What are the key reasons for backing down of Thermal Power Plants and its impacts ?

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Some of the Key Reasons and its impacts on Backing Down the Thermal Power Plants in any country is as following: 

  1. Cost Efficiency

    • Solar tariff (₹2.80/kWh) vs thermal (₹3.22–₹4.62/kWh).
    • Average savings: ₹1.04/kWh during solar hours.

  2. Regulatory Compliance

    • Fulfillment of Renewable Purchase Obligation (RPO) targets.
    • Supports state and central decarbonization goals.

  3. Merit Order Dispatch

    • Prioritizing lowest-cost generation sources.
    • Solar is “must-run,” displacing thermal during peak solar generation.

  4. Environmental Sustainability

    • Reduction in carbon emissions.
    • Positive ESG impact for utilities and state.

Impacts of Backing Down TPPs

Positive

  • Financial Savings: Lower procurement cost for DISCOMs will create impact on the DISCOMs financials and reduce the tariffs
  • Carbon Reduction: Supports climate commitments and also to meet the COP targets that are agreed by individual countries.
  • Regulatory Alignment: Meets RPO and renewable integration targets as per the state and central targets.

Challenges

  • Operational Stress: Frequent ramping increases wear-tear and O&M costs.
  • Fixed Cost Burden: Thermal plants still incur fixed costs even when idle.
  • Grid Stability Risks: Requires advanced forecasting and balancing. Maybe incorporating the automation and AI models into the system.

Impact-Risk Matrix

ImpactsRisk
High Impact, Low RiskCost savings from solar substitution
High Impact, High RiskGrid stability during high solar penetration
Low Impact, Low RiskRegulatory compliance (RPO targets)
Low Impact, High RiskThermal plant economics due to fixed cost recovery


Location: India

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