The Ministry of Power (MoP) has set sights on commissioning 10 new thermal power plants with a combined capacity of 7,010 megawatts (MW) during FY’23. This would be the highest capacity addition since FY’18.
Apart from the Yelahanka combined cycle plant, which is designed to run on natural gas, the remaining capacity consists of coal-based plants owned by the Centre and the states.
Most of the upcoming plants have signed fuel supply agreements (FSAs) for coal allocation, whereas plants like Ghatampur, Telangana and Obra-C would source coal from the captive blocks allocated to them. However, the coal block linked with the Telangana plant is under deliberation as NTPC is considering to surrender the block.
Upcoming power plants
Source: Power Minsitry | Quantity in MW
In case of of North Chennai, the unit has entered a memorandum of understanding with MMTC for supply of 2.51 million tonnes (mnt) per annum of imported coal. But the Coal Ministry has also recommended it to secure long-term domestic coal linkages.
Additional coal demand
The country has seen an unprecedented rise in power demand, marking a significant recovery post covid-induced lockdowns. This compelled domestic coal companies to step-up coal dispatches to the power plants as they cater majority of the supplies.
Indigenous coal supply to the plants jumped 22% y-o-y to 667.6 mnt in FY’22. On the other hand, imports had fell 41% y-o-y to 27 mnt due to elevated prices in global market.
The commissioning of the new plants would require coal supply of around 27 mnt annually. The estimation was made taking into account specific coal consumption of 0.65 kg/unit, while considering that the plants run at a plant load factor of 70%.
Sluggish pace of capacity addition
Despite the robust demand, the Indian power sector has witnessed a steady decline in capacity addition of thermal plants, given the thrust on promoting clean energy sources.
During FY’22, a total of 4.485 gigawatts (GW) of thermal power capacity was commissioned against the set target of 10.285 GW. In the similar time-frame, capacity addition in renewables increased by 109% y-o-y to 15.45 GW in FY’22.
Recently, MoP has also proposed to reduce power generation from existing coal-fired utilities and substitute it with renewables in a phased manner.
Nevertheless, the country would be in need of new power plants to replace the old and inefficient plants gradually. As per MoP data, thermal capacity close to 27.55 GW is under construction and capacity of 18.32 GW is under development that are based on supercritical and ultra-supercritical technology.
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