In April and May this year, there have been two consequential news stories in the Indian energy sector. The first one is that NTPC Green Energy is set to be listed this year. The second news is that India will not approve any new coal plants beyond those already under construction. When read together, the investment strategies of India’s energy companies indicate that they have already taken a turn towards sustainability.
Given the huge preponderance of coal in the economy – it still accounts for 77 per cent of electricity generation this should be considered significant. Certainly, the changes are coming far faster than anticipated, given the stretched-out target set by India of net zero by 2070. State-owned NTPC is by far the largest to make the transition, but Tata Power and even Adani Power, despite the noises surrounding its coal business, are on the same trajectory.
The coal ministry has set a target of total coal production of 1.01 billion tonnes for the year. The targets are 1.3 billion tonnes in FY25 and 1.5 in FY30. This includes the numbers from commercial coal mining. Compared to the level of 606.89 mt of production in FY19, CIL’s production has risen by 15.9 since then to 703.21 mt. The economy’s total production of coal has increased by 22.6% in just one year.
The coal ministry signed contracts for 23 coal mines in FY23, totaling 33.224 metric tonnes of peak annual capacity. Another bunch of agreements with 25 more miners will be signed in FY24. The ministry estimates a similar 30-33 metric tonnes of incremental capacity addition from them.
Coal capacity under construction and expected to be commissioned during 2022 -30 is around 26,900 Mw. Out of this, coal capacity of 6,920 Mw is under bidding, as on end February, 2023. Additional coal-based capacity of Central and state sector utilities, at 9,420 Mw.