India’s Power Generation At Its Cleanest-Ever As Thermal Share Falls

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India’s power generation in August 2018 was the cleanest on record as the share of thermal power generation fell to perhaps its lowest level ever.

The share of thermal power generated in India in August 2018 fell to 68.3%, making it only the third ‘sub-70%’ month since April 2015. No data for renewable energy generation is available before April 2015.

August 2018 was the second consecutive month when the share of thermal power generation in India was less than 70%. August 2018 was also the third consecutive month when the thermal power generation in India was less than 90 tera-watt hours. July 2018 recorded the lowest thermal power generation in 13 months, at 82.2 tera-watt hours. July 2018 also was the first time in 22 months that the share of thermal power generation dropped below 70%.

The decline in share of thermal power generation in India can be attributed to the sharp jump in power generation from other sources, including renewable energy and large hydro power projects. In India, hydro power projects with a capacity greater than 25 megawatts are not classified as renewable, and have a category of their own.

Favorable monsoon conditions and ample rainfall meant greater generation from large hydro power projects. The share of non-thermal non-renewable energy sources (large hydro and nuclear power) was 18.3% in August 2018, the highest in two years.

The share increase of renewable energy also contributed to the record clean power generation in India. Renewable energy penetration in national-level generation hit all-time highs in July and August 2018, at 13.4%. High speed winds enabled by favorable monsoon conditions were responsible for the record-high wind energy generation during these months.

Penetration of thermal power has declined in the Indian power mix over the last few quarters due to several reasons. During the 36 months starting July 2015 and June 2018, 31.4 gigawatts of thermal power capacity was added while 35.5 gigawatts of renewable energy capacity was added. While these number do not differ much, the generation and final procurement of power from these technologies adds another twist.

Solar and wind energy projects enjoy a ‘must-run’ status, meaning that all power generated from these projects must be procured by distribution utilities, even if they are forced to shut down thermal power plants. Also, the tariffs of new solar and wind energy projects are now lower than several existing thermal power plants. This has inspired several Indian states to focus on adding renewable energy capacity. Another incentive enjoyed by renewable energy projects is the exemption from transmission charges.

India has specific capacity addition targets for wind and solar power projects, with pre-defined auction timelines. This gives a clear outlook to the private sector developers, something which remains lacking in the thermal power sector. 

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An avid follower of latest developments in the Indian renewable energy sector.

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