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New coal-fired power plants in India: Reality or just numbers?

June 05, 2021
Kashish Shah
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Key Findings

Coal-fired power cannot compete with the ongoing cost reductions of renewables.

Half of the capacity now under construction is sponsored by state power generation companies.

Coal-fired capacity is expected to peak at 220-230GW by 2025.

Executive Summary

India has a total of 209.2 gigawatts (GW) of coal-fired capacity (including lignite) as of March 2021. This forms 55% of the total installed capacity and 71% of the total power generation.

India’s new draft National Electricity Policy mentions the addition of new coal-fired capacity into the generation mix, although it does not provide details of the amount of capacity to be added. However, in the past few years various government studies have provided projections for India’s power generation mix.

The Central Electricity Authority’s (CEA) January 2020 report on optimal generation mix projects India’s total coal-fired capacity to be 267GW by the end of FY2029/30 and to form 33% of the total capacity and 54% of the total generation.

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CEA’s Projected Capacity and Generation Mix by FY2029-30
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CEA also models battery storage capacity

Reaching the CEA’s optimal generation mix projection of 267GW of coal-fired capacity by FY2029/30 would require 58GW of new capacity additions in the coming 9 years—roughly 6.4GW annually.

Reaching the CEA’s optimal generation mix projection of 267GW of coal-fired capacity by FY2029/30 would require 58GW of new capacity additions in the coming 9 years—roughly 6.4GW annually.

According to Global Energy Monitor’s Global Coal Plant Tracker’s (GCPT) data from January 2021, there was 36.6GW of coal-fired capacity under construction. Of which, 3.5GW was commissioned in the last quarter FY2020/21 (January to March)— leaving 33.1GW of coal-fired capacity now under construction.

In this note we review and discuss the viability of these under-construction coalfired power plants and evaluate the associated stranded asset risk in building additional coal-fired capacity in India’s electricity system.

Please view full report PDF for references and sources.

Kashish Shah

Kashish Shah is a Senior Research Analyst with Wood Mackenzie. Previously,
he worked as an Energy Finance Analyst with the Institute for Energy

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