Page 7 - AsiaElec Week 36 2021
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AsiaElec COMMENTARY AsiaElec
India’s coal pipeline no longer
necessary as demand growth slows
INDIA INDIA’S current 27-GW pipeline of coal-fired FY 2020 as long as India achieves its non-coal
power plants risks becoming a white elephant generation targets.
by 2030, as the country’s expanding renewable Using the IEA’s 5% projection, India’s peak
sector means that coal will not be needed to meet demand would reach 301 GW by 2030. This is
forecast demand growth. about 40 GW less than the Indian Central Elec-
Research from UK think-tanks Ember and tricity Authority (CEA’s) Optimal Generation
Climate Risk Horizons (CRH) warned that new Capacity Mix (OGCM) forecast.
coal capacity risks becoming “zombie” plants In effect, more coal capacity beyond what’s
and mopping up investment capital that could be already under construction is not needed to
more efficiently and economically used to boost meet the aggregate demand growth by FY 2030.
India’s renewable energy (RE) ambitions. Instead, substituting 27 GW of coal with bat-
Crucially, the think-tanks concluded that tery storage would save the Indian power system
coal projects could be abandoned without need- $6bn per year in terms of reduced power pur-
ing to sacrifice the power system’s ability to meet chase costs.
future demand. The report warned that the economics of
Ember said $33bn of potentially wasted capex India’s electricity generation sector have changed
could be saved by killing the “zombie” coal pro- drastically in the last five years, and that demand
jects. India could make annual savings of $6bn had stalled because of the coronavirus (COVID-
by investing in renewables and storage rather 19) pandemic. Actual demand fell from 1,389
than coal. TWh in 2019-20 to 1,391 TWh in 2020-21.
The forecast rests on data showing that India’s India’s power sector still suffers from some
electricity demand growth rate has slowed inertia, the report said, as coal power players
in recent years, diverging significantly from (both government and private) and regulators
previous Central Electricity Authority (CEA) have allowed new coal power proposals to move
projections. through the system.
Even if India’s power demand grows 5% The risk for India is that 27 GW of “zom-
annually, in line with the most optimistic Inter- bie” coal plants would waste public finances,
national Energy Agency (IEA) projection, coal- lock consumers into expensive contracts and
fired generation in FY 2030 will be lower than in threaten India’s ambitious green targets.
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