India to replace 30GW of thermal power with renewables

India aims to replace 30GW of thermal power generation capacity with renewable energy by 2026, in a move aimed at reducing emissions from coal-fired power plants.

Delhi has directed 81 thermal power plants to reduce coal-fired generation and offset the decline with solar power. The exercise is expected to cut coal usage for power generation by 34.7mn t/yr and reduce carbon emissions by over 60mn t/yr, according to India's power ministry.

The decision is part of the country's broader plans to achieve 500GW of renewable power capacity by 2030, although India is lagging in terms of meeting renewable energy targets. India's renewable energy capacity is currently at 111.4GW, far from its target of 175GW by this year and well below the target of 500GW by 2030.

India's power tariff policy allows the bundling of renewable electricity with thermal power. The identified 81 power plants can operate at a minimum feasible capacity to accommodate renewable energy, the power ministry said. It has identified thermal plants with high tariffs for this exercise, to potentially reduce electricity rates for end users through increased use of renewables.

While plant-wise targets to add renewable capacity have been stated, utilities can adopt and replace additional thermal generation with renewables, the ministry added.

The list of 81 plants is indicative and those outside the list are also eligible to reduce coal-fired power with renewables. Hydropower units can also bebundled asrenewable power under this exercise.

Heavy coal reliance

Coal-fired power generation accounts for over 70pc of India's total output, and Delhi is heavily reliant on state-owned producer Coal India (CIL) to meet more than 80pc of the country's coal needs. This is a key hurdle to its ambition to provide affordable power to all because of a lack of competition and growth in coal production.

The decision to partly replace coal-fired generation with renewables comes as Delhi has pushed utilities to import coal to offset domestic coal shortages. India has asked CIL to aggregate and import coal for the blending requirements of all domestic power utilities during the 2022-23 fiscal year that will end on 31 March next year. The move is aimed at securing imported coal at competitive prices and avoiding confusion caused by multiple tenders.

The power ministry previously mandated utilities to co-fire at least 5pc biomass pellets by October, in a move aimed at reducing coal consumption and curbing pollution. Co-firing should be increased to 7pc from October 2023 for two categories of power plants, namely those with a bowl mill or with a ball and race mill.

Plants with ball and tube mills, another category, will start co-firing 5pc biomass later this year but are not required to increase to 7pc subsequently. These three categories practically cover most of the country's thermal power plants.

By Ajay Modi