A Dynamic India needs more electricity and water to grow the economy. A Green Energy Transformation is needed to reduce coal use. Water, first for people, is needed for factories and energy production. EkaLore analyzes needs now and for the future.
A Dynamic India is simultaneously pushing the development of industry sectors, transformation of less efficient sectors like retail distribution, and improving areas like payments and telecommunications. All of these changes are premised on the availability of two critical resources: energy and water. Investments must develop fundamental infrastructures as well as points for technology research and development, new manufacturing, and living spaces.
Electricity is needed for industrial capacity, compute and telecommunications services under most transformations, and transportation as vehicles go towards EV/NEV. Investments in energy uses for electricity generation, transformations of energy sources to renewables, electric grid networks, transportation energy infrastructure, and energy management are fundamental to driving other transformations. Indian consumers are using monies to demand electricity for nighttime air conditioning, and appliances, to improve lifestyles.
In a paradox compared with EU/North American energy usage patterns, Indian electricity demands can peak during nighttime hours. Consumer use of air conditioning and appliances creates demand and distribution patterns very different from other jurisdictions. Coal, nuclear, and natural gas electricity generation may peak at 83% of demand in some states during nighttime. The top solar electricity producing state of Rajasthan may see early problems as coal power generating plants may need to be updated and extended to provide nighttime power after solar generation is reduced.
Difficult investments in electrical grid infrastructure are required when restabilizing grids for shifts in generation capacity from coal plants to less steady solar and wind power generation. Grid investments, such as batteries at utility scale, are needed to assure consistent voltage and frequency across the entire power network. Shifts to EV/NEV and charging utility scale batteries from renewables during daylight will also continue to strain power grids and generating capacity. Wind and solar-generated electricity will not be enough alone to address the demand-driven needs of India.
Electrical demand has grown 4% in the 5 years from 2018-2022. Federal government estimates see this growing 2023-2027 by 7% annually. The Central Electrical Authority has preliminary numbers showing growth from 1320B units in 2021/2022, 1591.11 units in 2023, to 1874B units in March 2027. The current generation capacity of 404.1GW would increase 165.3GW with 92.6GW of solar, 25GW of wind, 7GW of nuclear, and 25.8GW of coal (already under construction), and improvements. In 2023 coal generated 73.1% of electricity, renewable power was 21.7%, with some nuclear and LNG. Policy choices for long-term electricity generation will need to choose beyond coal generator retention and expansion.
Coal is forecast as 50% of energy capacity and 75% of electrical generation capacity and will increase 3.8% at the same time 4.62GW of 11 existing coal plants would be retired by March 2027. Coal-generated electricity rose 12.4% surge in electricity generation in 2023 even as a decline of 28.7% of natural gas power generation occurred. Overall growth from fossil fuel plants was 11.2% to 2023 with the 2023-2024 year forecast to increase coal consumption by 8% (821MT). Expansion of renewable energy is currently not meeting objectives for 13% growth per year. Coal plants, before retirements, only gained 9% additional capacity in 2018-2023.
Water is a limiting factor for industries as diverse as semiconductors, pharmaceuticals, and energy production. A requirement for up to 4M liters of water per hour in a modern semiconductor fabrication facility (up to 95% recycled) is a site location constraint. Vehicle production facilities are also limited by water availability (as happened at Tesla’s German Gigafactory). Water is also critical for electrical generation in some states. Hydropower dropped 18% in April 2023 (year-on-year) as drought conditions limited water resources.
A Dynamic India must make the policy and governance changes needed to attract the investment and engineering knowledge for nation-wide transformations. Electricity generation and water production will otherwise limit economic growth, living standards, and industrial potentials.
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