India can’t do withoutthermal power, for now

Coal generates over 75 per cent of India's electricity and is among the cheapest energy sources available. India also generates electricity using natural gas, hydropower and nuclear power – feasible options for generating electricity at a large scale. They are all cleaner than coal from a carbon-emissions perspective. Can they replace coal? Data indicate they could.

Natural gas is clean, but costliest. It is especially important as raw material for fertiliser production, electricity generation, as industrial fuel and energy for vehicles and kitchens-as compressed natural gas (CNG) or piped natural gas (PNG). Compared to coal, natural gas releases half as much carbon dioxide for the same amount of energy. But it is hard to get and expensive.

The country's total natural gas demand is 405 million cubic metres per day, approximately 110 million tonnes per annum of liquefied natural gas (LNG). But the domestic gas production is barely one-fifth of the demand, and fertiliser plants and city gas distribution are accorded higher priority.

Natural gas can be imported in liquid form, or LNG. However, LNG prices are pegged to petroleum prices and are 175 per cent higher than current coal prices. Taking 2013 prices as a benchmark, the cost of LNG was Rs 4 higher than coal for the same amount of energy – it means, electricity at Rs 9.8 per unit, not including the cost of power-plant machinery, operational costs.

But the entire cost of coal-based power for the year was Rs 3.3 per unit. This is why India's imports of LNG are 44.6 million cubic metres per day, only enough to run India's gas-based power plants for just over 6 hours every day. India has 23,000 MW of gas-based power plants. That is almost 10% of the nation's power generation capacity.

These plants operate at a fraction of their capacity because fuel is hard to get. Some power projects, such as the infamous Dabhol Power Project, have been idle for the past year. Unlike fossil-fuel-based power plants, hydroelectricity doesn't cause any carbon emissions. Hydropower accounts for 18% of India's installed generation capacity, and for 12.3 percent of the electricity generated in India during the financial year 2014-15.

India's hydropower potential is pegged at 145,320 MW-of which 40,885 MW, or less than 30 per cent, is currently operational. The flow of water in a hydropower project is uneven during the year – high during monsoons and gradually tapering off-so for the same capacity, a hydropower plant generates 33 per cent less electricity than a coal-fuelled power plant.

The capital cost of a hydropower project can be as high as Rs 10 crore per megawatt, against Rs 4.5-6 crore per megawatt for a thermal power project. The bottomline is the cost of electricity from hydropower plants is Rs 3.38/unit, 2 per cent higher than coal-based power.

No more than 3.5 per cent of India's electricity comes from nuclear power, hobbled by sanctions and fuel shortages. This is now changing, and India plans to triple its nuclear power generation by 2024. Apart from zero carbon-dioxide emission, nuclear energy has other advantages over coal. During financial year 2013-14, Nuclear Power Corporation of India (NPCIL) sold electricity at Rs 2.71/unit, versus Rs 3.3/unit for NTPC and Rs 3.38/unit for NHPC.

But it is clean and also potentially dangerous. However, after the 2011 Fukushima-Daiichi earthquake and the subsequent nuclear disaster, many countries are rethinking nuclear energy. India plans to have several nuclear power plants built by foreign firms. The cost of foreign options (being built in India and elsewhere) ranges from Rs 20 crore/MW to Rs 40 crore/MW.

It is, thus, unlikely that nuclear power from foreign-built reactors will be as cheap as it has so far been. The bottomline here is: The cost of electricity from domestically-built nuclear-powered plants is Rs 2.71/unit, 18 per cent lower than coal-based power. Is a coal-driven future, therefore, inevitable?

It appears to be a no-brainer when it comes to convenience and immediate economic costs. But immediate economic costs are not the only ones India faces. There are longer-term economic and environmental costs to consider, and this is why what are called non-conventional energy sources have a role to play. The extent of that role will determine the future of India's economy, the warming of the planet and the collective well-being of all Indians.

By:Amit Bhandari