India needs to watch out for new coal power plant proposals of 27 gigawatts (GWs) of capacity that could potentially become superfluous to the overall country electricity requirements by 2030, according to a report by Ember and Climate Risk Horizons.
These project proposals could jeopardise the prospect of the ambitious renewable energy target of achieving 450 GW by 2030.
These surplus “zombie” plants that would be neither dead nor alive - require about ₹2,47,421 crore ($33 billion) of investment. Significantly, they are projected to lie idle or operate at uneconomic capacity factors due to surplus generation capacity in the system.
Aditya Lolla, a Senior Analyst at Ember, a climate and energy think tank, says: “As India recovers from the disruption caused by the Covid-19 pandemic, how the country uses scarce public resources will be absolutely crucial. By avoiding these unnecessary “zombie” coal plants, India can not only save lakhs of crores of rupees, but also lower power costs and reiterate its commitment to the success of its clean energy transition goals.”
The analysis by energy experts at Ember and Climate Risk Horizons demonstrates that India doesn’t require new coal capacity beyond the 33 GW of new coal plants already being built, to meet demand growth by FY 2030.
Even with a 5% annual growth in power demand projection, the analysis shows that coal-fired generation in FY 2030 will be lower than in FY 2020, as India achieves its 450 GW RE and other non-coal targets.
The report finds that India’s public and private power generators have already made over 300 GW of renewable energy (RE) commitments.
Furthermore, India can meet peak demand in FY 2030 even if it retires its old coal plants and stops building new coal beyond those under construction. By FY 2030, India will have a total firm capacity of about 346 GW in addition to 420 GW of variable renewables capacity to meet an estimated peak demand of 301 GW.
While the daytime peak demand would be easily met with India’s huge planned solar capacity, the report shows that evening peaks will be most effectively met by additional battery storage at a lower cost than building new coal.
The analysis reveals that switching investment from coal projects to renewables and battery storage would save the Indian power system an additional ₹43,219 crore a year from 2027 onwards in terms of reduced power purchase cost, in addition to capex savings, without sacrificing the power system’s ability to meet future demand.
Abhishek Raj of Climate Risk Horizons, says “Once incurred, these wasted investments will lock Discoms and consumers into expensive contracts and jeopardise India’s RE goals by adding to the system’s overcapacity. The smart option is to divert these resources to renewables and storage to build a cheaper, more resilient grid for the future.”