India plans to allow abandoned coal-fired power plants to sell energy

Energy

Sudarshan Varadhan

BENGALURU (Reuters) – India’s energy ministry proposes that coal-fired power plants continue to sell energy after contracts have been concluded with buyers, according to a letter released by Reuters, despite national promises to shut down old power plants to reduce pollution.

The proposal, if approved, would help old coal-fired power plants generate additional revenues, increase liquidity in short-term energy markets, and help distribution companies in countries with a deficit in accessing cheaper energy, the ministry said in a draft proposal on Friday.

“It is in the interest of the consumer to keep electricity tariffs as low as possible,” reads a letter sent to India’s energy departments and heads of federal utilities such as NTPC Ltd.

Such a move would allow federal electricity generators such as the NTPC to “sell energy by whatever means” after distribution companies leave the contract at the end of their term, the ministry said.

Energy Minister RK Singh and Finance Minister Nirmala Sitharaman previously said they plan to shut down old coal-fired power plants. The Ministry of the Environment also insisted on the closure of the coal-fired power plants, which account for 80% of India’s industrial pollution, if they fail to comply with green regulations.

The result remains unclear. The Ministry of Energy took notice of the states and heads of energy producers led by the federal government. The final decision on the application is not close.

A high minister of the ministry said on Sunday that only inefficient power plants will be shut down.

“Profitable utilities that provide cheap energy will still be able to function. Small, inefficient power plants will be shut down, ”the official said.

Distribution companies served by states such as Punjab, Delhi, Andhra Pradesh and Odisha want to relinquish the power given by federal utilities after 25 years of building the power plant, the energy ministry said.

The countries cited the availability of excess capacity and the high cost of electricity as reasons for giving up the power allocated to them in their contracts.

The list of the Ministry of Energy in 2019 shows that distribution companies wanted to return energy from the media with a capacity of 5.75 gigawatts.