Energy Transition under Pressure, India Reportedly to Cut Power Generation from at Least 81 Coal-Fired Plants

According to media reports, India plans to reduce the power generation capacity of at least 81 coal-fired power companies over the next four years in an effort to replace expensive thermal power generation with cheaper green energy, said the Ministry of Power written to state and federal government officials in the energy sector.

The letter was sent on May 26, in which India's Ministry of Power stated that the scheme was designed to maximise green energy potential and save costs, but would not involve the closure of expensive, ageing power plants. Data shows that India currently has 173 coal-fired power plants.

India's Ministry of Power says future thermal power plants will operate at a technical minimum to accommodate cheaper renewable energy sources.

India expects the scheme to reduce electricity generation by 58 billion kwh in 81 utilities, which may lead to 34.7 million mt of coal savings and 60.2 million mt of carbon emissions reduction, the letter said.

India is the second largest consumer, producer and importer of coal in the world, with coal accounting for nearly 75% of India's total power generation. The country is also the third largest emitter of greenhouse gases in the world and is currently 37% short of its green energy target for the end of 2022.

Since April this year, India has been hit by rare high temperatures. According to the country's Meteorological Department, the average temperatures in April 2022 reached 35.9 and 37.78 degrees Celsius in the north-western and central regions of India respectively, both record highs in 122 years.

With electricity demand at a record high in April, pressure on domestic power generation soared and the government was forced to restrict power, resulting in the worst power cuts across India in more than six years. The severe power crisis has caused India to cancel plans to reduce power coal imports to zero.