Shortage of water is now supporting growth of renewables in India, according to a HSBC report titled ‘India Renewables – Good bye winter, hello spring’.

As per the report, the country’s coal supply constraint has been one of the key drivers of renewables.

Despite having the fifth largest global reserves of coal, India’s coal imports continue to rise rapidly. Considering that imported coal costs significantly more than domestic coal, the performance of generators reliant on imported coal is adversely affected.

“Coal stress has been a key driver of renewables in India. We now see water stress as also supporting renewables growth. For the third consecutive year in a row, some coal-based capacity has been closed down during the pre-monsoon period driven by water shortages. We note that thermal power generation is the largest water consumer within the industry segment in India,” says the report published in April this year.

The HSBC report points out that India, with per capita water availability of less than 1,700 cu m, has become a water-stressed nation.

The country’s water demand is expected to rise 50 percent by 2031 from current levels. It is estimated that up to 20 percent of the increase in demand can be met through augmenting supply, primarily through storage and ground water retention. The remaining gap needs to be bridged through water use efficiency.

The report cites estimates by the Centre for Science and Environment that 88 percent of the country’s industrial water demand is taken up by thermal power plants. It goes on to highlight the shutting down of the Parli thermal power plant in Maharashtra owing to water supply constraints. The plant, with an installed capacity of 1,130 MW, had to be partially shut down in October 2012, and then completely shut down in February this year. Over the next five years, 17 GW of new coal-based generation capacity is proposed to be added in the state.

“With observed capacity closures in the state over the past few years, we see water stress rising and increasing risk for new and existing water-intensive facilities in the state,” says the report, adding that the states of Kerala, Karnataka, Tamil Nadu, Gujarat, Delhi and Uttar Pradesh also face water shortage.

Some of the other key factors, besides policy framework for renewable energy, driving the growth of renewables in India include poor gas reserves and supply constraints, hurdles in execution of hydro power projects due to limited resources and rehabilitation issues, public concern over safety of nuclear power plants and declining cost of wind and solar energy.


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