India's Power and Renewable Energy Minister, R K Singh, called on private companies to intensify investments in new coal-fired power plants. The appeal, made during a meeting in New Delhi, underscores the nation's commitment to meeting a projected additional requirement of nearly 30 gigawatts by 2030, even as international calls mount for a cessation of such facilities.
Sources present at the meeting revealed that Minister Singh urged private entities not to miss the growth opportunity presented by investments in coal projects. The call comes just weeks ahead of the U.N. climate conference, where France, with U.S. support, aims to advocate for a halt to private financing for coal-based power plants, as reported by Reuters.
The Ministry of Power in India did not immediately respond to requests for comment on the matter.
Private investment in India's power sector has witnessed a decline since 2018 when it equaled or surpassed government investments. Presently, it constitutes 36% of the country's total installed capacity. State-owned companies, primarily, have been leading the development of coal-based capacity, with Adani Power (ADAN.NS) and JSW Energy (JSWE.NS) standing as the sole private companies engaged in such projects.
Several private firms had refrained from constructing new coal-based plants in India over a decade ago, citing a lack of financing and the absence of long-term power supply bids from consumers. However, a surge in energy demand in recent years, fueled by an uptick in economic activity, has prompted a reevaluation of this stance.
Since August, India has witnessed an 18% to 20% year-on-year increase in energy demand. The government anticipates this upward trajectory to persist, projecting at least a 6% annual rise until the end of the decade.
During the meeting, Minister Singh revealed new estimates predicting India's peak power demand to reach 335 gigawatts by 2030, compared to the current 240 gigawatts. Singh emphasized that coal-based power stations would play a crucial role in meeting the majority of the peak-hour electricity demand, citing the costlier nature of storage technologies to support solar and wind-based energy generation.
With a total coal-based capacity addition of 58 gigawatts in the pipeline, an expected gap of over 30 gigawatts remains. Singh assured private power companies that the government may consider funding support for such projects from state-run financiers like Power Finance Corp and REC Ltd.
All sources from the meeting requested anonymity as they were not authorized to speak to the media. Singh reiterated that despite the addition of coal-based capacity, India remains committed to its climate goals, aiming to shift to 50% non-fossil-based power capacity, as the country concurrently expands its renewable energy projects.
