Energy security in drought-hit Maharashtra

Maharashtra is currently reeling under a severe drought caused by two consecutive weak monsoons in 2014 and 2015. Out of a total of 43,000 villages, more than half (27,723) have been declared drought-hit. The water level in Marathwada dams has fallen to two per cent, with two dams running completely dry.

Maharashtra is the largest power generating state in India, with an installed electricity generation capacity of 39,021 MW. The state has 14 per cent of the total installed electricity generation capacity in the country, and accounts for 16 per cent of total electricity demand, making it the largest generator as well as consumer of electricity in the country.

The energy strategy of the state needs to be formulated keeping in mind the present water supply situation as well as the potential for future water shortages.

The present coal-thermal dominated generation mix is unsustainable, both environmentally and economically. Not only does a coal power plant release greenhouse gases, but the generation of power is also water-intensive. Coal power plants require large quantities of water at various stages of the energy generation cycle, with the average water requirement being 23,000,000 litres per megawatt per year. In comparison, the average water requirement for a solar photovoltaic (PV) power plant is 13,500 litres per megawatt per year.

Most coal-fired power plants in the state are located in the drought-prone regions of Marathwada, Vidarbha and northern Maharashtra. A continued reliance on coal-thermal power would therefore be catastrophic for the region’s water supply, environment and economy.

What is the solution?

India’s coal reserves are projected to be depleted in 40 years at the current rate of usage. With the increase in demand for coal, mainly generated by emerging economies, global coal prices are projected to rise.

Natural gas cannot be a long-term option as there is not enough natural gas available in India. About 70 per cent of the gas-based power generation capacity in the country remains stranded or under-utilised due to a shortfall of domestic natural gas. Hydraulic fracturing, or ‘fracking’, has not become commercially viable in the country yet. It is also an extremely water-intensive process.

Integrated Electrical Energy Policy for Maharashtra

The government of Maharashtra has set an ambitious target of installing 14.4 GW of renewable energy capacity by 2020. This will include 7.5 GW of solar power, 5 GW of wind power, 1 GW of bagasse-based cogeneration projects, 400 MW of small hydropower, 300 MW of power from biomass and 200 MW of power from industrial waste.

But increasing renewable energy capacity in the state is not the only answer.Transition from fossil fuels to renewable energy is also an important factor in the process.Coal-thermal electricity generation needs to be brought down to minimise the negative effects of coal power and to facilitate the transition to a renewable energy-based energy industry.

The life of a 20-25 years old power plant can be extended by 15-20 years after renovation and modernisation. This means that a plant can operate for a maximum of 40-45 years.

Maharashtra has seven units at four coal-fired power stations that are 35 or more years old and are consequently reaching the end of their operating cycles. The collective capacity of these units is 1.46 GW, amounting to 8.5 per cent of the total coal based electricity generation in the state. All the plants are owned by the state-run Maharashtra State Power Generation Co Ltd (MSPGCL).

The combined electricity generation by all the units amounts to 8,761 million units (Capacity Utilisation Factor, or CUF of 68.5%). To generate the same amount of electricity, solar plants of a collective capacity of 5 GW will have to be installed (CUF 20%). The state’s solar energy target is 7.5 GW. To meet this target, 1.5 GW of solar capacity will have to be commissioned every year until 2020. By the same calculation, it will take 3.3 years to install 5 GW of solar capacity. If installation begins within six months, 5 GW could be commissioned by the end of 2019. To ensure that the supply of electricity is not hampered during the evening and night, electricity could be procured from power exchanges during these periods.All these power plants are located in Marathwada, Vidarbha and northern Maharashtra, regions where the level of global horizontal solar irradiance (GHI) is high, making them ideal locations for solar PV power plants.

Even with the increase in installed capacity brought about by switching over from 1.46 GW of coal-thermal power to 5 GW of solar power, more than 33 billion litresof water would be saved annually. This does not include any water that is recycled at the solar power plants.

The solar power projects should be constructed at suitable sites as near the thermal power stations as possible, so that redundant workers from the units can find gainful employment close to their former work place, after being given the requisite training. The rehabilitation of unemployed workers from the coal energy sector can thus be smoothly effected. According to Bridge to India, a solar energy technology firm, utility-scale solar power plants create 9 operation and maintenance (O&M) jobs per MW. Setting up 5 GW of solar panels would therefore create 45,000 jobs. The solar energy sector could consequently be a major source of employment for the region.

As per the new pollution control norms by the Ministry of Environment, Forest and Climate Change, the coal thermal power plants will have to reduce particulate matter emissions by up to 40 per cent and limit their water consumption by up to 2,500 litres per MWh by December 2017.

Currently Maharashtra has only 379 MW of installed solar. In order to achieve the goal of 5 GW of solar power by 2019, installation will have to increase at a considerably faster rate.

An integrated electrical energy policy for Maharashtra needs to be formulated, that deals with both conventional and renewable power generation as well as energy efficiency.

Some features that the policy should have:

1. Comprehensiveness: The policy should be formulated on a medium to long term time scale, say 15 to 20 years, and should set goals and targets with realistic deadlines. The commissioning and decommissioning of conventional as well as non-conventional power generating stations would be based on the prevailing power demand. The policy should also allow for the preparation of an Integrated Electrical Energy Plan—a roadmap to set specific targets and state the actions needed to achieve them. An annual “Maharashtra Energy Report” should also be brought out to evaluate the progress made on the plan so far and give an overview of the power sector in the state.
   
   
2. Transition from coal to renewables: Fossil fuel power generation technology is an example of technological lock in—difficult to displace as many have a vested interest in their continuation. Suitable measures will have to be taken to make the transition more palatable and consequently easier to effect, such as ensuring that redundant labour from the conventional power sector is absorbed by other industries, and that investors are given adequate compensation for any cancelled investments.
   
   
3. Overhaul of state power utilities:  To improve the financial position of state power distribution utilities, the central government launched the Ujwal DISCOM Assurance Yojana, or UDAY, in November 2015. Under this scheme, state governments will take over 75 per cent of DISCOM debt and also take over and fund at least 50 per cent of the future losses. The cost of power will be reduced by enabling liberal coal swaps from inefficient to efficient plants, and faster installation of transmission lines.
   
   The rise in distributed generation of solar power and the growth of smart grids will change the role of MSEDCL and the Maharashtra State Electricity Transmission Company (MSETCL). The utilities will have also have to supervise energy demand and supplyand energy use data, price of electricity and other factors. The policy would also take into account the changes in the business models of MSEDCL and MSETCL.
   
   
4. Enabling greater penetration of renewables: The policy should mention the actions to be taken to overcome the technical challenges in renewable energy. These would encompass, among other things:
   
        a) Improved forecasting of solar radiation and wind speeds: Advanced forecasting stations to minimise the impact ofvoltage fluctuations in the grid caused due to changes in resources(sun and wind).
   
        b) Research and development (R&D): Provisions should be made for an R&D wing to study and demonstrate the potential for improving renewable energy storage capabilities and general workability of the smart grid. This can be done in collaboration with the private sector, industry and international institutions.
   
       c) Encouraging distributed generation:In September 2015, the government notified that customersto enter into a net metering arrangement with them as long as the percentage of electricity generated by the rooftop systems remains at or below 40 percent of the transformer’s capacity. The imposition of this limit deters the growth of distributed generation systems and should be removed.
   
   
5. Water conservation: The annual water requirement for solar PV plants is around a thousandth of a coal power plant of the same capacity. Water used in solar or wind energy plants can be recycled,but in the case of coal-based power plants, most of it is contaminated by fly ash and other pollutants. Solar plants should, thus, be encouraged. To reduce the usage of water in dry regions, alternatives to cleaning, such as dry brushing, should be explored.
   
   
6. Human resource development: There is no vocational training institute dedicated to skill development for the renewable electricity sector in Maharashtra. The integrated energy policy should place special emphasis on vocational training. At least one course on renewable electricity generation should be introduced in government training institutes.
   
   
7. Finance: The Draft National Renewable Energy Act passed in 2015 provides for the setting up of a national fund for the development of renewable power in the country. State governments are to set up green funds for the promotion of renewable energy generation. Contributions could also be made to the funds by levying green energy cess on every unit of electricity generated from coal- thermal plants and Corporate Social Responsibility (CSR) programmes.

In January 2016 the solar tariff in Rajasthan, which has the highest installed solar capacity in India at 1.264 GW, fell to a new low of Rs 4.34 per unit. The current cost of power from MSEPGCL-run thermal power plants is around Rs 4.25 per unit. The average wind power tariff in Maharashtra is Rs4.4 per unit. Renewable power is already almost at par with coal-thermal power.

Integrated energy planning will enable Maharashtra, the largest power consuming and generating state in India, to move to a sustainableenergy future.  The adoption of this strategy could set an example for the rest of India and be the first step towards ensuring that the entire country can achieve energy security.