Coal India to diversify into solar power

India's state-controlled producer Coal India (CIL) plans to tap into solar energy to power its mining operations as part of its broader efforts to achieve carbon neutrality.

The company aims to set up 14 rooftop and ground-mounted solar power projects with a combined capacity of 3GW by the 2023-24 financial year that ends in March 2024. The foray into solar power will cost CIL an estimated 56.5bn rupees ($765.5mn).

The move comes amid directions from the federal coal ministry for the coal giant to become a net-zero emissions company, a term used to describe firms that employ eco-friendly practices to offset emissions and reduce their carbon footprint.The efforts also underscore a greater push by India to expand its renewable energy generation capacity and reduce its reliance on coal.

CIL thinks the initiative will also reduce its annual power consumption expenses, which stood at Rs34bn in 2019-20. The company meets more than 80pc of India's coal needs.

CIL has formed two joint ventures to meet part of its solar power target. It has tied up with state-controlled lignite producer and utility NLC India to build solar power plants totalling 1GW of capacity. It has also formed a joint venture with state-controlled utility NTPC and signed an initial pact with federal solar power agency the Solar Energy Corporation of India.

Renewable energy push

CIL's move would also lend some support to India's overall renewable energy push. The country aims to raise its renewable energy capacity to 175GW by 2022 and to 450GW by 2030. Solar power accounts for the bulk of the capacity addition target.

The country's current renewable energy capacity stands at 89.6GW, accounting for 24pc of installed capacity. This compares with 205.85GW of coal-based capacity, which makes up around 55pc of the country's current generation capability.

The decision also comes at a time when solar power tariffs are declining sharply following a fall in solar equipment prices.

The government is also looking at options to provide around-the-clock electricity by mixing electricity generated from varied cleaner energy sources and using power storage technologies.

These efforts are aimed at lowering India's dependence on coal in its electricity generation mix and cutting emissions.

Non-fossil fuel sources will account for as much as 60pc of our generation capacity by 2030, power minister Raj Kumar Singh said on 6 October. Non-thermal sources, such as nuclear, hydropower and renewables, currently make up about 38pc of overall installed generation capacity.

Delhi made an international commitment in 2015 that as much as 40pc of its overall generation capacity would be based on cleaner energy sources by 2030, a goal which the country may even achieve in coming months.

By Saurabh Chaturvedi