This comes at a time when private financers are increasing finding it hard to invest in the sector, it says
The 8.8 gigawatt (GW) of coal-fired power capacity that entered the construction phase in India last year were all supported by public finance, according to a report released on March 26, 2020.
Titled Boom and Bust 2020: Tracking The Global Coal Plant Pipeline, the report has been prepared by Global Energy Monitor, Greenpeace International, the Sierra Club, and Centre for Research on Energy and Clean Air (CREA).
India started construction on 8.8 GW of new coal power capacity — at four power plants including Adani Godda power plant as well — despite the country already having 19.3 GW of coal plants frozen mainly due to financing problems, the report said.
All four of these coal plants are financially reliant on the Power Finance Corporation (PFC) and Rural Electrification Corporation, both of which fall under control of the Union Ministry of Power and are set to merge this year.
PFC is heavily focussed on fossil fuels, the report said. PFC’s disbursements for renewable energy accounting is approximately five per cent as compared to 25 per cent total disbursement to thermal sector, according to it.
This is over and above the recent investment in the four coal plants mentioned above.
Coal is surely losing its charm, as huge 47.4 GW coal-fired power projects at different stages, were cancelled in India in 2019, reducing the total under-development coal capacity to 66 GW, the report said.
On March 17, the power ministry informed Parliament about the removal of more than 23 GW capacities of coal-fired power stations belonging to the private sector from the under-construction category, the report said. Most of these plants started development before 2011, it said.
It is apparent in the report that the private sector is exiting coal plant development in India and the public sector is stepping in and footing the bill.
“The shrinking coal pipeline in India, forced by huge overcapacity, subdued demand for electricity, falling utilisation factor, falling prices of renewable energy, drying investments, and increasing public resistance due to pollution gives hope for a future with a reduced fossil footprint for India,” Sunil Dahiya, analyst at CREA, said.
“But, at the same time, new capacity being added to the grid, new projects being given clearances and infusion of public money into new projects by the government raises concerns,” he added.
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