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Indian government plans to phase out aged coal-based plants: source

New Delhi — The Indian government is planning to phase out coal-based power plants that are more than 25 years old and are inefficient in order to reduce carbon emissions, a Central Electricity Authority (CEA) source said Tuesday.

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Power plants with capacity of around 30,000 MW that burn around 100 million mt/year of coal are likely to be retired in a phased manner, the source said.

A committee has been formed that will hold consultations with state governments and will formulate a list by December of the plants that need to be closed down, he said.

The Ministry of Environment, Forest and Climate Change recently issued new emission regulations for coal-based power plants, which will become effective from January 1, 2017.

Article Continues below...

Sources said around 6,000 MW of capacity is expected to be shut down in a first round by March 2017.

According to the CEA source, the coal linkages of these old plants could be used for new capacity.

However, he said there is already adequate coal production by state-run Coal India Limited and power plants are running at 60% of the plant load factor because of low power demand.

The government is also focusing more on non-conventional sources of power generation at the expense of coal-based power capacity, he said.

Coal currently accounts for around 62% of India's total power generation, according to CEA data.

A Mumbai-based power sector analyst said coal-fired generation is likely to remain the mainstay of the Indian power generation mix as the country needs cheaper power to fuel its industrial growth and renewables will only be part of the mix alongside coal-fired generation.

--Sapna Dogra, newsdesk@platts.com
--Edited by Jonathan Fox, jonathan.fox@spglobal.com