The Indian government has asked private companies to boost investments in new coal-fired power plants to meet the country’s growing demand for energy, Reuters reported on Tuesday.
Power Minister Raj Kumar Singh held a meeting with private firms and urged them to “not miss the growth opportunity,” and build more coal-fired power capacity, the outlet said, citing officials familiar with the matter.
The country’s demand will rise to 335 gigawatts (GW) by 2030, compared to the current 240 GW, according to the latest estimates, the minister said.
India, one of the world’s top carbon emitters, has about 27 GW of coal-based power plants under construction and another 24 GW of capacity is in pre-construction stages, according to Singh.
The continued increase in coal-fired generation highlights India’s reliance on the fossil fuel due to soaring energy consumption. Electricity demand has surged by around 20% since August, compared to the same period last year. The authorities expect it to rise by at least 6% annually by the end of the decade.
Power demand during peak consumption hours can only be met by burning coal, since “storage technologies are costlier to support solar and wind-based energy generation,” officials said.
State investments dominate the Indian power sector; however, private funds still account for 36% of installed capacity.
Most of the country’s coal-fired power plants currently under construction are being set up by state-owned companies. A decade ago, private firms stopped investing in coal power plants due to the absence of long-term power supply bids from consumers, Reuters said, adding that thus far, the only private firms involved in building coal plants are Adani Power and JSW Energy.
According to a recent government report, India will remain heavily dependent on coal as the largest source of power generation for the next decade, even with its efforts to ramp up renewable energy projects.
“The minister assured that the government may look at funding support to such projects from state-run financiers such as Power Finance Corp and REC Ltd,” one of the officials told the outlet.
The Central Electric Authority (CEA), which advises the government on policy matters and formulates plans for the development of electricity systems, said earlier that additional plants will need to be built as coal-fired power generation will still account for about 54% of India’s total electricity output in 2030. Fossil fuel currently covers almost three-quarters of the country’s power generation.
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