The power ministry has announced that electricity generation from at least 81 coal-fired utilities will be reduced over the next four years. This is in line with the country’s commitment to cut carbon emission by 1 billion tonne and bring down carbon intensity of the economy by 45% by 2030.
“The thermal power plants in future shall operate up to the technical minimum to accommodate cheaper renewable energy when it is available,” the ministry said in a letter to senior officials in central and state power departments dated May 26.
The plan aims to maximise green energy potential and save costs, the ministry said but said it will not involve shutting down old and expensive power plants. India has 173 coal-fired plants.
The move follows state-run NTPC’s decision to put plans to expand coal-fired capacities on the front-burner, and step up coal imports in the short term, given the widening demand-supply mismatch in the sector. An NTPC official told reporters recently the company would soon award a contract for a 2 X 660-megawatt coal-fired unit at its Talcher station in Odisha. He also said NPTC might revisit an earlier decision to slow the capacity expansion at Chhattisgarh’s Lara and Uttar Pradesh’s Singrauli super power stations.
Prime Minister Narendra Modi had announced at the COP26 climate meeting in Glasgow last November that by 2030, India will increase its non-fossil fuel power generation capacity to 500 GW and generate 50% of its power from renewable sources.
Fitch Solutions had said in a note that “India must substantially alter its current trajectory, if it is to deliver on its commitments. Based on the current state of play, the country will fall far short of its climate objectives”.
“As of 2020, coal, oil and natural gas accounted for 55%, 28% and 7% of the primary energy mix, respectively. By 2030, we estimate they will account for a respective 45%, 33% and 8%,” the note had said.
In line with India’s multilateral commitment to reduce the carbon intensity of its economy, NTPC had earlier announced steps to make nearly half of its energy portfolio green in 10 years from a little over 4% now, by raising solar and wind capacities. While that plan is still being implemented, the coal-based capacities will continue to be beefed up.
Despite spiralling prices of the fuel in global markets, the Centre recently asked thermal power plants to import more of it to have a fuel mix with 10% imported coal. However, compliance with this directive has been uneven across states and power producers.
Meanwhile, the ministry has also asked state-run miner Coal India to import the fuel for use by utilities, as fuel shortages increased chances of more power outages. “Coal India would import coal for blending on government-to-government (G2G) basis and supply … to thermal power plants of state generators and independent power producers,” the ministry said.
Recently, the power ministry also asked states to suspend tenders that are “under process”. “The tenders under process by state generators and IPPs for importing coal for blending may be kept in abeyance to await the price discovery by Coal India through G2G route, so as to procure coal at least possible rates,” it said.
Coal inventories at power plants have declined by about 13% since April to the lowest pre-summer levels in years.
(With inputs from Reuters)
