60,000 MW of coal plants can be shut down, says Tata Power

M. Ramesh | | Updated on: Sep 03, 2020
Praveer Sinha, CEO and Managing Director, Tata Power

Praveer Sinha, CEO and Managing Director, Tata Power | Photo Credit: PAUL NORONHA

At least 60,000 MW of old coal-based power plants can be closed down quickly, according to an internal study of Tata Power.

This was disclosed by the company’s CEO and Managing Director, Praveer Sinha, at a webinar on phasing out of coal-based plants. He said that an internal study of the company had revealed that there were about 280 coal-fired plants, of a total capacity of 35,000 MW, which were over 25 years old, some even as old as 50 years. In addition, there were 200 more, of about 25,000 MW, the debt raised for which had already been fully paid back. That makes a total of 60,000 MW that can quickly “go out of the system”, Sinha said.

Doing this would ease the ‘fixed cost burden’ on the electricity distribution companies (discoms) — they have to pay the fixed costs whether or not they buy power from these units.

The 60 GW of space thus vacated could be occupied by either new and stranded power plants and renewable energy.

Sinha said that Tata Power had suggested this to the government around 2017-18. He observed that there is always stiff resistance from generators to shuttering plants. As an example, he said that for getting the 40-year Badarpur power plant in Uttar Pradesh closed, “we had to take the help of the Supreme Court”.

Sinha also observed that there were 5,000 MW of thermal power plants within 100 km of New Delhi, many of them over 25 years old, which could be closed down, so that the air pollution over the capital could be improved.

On its part, Tata Power too had decided that it would close down its own thermal plants as and when they complete their useful lives. Answering a question, Sinha said that he couldn’t immediately say how much capacity of the company’s coal plants could be closed in 15 years, but said they would be a “large number of power plants.”

Ashish Fernandes, lead analyst at Climate Risk Horizons, a consultancy, presented a study of the consultancy said that closing coal plants older than 20 years would save ₹25,000 crore — money that would not be spent on retrofitting the plants within equipment for meeting mandated pollution control norms. Another ₹92,000 crore of expenditure could be avoided by not going ahead with coal plants that are in the early stages of construction.

“Now is the time to retire old coal-fired power plants,” Fernandes said.

Answering a question on how come new coal-fired power plants were still being financed, Fernandes pointed out that the private sector is not building any coal-based power plant at all; only the public sector power companies were doing so. These PSU thermal plants are financed by public sector banks and the reasoning behind their willingness to do so is not always clear. “The costs are ultimately borne by the society,” he said.

Published on September 03, 2020

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