Coal-based power installed capacity falls to 3-year low

Grows by 10.77% against 12.48% in 2012, while renewable grows at a record high of 18.06% during 2015

Coal production and its availability in the country might be on a high, but the growth of coal-based installed power capacity is on a decline. Touching a three year low, last year, the installed capacity grew by 10.77% against 12.48% in 2012.

The annual growth of the total installed capacity has also slowed down with only renewable-based power generation showing an uptick. The annual installed capacity growth came down to 8.78% in 2015 from 8.99% in 2014 and 12.48% in 2012 — the decade’s best. 

Meanwhile, installed capacity of renewable energy touched a record high of 18.06% during 2015. Growth of renewable has more than doubled in one year, but that was majorly due to growth in solar power, while wind battles decade-low capacity addition.

 

The government has, though, considerably improved the fuel supply position with coal auction and domestic gas availability to stranded plants. The massive push to solar power is also adding to the total capacity. 

Despite all this, power sector executives fear that the investment in the Indian power sector is likely to go in a lull phase for whole of the 13th plan period. 

“The pipeline is clearly dry for future projects. Stranded projects might start in another 2-3 years but then financials would still remain an issue,” CEO of one of India’s top three power companies told Business Standard in an earlier conversation.

Power sector experts cited that one reason is also over capacity vis a vis the demand, but the slowdown in thermal hints at a vicious circle.

“The more worrying aspect is that 2016 pipeline for thermal power looks bleak. Thermal power cycle takes four years. Even if 10,000 MW comes up by 2018-19, there would still be a mismatch with demand when the economy grows as is being envisaged,” said a power sector expert based in Delhi. He added that there is a strong likelihood that a situation if not same but similar like 2007 could crop up when capacity addition achievements were way behind the targets. 

“The comforting fact is that there is a lot of capacity that is underutilised. But if the economy is to witness double-digit growth, the power capacity addition needs to match with the uptick in the economy,” he said.

In renewable too there is a contrasting trend in wind and solar. While solar power projects to the tune of 922 MW were added to take the installed capacity to historic high of 4,600 MW, wind power capacity addition slowed down further to 1,300 MW in 2014-15. Wind power’s installed capacity addition was 1,700 Mw in 2013 and 3,500 MW in 2012.

At 24,759.32 MW, wind however continues to have a lion’s share in the total renewable capacity of 38,283.5 MW.

“It is ironic that a domestic industry like wind is on a downturn with nil capacity addition. Our indigenous wind sector enjoys dominant position in the world. Solar growth is commendable, but government can push its Make in India plan in the wind sector, which is completely based on domestic manufacturing,” said a renewable energy sector expert.

It was in 2011-12 that the capacity addition achieved outran the capacity targeted for the year. A record 52 projects, most of them allocated during 2007-09, were commissioned by the private sector. The same was during the next fiscal as well, when out of the targeted 15,154 MW, the total capacity set up was 20,121 MW. The same year saw emergence of ultra mega power projects (UMPP) of 4,000 MW. Out of the four commissioned, two are stuck for want of fuel and two are battling tariff related issues. 

Since then, no major power project including UMPP saw light of the day. In 2014, the bidding of two UMPPs saw all participating private players pull out.

2015	Jan	Dec	% growth
Coal	156190.89	173017.88	10.77
RES	31692.14	37415.53	18.06
Total	258701.46	281423.39	8.78
2014	Jan	Dec
Coal	138903.39	154170.89	10.99
RES	29462.55	31692.14	7.57
Total	234601.94	255681.46	8.99
2013	Jan	Dec
Coal	121610.88	138213.39	13.65
RES	25856.14	29462.55	13.95
Total	211766.22	233929.94	10.47
2012	Jan	Dec
Coal	104816.38	120873.38	15.32
RES	20162.24	25856.14	28.24
Total	187549.62	210951.72	12.48