By December 2023, India is likely to see the addition of over 33 GW of power generation capacity through coal-fired plants based on efficient supercritical technology.
According to information tabled in Parliament recently, coal-fired power plants aiming to add 59,810 mw (or nearly 60 GW) are currently under construction. These projects are spread over all forms of ownership – Central government, state governments and private sector.
Out of this 59,810 mw capacity that is under construction, 36,105 mw is what is likely to materialize in phases beginning October 2020 up to December 2023. The remaining capacity, which is 23,705 mw, represents projects that are unlikely to fructify. These may include projects that are put on hold, projects that are under financial stress or projects whose fate is uncertain for one reason or the other.
Coming back to supercritical technology, coal-fired power plants with aggregate capacity 33,400 mw are under construction and these include only those projects whose commissioning is likely. Supercritical power projects aggregating 9,240 mw that facing an uncertain future have been excluded. The entire 9,240 mw represents private sector projects.
The 33,400 mw of supercritical power projects comprise units of both 660 mw and 800 mw ratings. While no details on the main plant equipment suppliers are provided in the information tabled in Parliament, it is learnt from independent sources that Bharat Heavy Electricals Ltd is prominent amongst suppliers.
Several years ago, India has pledged that all new coal-fired power plants would be based on supercritical technology. One can see the implementation of this proposal on ground. Of the 36,105 mw of likely capacity addition discussed above, 33,400 mw will come from supercritical power plants. The remaining 2,705 mw stands for non-supercritical (or subcritical) projects. These are projects are those that were planned before the supercritical mission and whose commissioning has been delayed.
It may also be highlighted here that existing subcritical power plants, which are currently in operation, are being retrofitted with flue gas desulphurization (FGD) units, with a view to controlling SOx and NOx emissions.
Summary of findings
- A total of 59.8 GW of coal-fired power generation capacity is currently under construction, out of which only 36.1 GW is likely to materialize. This addition will happen in phases from October 2020 to December 2023.
- Of the 36.1 GW, 33.4 GW will come from coal-fired plants based on supercritical technology.
- Today, the private sector is the biggest owner of coal-fired power capacity with a share of 37 per cent. By December 2023, this share will drop to 32 per cent. State government entities with a projected share of 35 per cent will constitute the single-largest ownership.
Private sector detached
When India opened up its power sector to private sector participation back in the early 1990s, there was a flurry of activity from multinationals to set up coal-fired power plants in India. This frenzy continued for around two decades, with Indian private sector entities also joining the fray. Now, it appears that the phenomenon has turned a full circle and one can confidently expect that private enterprise would like to stay clear of coal-fired power generation, or any other form of thermal power generation, for that matter.
It is not as if the private sector is moving away from power generation per se; the new focus area is renewable energy, mainly wind and solar. India has pledged to attain 175 GW of renewable energy capacity by 2022 and a preponderant share of this would come from private enterprise. Besides, renewable energy is an area that is getting much policy support from the government. Renewable energy is a far simpler area than coal-fired power plants where legacy challenges associated with land acquisition, environment clearance, coal linkages, formalizing PPAs, etc continue to bog down project owners. Besides, coal-fired power plants are running at low PLFs thanks to the resurgence in the country’s overall power generation capacity.
All the same, Central and state government entities are still pursuing coal-fired power plants, given that India’s dependence on coal cannot be wished away. Despite the growing emphasis on clean energy sources, coal-fired plants will continue to meet the country’s base load, at least in the foreseeable future.
As of August 31, 2020, a total of 23,730 mw of coal-fired power generation capacity was under construction by private sector companies. An incredible 23,205 mw of this is unlikely to materialize. Almost all projects are staring at an uncertain future, simply because they are just unviable in the rapidly changing energy environment. There are no new projects in this list of private sector; all projects represent all endeavours that were originally supposed to commission anywhere between September 2011 and March 2017. Just for the record, only one private sector project – Tuticorin Thermal Power Project (Stage 4, Unit-1, 525 mw) – is active with commissioning expected by January 2021. The project is owned by Sembcorp Energy.
The ownership concentration of coal-fired power plants will move to state government entities by December 2023, from private sector now.
State government: Biggest owner
As discussed above, 59,810 mw worth of coal-fired capacity is under construction, out of which 36,105 mw is likely to materialize in phases beginning October 2020 up to December 2023. This 36,105 mw includes 17,820 mw from Central government entities and 17,820 mw from state government agencies. The private sector accounts for an insignificant 525 mw. Thus, by the end of 2023, India’s total coal-fired power capacity will rise to around 2.36 mw.
What is noteworthy is that by December 2023, the share of private entities in India’s total coal-fired power capacity will drop to 32 per cent. State government entities will be the single largest holder of coal-fired power capacity, with a share of 35 per cent, with Central agencies owing the remaining 33 per cent.
Important Note: The information tabled in Parliament refers to “thermal” power projects. Barring one project of 370 mw which is combined-cycle gas-based, all other projects are coal-fired. This story has treated all projects as “coal-fired”. T&D India feels that such treatment has no adverse or significant bearing on the overall observations made and inferences drawn in this story.
