India To Delay Coal Plant Closure

By Irina Slav - Aug 18, 2022, 

India is set to delay the retirement of some coal plants even as it builds new coal generation capacity, Bloomberg has reported, noting this would interfere with climate commitments.

Citing unnamed sources, the report says that plans are to reduce the capacity set for shutdown to less than 5 GW by 2030. The reason for the change is the surge in electricity demand amid tight energy supplies.

The news comes just as India’s government approved a revised version of its Nationally Determined Contributions under the Paris Agreement. Under the revised version, India has committed to increasing the share of non-fossil fuel energy sources in its energy mix to 50 percent by 2030.

Yet these goals may have to be compromised because the need to secure enough energy for a growing population right now is trumping the commitment to make as much of this energy as possible green.

Currently, India generates as much as 70 percent of its electricity from coal power plants with a total capacity of 204 GW. It also has plans to construct 30 GW of new capacity to replace aging plants and more than 20 GW in all-new coal generation capacity. This will expand the country’s total coal generation capacity to more than 250 GW by 2030.

In renewable energy, plans are to have 500 GW in capacity installed by 2030. Yet the buildout of this renewable capacity has been slower than planned, not least because of high natural gas prices, the Bloomberg report also notes, which has prompted the government to lean more heavily on fossil fuels.

The situation is not unique to India, either. Europe has also stepped up its consumption of coal despite its much more advanced state of renewable energy development because the available renewable capacity has proved insufficient to meet energy demand.

By Irina Slav for Oilprice.com