Two-thirds of electrical power could come from non-fossil fuels by FY32

India should have more than two-thirds of its electrical power generation ability from non-fossil fuel sources by 2031-32, moving by a decade-long plan rolled out by the Central Electricity Authority (CEA). The percentage of non-fossil fuel-based ability is likely to rise to 57.4% by FY27 from around 40% as of March 2022 and further to 68.4% by FY32, said National Electricity Plan, which is released every five years.

The plan provides a review of the projections for FY17 to FY22, detailed capacity addition requirements during FY22-FY27, and plan projections for FY27-FY32. Growing environmental concerns and global thrust on adoption of clean energy generation technologies is going to have an impact on the share of coal-based installed capacity in the country in the foreseeable future, though the share of coal-based generation may continue to be high, the plan said.

Operation of coal-based plants in a more flexible mode, unlike as base load stations earlier, needs to be emphasised in the wake of huge intermittency and variability of renewable power generation. CEA has forecasted an additional coal-based capacity requirement varying from 19 GW to around 27 GW by FY32 on top of under-construction coal-based capacity of 26.9 GW.

As per the plan, overall power capacity addition needed in FY22-FY27 to meet the peak demand and energy requirement of FY27 is 212 GW, comprising 32 GW of conventional capacity and 180 GW of renewable-based capacity. Similarly, capacity addition requirement during FY27-FY32 to meet the peak demand and energy requirement for FY32 is 292 GW, including 32 GW of conventional capacity.

The projected peak demand for FY27 is 277 GW and for FY32 is 366 GW. "Coal-based capacity addition will depend on the demand growth, which has been quite robust for the last couple of years. However, our demand growth for FY24 is 5%," said Sabyasachi Majumdar, senior vice president at rating agency ICRA Ltd. Renewable energy cannot meet round-the-clock power supply requirements until storage becomes viable for it to be a complete alternative to coal, he added.

The estimated installed capacity by the end of FY27 is 610 GW, including 273 GW of conventional power while that for FY32 is 900 GW, comprising 304 GW of conventional energy. The current installed capacity of thermal power plants is 237 GW, while that of renewable energy, including large hydro, is 179 GW.

The latest power plan projects the total fund needed for building power stations in FY22-FY27 at Rs 14,54,188 crore. Total fund requirement for FY27-FY32 is projected to be Rs 19,06,406 crore. The government has estimated that developers will need to inject equity worth Rs 3,63,547 crore and arrange debt worth Rs 10,90,641 crore based on the calculation of fund requirements for 2022–2027.