Power plants to run at full capacity as electricity demand rises: Singh

Union Minister R K Singh on Monday asked his counterparts in states to run all power plants at full capacity to meet the peak demand against the backdrop of rising electricity consumption and coal shortage.

The minister made the remarks at the inauguration of two-day National Conference of Power and New & Renewable Energy Ministers of States & UTs in the national capital.

"To meet the growing demand, all states need to run all power plants and at full capacity," Singh said.

He met with his counterparts in states and union territories and shared his views on steps being taken to address the growing power demand in the country, which he said is a sign of fast growth of the Indian economy.

Singh further said some states do not run their power plants at peak capacity and instead seek power from the Centre's pool. If some states are not running their plants at peak demand, "we will not be able to supplement from the central pool. We have to focus on making sure that all our plants run and all our plants run at full capacity."

The power demand has increased phenomenally. The demand increased by 20 per cent year-on-year in August, September and October 2023. This shows how fast the country's economy is growing.

"Also, we met peak demand of 2.41 lakh MW recently while peak demand was 1.9 lakh MW in 2017-18. If the peak demand grows even higher, it will not be able to met. This is one challenge that needs to be addressed."

Singh also asked states to blend domestic coal with imported coal to address supply-demand gap.

"I am certain that Coal India must have increased production, but our demand has increased faster. This has led to shortages and that's why we need to do 6 per cent blending. NTPC and DVC are doing the blending, states too should do the blending, depending on shortage of coal," he added.

The minister stressed that available coal will have to be distributed equitably among states, depending on requirements.

We don't play politics in electricity. It is a fully integrated system; power is generated in some state and consumed in 3-4 different states. Coal is produced somewhere, wind somewhere and solar somewhere else. We are not going to do any favouritism. The shortage will have to be shared by all and supplemented by all.

The minister further urged states to set up new power plants near coal belts so that issues related to long-distance transportation of coal and availability of rakes do not arise.

"We need to add capacity as well.... we need about 80,000 MW of thermal capacity under construction. All this capacity addition is being done through the public sector, private sector investment has not started coming, but I am quite certain that private sector investments will come, as we have made the system viable and the sector gives returns," Singh said.

About 10,000 MW of thermal capacity and 21,000 MW renewable energy capacity is to be added in FY24, and concrete steps are being taken to move towards total capacity of 900 GW by 2031-32, Power Secretary Pankaj Agarwal said.

On the transmission front, the country has moved to General Network Access since October 1, 2023 and new schemes are being regularly sanctioned. The Centre has sanctioned Rs 21,000 crore project to evacuate 5,000 MW renewable energy from Ladakh, he said.

"On distribution sector, we have seen significant results since implementation of Late Payment Surcharge Rules. The overdue amount has come down from Rs 1,39,000 crore to around Rs 67,000 crore.

AT&C losses of distribution utilities are coming down; under RDSS, states have already awarded works for Rs 81,000 crore against total sanctions of Rs 1,21,000 crore for loss reduction works," the Secretary said.

Agarwal further said that Battery Energy Storage VGF Scheme has been sanctioned for 4,000 MWh capacity.

"The RPOs (Renewable Purchase Obligation) have been notified under Energy Conservation Act. We have already simplified captive power plant regime and we are on our way to simplifying open access regime, to promote integration of renewable energy in the system," he said.