Govt aims to cut power output from at least 81 coal-fired plants over 4 yrs

India plans to reduce power generation from least 81 coal-fired utilities over the next four years, the federal power ministry said in a letter, in an effort to replace expensive thermal generation with cheaper green energy sources.

The plan aims to maximize green energy potential and save costs, the letter sent to top energy department officials of state and federal government said, but will not involve shutting down old and expensive power plants. India has 173 coal-fired plants.

"The thermal power plants in future shall operate up to the technical minimum to accommodate cheaper renewable energy when it is available," the ministry said in the letter dated May 26.

India faced a crippling power crisis in April, when a rapid surge in power demand lead to a scramble for coal, forcing the country to roll back plans to cut thermal coal imports to zero.

An increase in peak power consumption during the night when solar power is not available has made phasing out coal-fired generation a big challenge. The addition of alternative sources such as nuclear and hydro power have also been slow.

India is the world's second largest consumer, producer and importer of coal, and the fuel accounts for nearly 75% of annual electricity generation.

The world's third largest greenhouse gas emitter is currently 37% short of its end-2022 green energy target.

India's current power crisis could have been averted if its target to install 175 GW in renewable energy had been on track, think tank Climate Risk Horizons said in a report in May.

"The additional generation from solar and wind ... would have allowed power plants to conserve their dwindling coal stocks for evening peak periods," Climate Risk Horizons said.

The power ministry's plan to reduce coal-fired generation when renewable sources are available could also ease pressure on logistics. India's power crisis has been made worse by a shortage of trains to move coal.

India expects the plan to reduce power generation by 58 billion kilowatt hours (kWh) from the 81 utilities to save 34.7 million tonnes of coal and cut carbon emissions by 60.2 million tonnes, the letter said.

(Reporting by Sudarshan Varadhan; Editing by Toby Chopra and Jane Merriman)