After making a commitment in 2020 to build 32 gigawatts of renewable energy by 2032, the National Thermal Power Company (NTPC) and has doubled up on the same by raising it to 60 gigawatts. This means, if entirely solar, 60 GW of total capacity by 2032 would be approximately a fifth of India’s expected solar installations to that date.
According to Bloomberg, NTPC’s move raises questions about the future of India’s coal fleet. At the moment, solar is a pale shadow to India’s King Coal, which was about six times the installed capacity. However, the report says that the government projections and BloombergNEF analysis suggest that solar will overtake coal by the end of 2030. It projects that solar capacity will expand 700% in the next 10 years.
But analysts highlight that India’s coal fleet is big and describe its performance as uneven. They noted that its utilization rate is falling with fossil fuel-based power generation having declined in 2019 and 2020 respectively. However, the fleet of coal-fired plants kept growing. The report stated that operating hours or plant utilization fell due to declining total amount of power generation over an expanding fleet. NTPC and the other state-owned power generations have the highest utilization rates, which were still north of 60% last year. Privately owned plants were barely above 50%; state government-owned plants were well below 50%.
It pointed out that plants below 50% utilization are in a bad way, with essentially half the cash flow of a fully operating plant but the same fixed costs. As per analysis by BNEF, the power from newly-built solar capacity in India is now cheaper than the power from existing Indian gas and coal plants.
AK Gautam, Finance Director, said NTPC’s additional renewable energy commitments will not result in a change of its thermal fleet expansion plans. He said the company is waiting for a new committee under the country’s Central Electricity Authority to produce supply and demand projections. “Once that comes, it may be a year or so, we’ll look into our number and accordingly restructure it.”