Decommissioning coal power plants older than 25 years can save Rs 37,000 crore: CEEW-CEF Study

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.

Another study by CEEW suggested that power distribution utilities or discoms in India could save up to Rs 9,000 crore each year by prioritising coal power despatch based on efficiency rather than the prevailing system which prioritises based on variable costs.

According to the study released by CEEW, this move can provide much needed respite to public discoms, which last reported a loss of Rs 61,360 crore 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.

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 on account of avoided pollution control retrofits.

The CEEW-CEF study does not endorse large-scale decommissioning, it found that retiring 95 GW of capacity could cost between Rs 2.3 lakh crore and 3.5 lakh crore to pay off debt and equity holders. Once unlocked, these resources could be made available for India’s transition to renewables. The CEEW is one of Asia’s leading not-for-profit policy research institutions.

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