Coal-based Power Capacity Requires Substantial Investment of ₹6.67 lakh Crore

The Government of India is strategically navigating a complex energy landscape, balancing the need for reliable power generation with its ambitious renewable energy targets. To meet the projected electricity demand of 283 GW by 2031-32, the government has outlined plans to augment coal-based capacity by an additional 80 GW, requiring a substantial investment of ₹6,67,200 crore.

This decision underscores the critical role of coal in meeting India’s base load power requirements, particularly in the short to medium term. However, the government is equally committed to accelerating the transition towards a cleaner energy mix. India’s ambitious target of achieving 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030 is a testament to this commitment.

To foster the growth of renewable energy, the government has implemented a series of policy measures, which mainly include:

• Permitting Foreign Direct Investment (FDI) up to 100% under the automatic route;
• Waiver of Inter-State Transmission System (ISTS) charges for inter-state sale of solar and wind power for projects to be commissioned by 30th June 2025.
• Declaration of trajectory for Renewable Purchase Obligation (RPO) up to the year 2029-30.
• Setting up of Ultra Mega Renewable Energy Parks to provide land and transmission connectivity to Renewable Energy developers for installation of RE projects at large scale;
• Schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), Solar Rooftop Phase II, 12,000 MW CPSU Scheme Phase II;
• Laying of new transmission lines and creating new substation capacity under the Green Energy Corridor Scheme for evacuation of renewable power.

Simultaneously, the government is taking steps to mitigate the environmental impact of coal-based power plants. Stringent emission norms have been enforced, and the promotion of supercritical and ultra-supercritical units is being encouraged. Furthermore, the policy on biomass co-firing aims to reduce carbon emissions while providing an additional income source for farmers.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.