India plans to reduce power generation from at least 81 coal-fired utilities over the next four years, the federal power ministry said in a letter on May 30, in an effort to replace expensive thermal generation with cheaper green energy sources, according to a report by S&P Global Platts.
In a letter sent to energy departments of state and federal governments on May 26, it was noted that current regulations call for thermal power plants to generate at a minimum of 55 percent, although generation can be reduced to as low as 40 percent.
In an effort to reduce the cost of power delivered to consumers, the ministry selected those power plants with higher tariffs.
A reduction of 58 billion kWh in power will result from this, according to the letter, adding that it will save 34.7 million tonnes (MT) of coal and cut carbon emissions by 60.2 million MT. Furthermore, about 30,000 MW of renewable energy will be needed to transition to this transition, the letter said.
With this development, India will be one step closer to its goal of generating 500 GW of non-fossil fuel energy by 2030. Analysts, however, have called this goal ambitious and believe that India will have to take even bolder steps to meet its clean energy objectives.
With a total capacity of 203.35 GW, India has 173 thermal coal-fired power plants. This letter comes at a time when the country is struggling with a coal shortage, which pushed it into a power crisis in April, less than a year after it emerged from a similar crisis in October 2021.
Because of the war between Russia and Ukraine, coal prices have risen globally, which has led to a heavier reliance on domestic coal production in India. As of May 26, power plants had coal stockpiles sufficient to burn for over eight days.
Kalimantan 4,200 kcal/kg GAR prices have averaged $88.15/mt FOB so far this year, compared to $45.94/tonne in the same period of 2021, up nearly 92 percent on the year, according to data from S&P Global Commodity Insights. So far in 2022, Newcastle 5,500 kcal/kg NAR coal with 23 percent ash has averaged $182.54/tonne, up 228 percent from $55.52/tonne in the same period last year.
On May 30, S&P Global reported that India's Coal India will procure coal for power stations operated by the federal government and state governments for the first time since 2015.The S&P Global Platts report shows that India imported 17.4 million mt of thermal coal in January and February of this year. In 2021, the country imported 161.4 MT, down from 172.8 MT in 2020.