Page 9 - AsiaElec Week 30 2021

AsiaElec POLICY AsiaElec

India urged to improve power distribution

and speed up coal decommissioning

INDIA INDIA’S state-owned distribution companies market that treats the whole country as a single
(discoms) could save up to $1.23bn per year if dispatch region.
they focused on efficiency rather than trying to Its findings reinforce the Central Electricity
cover costs, a new study found. Regulatory Commission’s (CERC) proposal to
An independent study by the Council on move away from bilateral scheduling of gener-
Energy, Environment and Water (CEEW) found ation and to focus on shifting to market-based
that by they should prioritise the despatch of coal economic dispatch (MBED).
power on the basis of efficiency rather than the
prevailing system, which prioritises based on Karthik Ganesan, director of Research Coor-
variable costs. dination, CEEW, and the study’s lead author,
The savings could provide much needed res- said: “The slower-than-expected growth of
pite to the discoms, which last reported a loss of power demand and the increasing competitive-
$8.4bn in 2019. ness of renewable energy in India have left our
The study also calls for the government to coal assets under-utilised. While India is con-
speed up the decommissioning of up to 30 GW templating a net-zero commitment year, its cur-
of India’s coal-based capacity. rent plants are entirely premised on renewable
The findings are based on the performance energy addition only. Given that India will con-
of 194 GW of Indian coal assets (out of a total tinue to rely on coal power in the coming dec-
capacity of nearly 205 GW) during the 30 ade, it must rein in wasteful coal use and improve
months preceding the coronavirus (COVID- generation efficiency. Decommissioning a part
19) pandemic. of the fleet today could make coal power gen-
The study found that prioritising efficien- eration more efficient and less polluting, and
cy-based despatch during this time could have accelerate decarbonisation in the power sector.”
improved coal fleet efficiency by 1.9%, resulting A separate study released by the CEEW Cen-
in annual coal savings of 42mn tonnes and a tre for Energy Finance (CEF) examined 130
reduction in greenhouse gas emissions. plants representing 95 GW of India’s coal-based
The CEEW study also recommends consid- capacity. It found that decommissioning coal
ering 30 GW of India’s coal-based capacity for assets older than 25 years (35 GW of total capac-
accelerated decommissioning. ity) as a priority could result in annual savings
The proposed plants overlap with those iden- of INR7,550 crore ($1.03bn) over the next five
tified for retirement in the National Electricity years.
Plan (NEP) 2018. These savings would be generated through
The study also recommends temporarily avoided annual capacity or fixed-charge payouts,
mothballing a further 20 GW of relatively new primarily towards operation and maintenance
capacity that does not feature in the NEP list. costs.
Factoring in planned renewables and coal Further, the savings would add up to a total of
capacity, relegating these newer plants would not $5.2bn over the plants’ remaining life.
adversely affect supply at a system level. On the other hand, the decommissioning of
In fact, relegating these inefficient plants these assets would cost $2.9bn in payouts to debt
would additionally result in a one-time saving of and equity holders and an additional $1.6bn in
$1.37bn on account of avoided pollution control compensatory payouts to the workforce.
retrofits. This suggests that decommissioning will pay
The study advocates a unified electricity for itself over a five- to six-year period.™

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