India may build new coal-fired power plants as they generate the cheapest power, according to a draft electricity policy document seen by Reuters.
The proposed move would fly in the face of growing calls from environmentalists to deter use of coal.
Coal’s contribution to electricity generation in India fell for the second straight year in 2022, but the fuel still accounts for nearly three-fourths of India’s annual power output.
According to Reuters, 28-page February draft of the National Electricity Policy (NEP) 2021 – which has not been made public – showed India may add new coal-fired capacity, though it recommended tighter technology standards to reduce pollution.
“While India is committed to add more capacity through non-fossil sources of generation, coal-based generation capacity may still be required to be added in the country as it continues to be the cheapest source of generation,” the NEP draft says.
All future coal-based plants should only deploy so-called “ultra super critical” fewer polluting technologies “or other more efficient technology”, it added.
However, while suggesting flexible use of coal-fired and natural gas-fired power to ensure grid stability in the coming years, the draft policy lists promoting clean power as its primary objective.
The policy draft suggests expediting adoption of “cost effective” pumped hydro storage to support the electricity grid, adding that only 4.8 gigawatts (GW) of a potential 96.5 GW of pumped storage capacity has been developed so far.
The policy also recommends compensating natural gas-fired plants for operating at reduced efficiency to ensure grid stability, and for suffering higher wear and tear due to fluctuations in generation.
The possibility of more coal plants comes after state-run NTPC, India’s top electricity producer, said in September it will not acquire land for new coal-fired projects.
Private firms and many run by states across the country have also not invested in new coal-fired plants for years insisting they are not economically viable.