India could build new coal-fired power plants because they generate the cheapest power, according to a draft electricity policy paper seen by Reuters, despite growing calls from environmentalists to deter coal use.
Coal’s contribution to power generation in India has fallen for the second year in a row in 2020, a departure from decades of growth in coal-fired electricity. Still, the fuel accounts for nearly three-quarters of India’s annual energy production. read more
Environmentalists have long opposed India’s adding new coal-fired capacity. Solar and wind energy prices are falling to record lows, which would help cut the world’s third largest greenhouse gas emissions.
John Kerry, US special presidential envoy for climate, said this month that India is “getting the job done on climate and moving the curve,” as he began talks with government leaders to reduce carbon emissions faster to help global warming slow down the earth.
But a February 28-page draft of the National Electricity Policy (NEP) 2021 – which has not been made public – showed that India could add new coal-fired capacity, although it recommends stricter technology standards to reduce pollution.
“While India is committed to adding more capacity through non-fossil generation sources, there may still be coal-based generation capacity to be added in the country as it is still the cheapest source of generation,” said NEP -design.
All future coal-fired power plants should only use so-called “ultra-supercritical” less polluting technologies “or other more efficient technology,” he added.
The state-run NTPC Ltd (NTPC.NS), India’s largest electricity producer, said in September that it will not acquire land for new coal-fired projects. Private companies and many state-run corporations across the country have not invested in new coal-fired power for years, saying they were not economically viable.
A source with direct knowledge said a government panel of several energy industry experts and officials will discuss the design and make changes before seeking government approval.
The Indian energy ministry did not immediately respond to a request for comment on Sunday.
The draft document also proposed trading renewable energy on day-ahead markets, creating separate tariffs for charging points for electric vehicles and privatizing electricity distribution companies.
ALTERNATIVE POWER SOURCES
The 2021 NEP is India’s first attempt to overhaul its electricity policy in 2005, when the country produced negligible renewable energy.
Experts say phasing in renewable energy sources and rapidly phasing out conventional sources such as coal and natural gas can lead to instability in the power grid, potentially resulting in power outages.
Although the proposal for a flexible use of coal-fired and natural gas-fired power is suggested to ensure the stability of the grid in the coming years, the design policy mentions the promotion of clean power as the main goal.
The policy proposal suggested accelerating the introduction of “cost-effective” hydropower pumped storage to support the power grid, adding that only 4.8 gigawatts (GW) of a potential 96.5 GW of pumped storage capacity has been developed so far.
The policy also recommends compensating natural gas-fired power plants for operating at reduced efficiency to ensure grid stability and for increased wear and tear due to fluctuations in generation.
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