India seeks to cut reliance on coal power generation

  • Market: Coal
  • 07/10/20

India aims to sharply lower its dependence on coal in its electricity generation mix, as part of a broader plan to raise power output from cleaner sources and cut emissions.

Non-fossil fuel sources will account for as much as 60pc of our generation capacity by 2030, power minister Raj Kumar Singh said yesterday. Non-thermal sources, such as nuclear, hydropower and renewables, currently make up 38.5pc of installed capacity, he said.

Delhi made an international commitment five years ago that as much as 40pc of its overall generation capacity would be based on cleaner energy sources by 2030, a goal which the country is set to achieve as early as this year. This would give policymakers more bandwidth to keep a lid on the growth of the coal-fired fleet in the country.

The growth in India's renewable energy capacity is expected to outpace the expansion of its coal-power stations in the coming decade, in line with plans to cut its dependence on the thermal fuel. The government intends to add capacity from renewable energy sources, especially solar. Even state-controlled utility NTPC has laid out ambitious plans for growth of its green energy portfolio.

The country aims to raise its renewable energy capacity to 450GW by 2030, the minister said. This is higher than the 435GW estimated earlier this year by the Central Electricity Authority (CEA), which is part of India's power ministry. India is already working in the shorter term to expand its total renewable energy capacity to 175GW by 2022. It currently stands at around 89GW, accounting for 24pc of installed capacity. This compares with 205.95GW of coal-based capacity, which is around 55pc of the country's current generation capability.

The push for renewables also includes setting up local manufacturing lines for solar panels, modules and other equipment. The government will support the local manufacturing industry by providing incentives, Singh said. Companies setting up hubs for local manufacturing of advanced technology would be given additional benefits. At the same time, imports of renewable energy equipment would be discouraged through tax and other administrative measures.

The growth in renewable energy will be supported by a steady rise in the country's power demand, the minister said. This would also support the growth of the domestic manufacturing industry.

Retiring coal-based plants will be replaced by renewable energy capacity. The CEA has identified 34 coal-based power stations with a combined capacity of 5.14GW that can be retired, according to its latest assessment. The minister said about 29 plants would be retired.

A total of 164 coal-based units with a combined capacity of 14.12GW have been made redundant in the last 18 years, Singh told parliament last month.

Electricity generation

The plans come as coal continues to be a vital part of India's electricity mix, accounting for about 75pc of actual generation. The country's total generation, including coal-fired output, rose from a year ago after declining for six straight months.

India's coal-fired generation rose by 6.82TWh from a year earlier to 78.91TWh in September, according to provisional data from the CEA.

The rise was supported by a gradual recovery in industrial activity that had been hamstrung by the country's Covid-19 lockdown, which was partially lifted in June. The last month's year-on-year increase in generation was also partly attributed to the low base of comparison with September 2019, when heavy rainfall lifted hydropower generation.


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