NATIONAL ELECTRICITY PLAN (NEP) (Syllabus: GS Paper 3 – Economy)

Context: India anticipates a peak power demand of 260 gigawatts in September or October, marking a remarkable 20% increase in just two years. The surge may prompt an unscheduled revision of the National Electricity Plan (NEP) 2022-27, according to the power secretary.

National Electricity Plan (NEP)

• About: The NEP is a pivotal document guiding India's power sector development, formulated by the Central Electricity Authority (CEA).
• Mandated by: Electricity Act, 2003, is responsible for preparing and updating the NEP every five years.
• Objectives of the NEP:  It evaluates the current and projected electricity demand in India.

oThe NEP identifies the required capacity additions to meet the projected demand over the next five years.

oIt aims to optimize the utilization of resources, including renewable energy sources, to meet the electricity demand efficiently.

• Components of the NEP

oReview of the last five years (2017-22), 

oA detailed plan for the next five years (2022-27) and 

oThe prospective plan for the next five years (2027-32).

Key Highlights of the National Electricity Plan 2022-27

• Coal Energy Thrust: The plan outlines a need for new coal-based capacity, aiming for an addition ranging from 17 GW to nearly 28 GW by 2031-32.
• Renewable Energy Thrust: Emphasizes significant growth in renewable energy, with projections indicating a battery storage requirement of 51 GW to 84 GW by 2031-32, with a daily usage rate of 5 hours.
• Battery Energy Storage Systems: BESS, particularly those based on Lithium-ion technology, are increasingly cost-effective, positioning them as a preferred choice for grid balancing against load fluctuations and generation intermittency.
• Hybrid Generation Models: Integration of off-stream pumped storage projects with hybrid generation models enables effective solar energy shifting, storing excess solar generation in water-based energy storage or pump storage plants (PSP) for backup power.