India’s reliance on thermal power to come down to 50 percent by 2022. Report
According to a recent report, India’s dependence on thermal power will come down to 50 percent by 2021-22 and 43 percent by 2026-27.
Currently, power generation from thermal sources in India contributes around 63 percent of the total power generation capacity. These include diesel, gas, and coal-based power generation.
Praxis Global Alliance and Zetwerk recent report stated that the increased use of renewable energy (RE) will play a big role in reducing the country’s dependence on coal.
The report pointed out that India’s chase for ambitious RE targets along with augmentation of its T&D (transmission and distribution) infrastructure, will reduce its dependence on thermal power to 50 percent by FY22 and to 43 percent by FY27.
The report was based on the study conducted by the leading management consulting and advisory firm Praxis Global Alliance and Zetwerk, an Indian B2B manufacturing and service market, to highlight the impact of COVID-19 on the overall power sector including key sectors-generation, transmission, and distribution.
According to the report, the installed power generation capacity has grown at a CAGR of 8.6 percent in FY12-FY19 and renewable energy is growing at the fastest pace.
The renewable energy sector is expected to attract new private investment in the generation sector primarily; PPAs are likely to continue for a long time in the renewable sector, it added.
While on the other hand, the report showed that due to past bad experiences, long-term PPA (power purchase agreement) in thermal power is unlikely to be a pick-up in the future.
Aryaman Tandon, director of Praxis Global Alliance, stated that the government could play a key role in ensuring Discom’s good financial health, ensuring cash flow along the supply chain, and pursuing the goal of capacity addition for renewable energy generation.
While Zetwerk CEO and Co-Founder Amrit added that India’s power industry has a great potential to grow after COVID, with demand and power prices now starting to recover.
