India’s coal-fired power capacity may hardly grow over the next decade despite plans to build new plants as older facilities that can’t meet new environmental guidelines face closure.
The nation may need to scrap about 40 gigawatts of thermal capacity that can’t be modernized to meet emission targets, according to Central Electricity Authority Chairman Ravindra Kumar Verma. That’s roughly equivalent to the amount of coal-fired power CEA expects to be installed through 2027, though more may need to be built if more older plants than expected can’t be upgraded.
“They are really old plants and there is no space to retrofit them,” Verma said in an interview last week at his office in New Delhi. “If the number of non-compliant plants exceeds current estimates, then 10 gigawatts to 12 gigawatts of new coal may have to be requisitioned.”
The possible closure would reinforce the country’s commitment to battling climate change and challenge criticism of its coal production goals leveled by U.S. President Donald Trump after he pulled his country out of the Paris climate deal. Prime Minister Narendra Modi has set the world’s largest renewable energy target after China, while the country’s power minister Piyush Goyal said Monday that renewables capacity would overtake coal-fired power by 2022.
“It’s a substantial improvement leading to lower coal consumption and reduction of the carbon footprint,” said Kameswara Rao, the Hyderabad-based leader for energy, utilities and mining at the Indian division of PricewaterhouseCoopers LLP. It is also an opportune time to shut some plants as there is sufficient supply available, he added.
The country expects to produce surplus power for existing customers in 2017 for the first time in at least 13 years amid slowing demand-growth.
The nation plans to raise the share of power from non-fossil fuel sources to 40 percent by 2030 as part of its climate commitments. CEA’s Verma expects India to increase total generation capacity to 515 gigawatts by 2022 from the current 329 gigawatts, mostly with the addition of renewable capacity.
India’s proposed emissions regulations would require existing coal-fired plants with a combined capacity of 112 gigawatts to install flue-gas desulfurization, or FGD, equipment to reduce sulfur emissions. India unveiled its first-ever standards for particulate matter, sulfur dioxide and nitrogen oxides from thermal power plants in December 2015.
The rules, which are among the most stringent in the world, would increase the cost of coal power generation by 9 percent, according to a May 19 Bloomberg New Energy Finance research note. The cost of energy from emissions-compliant coal power plants would increase to 3,890 rupees ($60) a megawatt-hour, compared with new solar power at 2,440 rupees a megawatt-hour and wind tariffs at 3,460 rupees a megawatt-hour, it said.
“India may continue to keep building new coal power plants — albeit at a much slower rate than in the past — to meet its growing base-load power requirements,” the BNEF said.