India: Govt mulls mandatory renewable procurements for new thermal power plants

The upcoming thermal power plants in the country would be required to execute mandatory renewable energy (RE) procurement in tandem with the amendments proposed by the Ministry of Power, Govt. of India.

The promotion of renewables has been identified as an important stepping stone towards the government’s plan of net zero target for decarbonization by 2070.

In this regard, the MoP has asked the coal-based power generators to ensure that minimum quantum of RE procurement is equivalent to 25% of the installed capacity of the coal plants that will be commissioned post 1 April 2024, by suggesting amendments to the clause 6.4.5 of the Tariff Policy.

This policy underlines that the newly constructed coal-based plants after a specified date are to procure RE, either by setting up a new plant or from the existing plants, to the extent prescribed by the government. The RE would be bundled with the thermal generation, thereby enabling the thermal power producers to meet their renewable purchase obligations.

Coal capacity static in H1 period

The coal-fired plants been the back-bone of country’s energy mix as it accounts for almost 50% of the overall installed power generating capacity.

However, notwithstanding the robust power demand this year, the coal plants have witnessed a dismal performance in terms of capacity addition. Notably, the power sector has not seen any new addition in coal-based power plants in the first half of FY2022-23 whose capacity stands at 204.08 giga-watt (GW) at the end of September.

The development of coal plants has been slowed-down by the fact that several existing units are underutilised. Supported by strong industrial and commercial activity, power consumption has peaked to 207.23 GW against this the country possess an overall installed capacity of 407.8 GW as on September, 2022.

At the same time, numerous constraints resulting from Covid restrictions have also delayed progress of several ongoing projects. The MoP has highlighted that new coal-fired plant capacity to the tune of 6.35 GW would be added in FY23.