India plans to reduce power generation from 81 thermal coal-fired plants over the next four years, as part of its efforts to switch to clean energy sources and cut carbon emissions, according to a letter seen by S&P Global Commodity Insights.
The letter, dated May 26, and sent to energy departments of the state and Central government, noted that according to current regulations, thermal power plants need to operate at a minimum of 55 per cent but reduction of generation from such plants is possible to a minimum of 40 per cent.
The Union power ministry has selected those power plants that charge higher tariffs to reduce the price of power delivered to the consumer, S&P Global Commodity Insights said.
With this, there would be a reduction in power generation by 58 billion kWh from the 81 utilities, the letter said, adding it will save 34.7 million tonne of coal and cut carbon emissions by 60.2 million tonne.
Moreover, an equivalent of around 30,000 MW of renewable energy will be required for this transition. That said, it would help India inch closer to its goal of achieving 500 GW of non-fossil fuel-based power by 2030.
Analysts have, however, called this target ambitious and believe that India will have to take much bolder steps to meet its clean energy goals.
Moreover, S&P Global on Monday reported that for the first time since 2015, state-owned coal producer Coal India will procure coal on behalf of power stations operated by the Central and state governments.
India imported 17.4 million tonne thermal coal in January and February, according to S&P Global data. The country imported 161.4 million tonne in 2021, lower than 172.8 million tonne in 2020, it said.
Meanwhile, the Union Power Ministry on Sunday directed the Central Electricity Authority (CEA) to determine the eligible quantity of domestic coal for the power plants using coal under Shakti B (viii) (a) taking into account 10 per cent imported coal for blending, which is equivalent to about 15 per cent of domestic coal in energy terms.
Shakti B (viii) (a) is the window for power plants having untied capacity to bid for coal to generate power using this coal and sell it in the exchange under Day Ahead Market (DAM) or the DEEP portal for short term PPA.
For such plants, the Ministry has directed CEA to compute the quantity of coal consumed (procured under Shakti B (viii) (a) window) on the basis of mandatory blending of 10 per cent by weight for generation during the period starting from June 15, 2022 up to March 31 2023. This will give a window of about three weeks for these plants to procure imported coal.
Considering the increased demand of electricity, and coal supplies from domestic coal companies not matching with the consumption of coal, the Power Ministry advised all Gencos including IPPs on April 28 to blend 10 per cent of imported coal for power generation. This was done to supplement domestic coal supply.