Tamil Nadu’s state-owned electricity generation and distribution company, Tangedco, is open to reviewing the need for new coal-fired projects, if there is a clear trend showing that the cost of energy from ‘solar plus storage’ plants is lesser than that of coal.
“We are collecting data. If the trends show clearly that RE+storage is cost effective, the government may have to review new coal projects,” a senior official of Tangedco told BusinessLine.
Recent capacity auctions show the beginning of such a trend. In January, the government of India-owned SECI closed a tender to purchase electricity from RE+storage plants wherein the bidders could quote different prices for peak and non-peak time power supplies. In a jaw-dropping development, the weighted average tariff of the winning bidders came in at ₹4.04 (5.7 cents) a kWhr (Greenko, 900 MW) and ₹4.30 (6 cents) a kWhr (ReNew Power, 300 MW). In contrast, new coal-based projects cannot afford to sell power to utilities at less than ₹5 a kWhr.
Tangedco, a utility that is deeply in the red, with 2017-18 losses at ₹7,760 crore, is constructing five new coal-based power plants of total capacity of 5,700 MW; and it proposes to build seven more to add another 13,300 MW.
While there is no going back on the ongoing projects, they being in advanced stages of construction, the proposed seven could be reviewed, the official said. He, however, stressed that Tangedco would not rush to cancel the proposed power plants because it is “too premature” to take such a call. “At the moment, it is too big a risk to keep coal projects in abeyance, but we have an open mind,” he said.
For sure, Tangedco is not the only utility that is putting up coal-based power plants—utilities of several states have similar plans. After all, the cost of RE+storage power going so low is a recent development. Experts, such as Pranav Mehta, Chairman of National Solar Energy Federation of India, have been quick to point out that coal power is pricing itself out of the market.