Private Indian companies are signalling a renewed interest in coal-fired power, proposing investments in at least 10GW of capacity in the country, Reuters has reported.
This marks a significant shift after a six-year hiatus in substantial private sector engagement in this segment.
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Companies such as Adani Power, JSW Group and Essar Power have communicated their willingness to the Indian Ministry of Power to either expand existing plants or revive stalled projects.
The proposed investments, which have not been publicly disclosed, could amount to billions of dollars.
The government is actively seeking private investment to increase coal-fired capacity by 80GW by 2032.
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Coal-fired power plants currently represent half its total installed capacity of 430GW, with renewables and hydro contributing 135GW and 47GW, respectively.
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By GlobalDataA power ministry spokesperson stated that the private sector’s commitment aligns with the nation’s energy needs and highlighted India’s progress in surpassing international emission reduction commitments.
The spokesperson stated: “The private sector is now expressing interest because of financial viability and assurance that payments will be made on time.”
The Association of Power Producers, representing coal-fired power developers, expressed the eagerness of its members to expand capacity in a letter to Power Minister R K Singh, dated 4 December 2023.
Proposals include Adani Power’s plan to add 4.8GW and JSW 1GW.
Essar Power aims to establish 1.6GW in Gujarat by 2029 and Vedanta is also expected to add 1.9GW of capacity. These plants could be operational by 2032.
Private investments historically drove more than 56GW or 60% of new coal-fired power, but this dropped significantly due to financial stress, shifting the burden to government entities.
More than 23GW of private sector coal-fired projects are currently on hold or unlikely to be commissioned, representing more than 10% of India’s coal capacity.
However, a recent increase in coal dependence due to slower renewable installations and higher power demand, coupled with new laws allowing increased tariffs, has made coal power more attractive. This has been reflected in rising profits and in the share prices of generators.
At the same time, the state-owned National Hydroelectric Power Corporation (NHPC) has announced a Rs7.96bn ($105.5m) investment in a 1.2GW solar power project in Uttar Pradesh, to be completed in 2026.
The project, part of India’s diversification into renewable energy, will be developed by an NHPC subsidiary and will generate 2.4 billion units of electricity annually.
