Solar Energy - Limitations

As per the Paris Agreement, India committed to increase the amount of electric power from clean energy resources to 40% by 2030. A total of 175 GW of renewable energy installed capacity was promised to be achieved by 2022, of which 100 GW is the target set for solar power alone.

• A performance analysis study by a pioneer in the power generation industry, calculated that for every megawatt of solar power capacity installed, an average output of a mere 19% is extracted.
• In a recently set up ‘the world’s largest solar power plant’ in Tamil Nadu and Gujarat is with a total capacity of 40 MW, the electricity generation of this plant is about 63.8 million units, merely at 18.2% of its total capacity. 
• For obvious reasons – night, monsoons, dust, storms – solar power is neither produced all day nor throughout the year. Thus, solar power plant's capacity utilisation factor (CUF)  will never exceed 20% of its capacity.
• The lofty cost of rooftop solar panels overrides the tangible benefit in the eyes of customers,  despite 30% subsidy. Due to the instability in solar power production, the dependence of households with rooftop solar on coal based electricity/diesel generators will persist.
• A far bigger problem is that solar power is given preference when supply exceeds demand, so thermal plants have to back down. The plant load factor (PLF) or capacity utilisation of coal-based plants was 76% six years ago, but it is now just 58%. Above 70% PLF Thermal Power Companies are profitable, at 58% they are in trouble and at 48% they would go bust.
• Solar power looks great when the sun shines, but stops at sunset, just as power demand soars to its evening peak. Much thermal power has to remain idle during the day, ready to pick up the slack when solar production suddenly stops. This forced idleness carries huge costs hidden by ostensibly cheap solar power quotations.
• Solar power appears cheaper with provision of cheap land, tax subsidies, incentives, accelerated depreciation, viability gap funding and capital equipment subsidy. Once these are all removed the picture will be different.
• The true cost of solar power (sans implicit and explicit subsidies) at Rs 6/unit without storage and Rs 8/unit with storage. A captive coal-based power station working flat out yields power at just Rs 2.50/unit, far cheaper than solar power. 
• Solar costs are falling fast. The slower we go, the more solar costs will fall. So speed is not a virtue. Raising solar targets repeatedly looks green and good, but has hidden, potentially disastrous costs.
• Both thermal and solar capacity creation must slow down. Breakneck speed for solar power will break the neck of thermal plants and banks.
• The deceiving picture of the output from a major component of renewable energy and the promise of government for 24×7 electricity for all, the idea that India’s dependence on coal based power will decrease in the near future seems naïve. 
• The government has not reduced its coal output targets and plans to raise coal output from the current 550 million tonnes to nearly a billion tonnes by 2022.
• The much advertised ten-fold increase in solar power may seem like a game-changer for the renewable energy sector. But on close examination it becomes clear that the power yield from this increased capacity on an average will be as little as 20% of the total capacity, and this will make little difference to India’s emissions.

Read 'Looming Coal Shortage'

Guaranteeing 24x7 power supply is a gigantic task. In the absence of economic batteries, solar energy suffers from its limitations. However it is very cost effective for remote villages, agriculture pump sets not serviced by regular sources of electric power. In cities and towns it could be used for water heating and for reducing electricity bills. Much of power demand for commercial, domestic and street lighting occurs during evening and night hours and has to be met from non-solar resources only. With all its limitations, still solar power could be used to reduce power demand during day time hours. The higher the solar power generation the higher would be stand by sources of power thus efficiency of power sector gets reduced translating into higher tariffs apart from creating power system operational issues. Therefore, solar power can never replace conventional resources of power fully and at best it could meet 20-25% power demand. 

Looming coal shortage

Coal meets almost half the energy needs of the entire world. It plays a vital role in steel production and the manufacturing of cement. Coal takes thousands of years to form naturally and are not replaceable at the pace they are consumed. Global coal output is likely to reach a plateau by 2025 and thereafter, it is likely to be on a permanent decline, marking the ‘beginning of end’ of the resource. Depletion of conventional energy resources has made conservation of energy and the identification of new and/or renewable energy sources vital.

THE GLOBAL SCENARIO OF COAL

• Increase in price due to growing gap between demand and supply of coal.
• Dependency on other fuels for the generation of electricity. 
• Many established thermal power generation capacities would face the threat of sitting idle and being underutilized in absence of coal.
• All sectors will have to grapple with increasing power cuts or blackouts, leading to shut downs that would impact their production and margins. 
• A coal shortage can have a ripple effect across industries, which will ultimately reflect in the growth rate of economies.
• In India, thermal power accounts for about 65% of the total electricity generated. India is third-largest producer of coal globally, and yet, is also the fourth-largest importer of coal. India imports 30% of its coal needs of which half by power companies.
• Thermal power plants accounts for 88% of water consumed by all industry sectors put together. They also add to the environmental and social burdens. 
• Coal India Limited, the largest coal producer in the world, has not supplied coal as per commitments to power stations and the gap is widening. Much of the coal produced in the country is of a relatively inferior grade. 
• New laws by exporting countries such as Indonesia and Australia increases the cost of the imported coal for India. As power producers are unable to entirely pass on the costs to the consumers, they face increased pressures on their margins.
• In the light of all this, it is prudent to not rely on any nonrenewable resources including coal. Instead, industries and countries should concentrate on increasing productivity and efficiency of the existing technologies. This will also bring down energy costs with minimal interference in processes. 

LOOMING COAL SHORTAGE

• A surge in electricity demand growth and poor coal production by Coal India threaten to accentuate the fuel crisis. At a time when coal prices are on fire in the overseas market and imported fuel-based gencos are idling, Coal India’s production has set alarm bells jangling. The coal production situation might snowball into a crisis.
• An unexpected rise in demand for thermal power triggered a fuel crisis in July 2017. It was initially attributed to a fall in hydel supplies and stronger growth in demand on the back of the rural electrification push.
• The demand surge caught CIL off-guard. The company was in the process of cutting down production due to sluggish demand for almost two years. Excessive production over the previous two years, when demand was flat, had led to a multi-year-high pit-head stock of 68mt. CIL deployed its pit-head stock to cater to the demand, using the improved railway logistics.
• By end of Dec 2017, supplies started easing out, though stocks at power plants were lower than last year.
• Coal production grew 2.6%, 0.7% and 1.3% in Nov, Dec and Jan respectively, taking the 10-month average to 1.6%. CCL and BCCL, reported 11-13% decline in production.
• At the current monthly average of 53 mt, annual production may only touch 550mt against target of 600mt. With pitheads stocks bottoming out to 33mt, CIL cannot push off-take further without matching production growth.
• Meanwhile, electricity demand grew 5.8% in July, up from 2.6% in FY17 and 4.3% in FY16, with UP, MP, Maharashtra, Telengana and Gujarat being major buyers.
• The result is showing in low fuel stock at power plants. As on Feb 1, 2018,  the average inventory at power plants was 9 day's equivalent against desirable 21 day's.

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Read ... Why we must quit coal

Telangana state (TS) has shortage of 2,000 MW at the time of 'AP Re-organisation' in June 2014. Although some thermal generation has been added in the last 4 years, the increased demand due in Hyderabad city, new lift irrigation schemes, tap water to every household and supplying of 24 hours power to all villages and all agriculture pump sets - the demand has gone up exponentially and is slated to touch 10,000 MW in a year or two. Last two years coal position was extremely good and overall demand for power was subdued and was favorable to TS for purchase power on spot basis at low prices. This year with increase in demand, shortages of coal and imported coal becoming very expensive TS might face not only shortages but also power expenses shooting up and that would be painful and politically disastrous for ruling TRS party. In any case dependence on Thermal power needs to be reduced by making investments in solar power, reduction in consumption by increasing efficiency and eliminating wastage.