Getting itself future ready, Coal India Ltd (CIL) is focusing on renewable energy — particularly solar — as a step towards diversification. It is also looking to bid for projects under the PLI (Production Linked Incentive) scheme.

At the COP26 climate summit in Glasgow earlier this month, Prime Minister Narendra Modi said India would achieve net-zero emissions by 2070. For this to happen, it large miners such as CIL and generators such as NTPC must focus on diversification, industry experts and analysts say.

Focus on sustainability

According to Pralhad Joshi, Minister of Parliamentary Affairs, Coal and Mines, diversification is the only means to sustainability.

“The future holds challenges for the coal sector but also presents an opportunity of never-realised-before potential. Can we convert the fuel of the past to fuelling the future? We are already on our way,” Joshi said.

Also see: India not keen on coal power phaseout but plugs into deal on energy-efficient appliances

The government is looking at ensuring sustainability in mining operations to create a sector that is future-ready.

With around 55 per cent share, coal occupies the major space in India’s energy basket. However, there has been an increasing focus on greener and renewable energy forms in a bid to migrate from a largely fossil driven energy economy to one that is powered by cleaner sources.

Capacity expansion in renewables

In FY21, nearly 75 per cent of the total electricity generation came from thermal while renewables accounted for around 11 per cent. The share of thermal is expected to come down to 70 per cent and that of renewables is likely to increase to 16 per cent by FY25, driven by an addition of capacity in renewables over the next three-to-four years, Sabyasachi Majumdar, Senior Vice President & Group Head – Corporate Ratings, ICRA, said.

Also see: Renewables key to achieving climate goals

“Nearly 60-65 GW of capacity is likely to be added in the renewable energy segment over the next 3.5 years with a majority coming from the solar space. Once storage becomes economical, renewables will get a further fillip. Coal India is also looking at diversification into solar energy. They are also one of the bidders in PLI scheme,” he said.

CIL’s new subsidiaries

CIL had, earlier this year, incorporated two new subsidiaries — CIL Navikarniya Urja for development of non-conventional or clean and renewable energy, and CIL Solar PV for development of solar photovoltaic module.

The company plans to generate close to 3,000 MW of solar power by 2024 at an estimated investment of ₹13,500 crore. While part of it would be funded through the company’s internal accruals, the remaining would be met through the SPV and bank loans.

Coal retains majority

However, at the recent annual general meeting, Coal India Chair, Pramod Agrawal, had said that the entry of renewable energy sources would not destabilise coal in immediate future. It would continue its lead role in India’s electricity generation as indicated by the consumption pattern.

Also see: Climate finance isn't charity, says Bhupender Yadav at COP26

Of the country’s total power generation of 1378.525 billion units (BU) during 2020-21, including renewable energy sources, coal based generation was 950.751 BU — around 69 per cent. Additionally, coal continues to stoke many non-power industries including cement, fertilizers, sponge iron, aluminium and others.

Coal continues to be a preferred energy fuel in India due to its abundance, availability and affordability and till alternative energy sources start making significant contribution, there is no replacement for coal as the country’s irreplaceable prime energy source, he had said.

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