, the coal consumption may decline once all the renewable power projects start generating power," said the CEA official.

The government is also hoping to commission offshore wind power in the next two to three years. "Tenders are to be floated for offshore wind power in Tamil Nadu and Gujarat coast. Once these projects are ready to generate power, then India’s dependence on coal for power supply will decline," said the official.

Domestic Coal Consumption

High demand fuels 12% rise in coal consumption at thermal plants in FY23