NEW DELHI, July 26: Decommissioning coal power plants older than 25 years on priority could result in total savings of Rs 37,750 crore, a study by Council on Energy, Environment and Water (CEEW) said.
Besides, an another study by CEEW suggested that power distribution utilities or discoms in India could save up to Rs 9,000 crore (USD 1.23 billion) each year by prioritising coal power despatch based on efficiency rather than the prevailing system which prioritises based on variable costs.
According to a study released by CEEW on Monday, this move can provide much needed respite to public discoms, which last reported a loss of Rs 61,360 crore (USD 8.4 billion) in FY’19.
The findings are based on the performance of 194 GW of Indian coal assets (out of a total capacity of nearly 205 GW) during the 30 months preceding the COVID-19 pandemic.
Further, the study found that prioritising efficiency-based despatch during this time could have improved coal fleet efficiency by 1.9 per cent, resulting in annual coal savings of 42 million tonnes (MT) and a commensurate reduction in greenhouse gas emissions.
The CEEW study also recommends considering 30 GW of India’s coal-based (power generation) capacity for accelerated decommissioning.
The proposed plants overlap with those identified for retirement in the National Electricity Plan (NEP), 2018.
The study also recommends temporarily mothballing a further 20 GW of relatively new capacity that does not feature in the NEP list.
Factoring in planned renewables and coal capacity, relegating these newer plants would not adversely affect supply at a system level.
In fact, it stated that relegating these inefficient plants would additionally result in a one-time saving of Rs 10,000 crore (USD 1.37 billion) on account of avoided pollution control retrofits.
Further, the study advocates for a unified electricity market that treats the whole country as a single dispatch region.
Its findings reinforce the Central Electricity Regulatory Commission’s (CERC) proposal to move away from bilateral scheduling of generation and focus on shifting to market-based economic dispatch (MBED).
Decommissioning identified assets will usher in new investments in a more balanced generation system that does not have the sword of surplus hanging over it.
A second independent study released today by the CEEW Centre for Energy Finance (CEF) separately examined 130 plants representing 95 GW of India’s coal-based capacity.
It found that decommissioning coal assets older than 25 years (35 GW of total capacity) on priority could result in annual savings of Rs 7,550 crore (USD 1.03 billion) over the next 5 years.
These savings would be generated through avoided annual capacity or fixed-charge payouts, primarily towards operation and maintenance costs.
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