India to modernise coal power with more than USD 30 billion investment in coal-fired power plants
The Indian government has allocated USD 33 billion to modernise coal-fired power plants. This amount will go to the core companies to purchase equipment to increase capacity.
Government plans
The authorities plan to significantly increase the number of coal-fired power stations in the coming years. Analysts note that such a move will lead to a significant increase in purchases and sales of equipment needed for these power plants. First, the number of deals by the country’s largest power companies will likely increase. These include the state-owned NTPC, SJVN, and the private Adani and Essar. The government’s target for the industry is to add 31 GW of capacity. It should reach that level in 5 to 6 years.
This capacity addition is unprecedented for India, especially compared to standard requirements. The government traditionally orders 2-3 GW of additional capacity annually. The exception was 2023, when the request was 10 GW. India’s need for new power plants is mainly due to ageing existing generation capacity. These cannot fully meet the demand for electricity during non-sunny periods of the day. Other factors are also contributing to the growing demand:
1. Following the pandemic, the country has experienced a strong economic recovery.
2. Increased activity in various sectors has contributed to an increase in electricity demand.
3. At the same time, the country’s climatic conditions have worsened with extreme heat waves.
4. In June 2024, the country experienced its worst energy shortage in 14 years.
5. At the time, the authorities used various methods to avoid blackouts at night.
6. These included cancelling scheduled maintenance of power generation facilities.
In addition, the government imposed a state of emergency on core companies. This forced them to use imported coal to run power stations. The country also bought electricity from other states.
Power generation forecast
Analysts predict that power generation will grow by 9.3% in 2024, reaching 1,900 kWh, a record high for the country since 2012.
Moreover, the intense heat wave will continue to be a significant factor in increasing demand for the resource. This, in turn, will increase demand in the fossil-fuelled power generation sector:
– production in this sector will increase by 9% to more than 76% of the total;
– coal-fired generation will increase by 8.9%;
– natural gas generation will increase by 10.5%.
The renewable energy sector will grow by 8.2%. However, it is not growing as fast as the traditional sectors.
India has failed to reach the 175 GW renewable energy target, which the government set for 2022 but has not yet been implemented.
