Govt to add up to 60 GW coal-based capacity in addition to 27 GW: R K Singh

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The government has decided to start work to have up to 60 GW of coal-based generation capacity in addition to the 27 GW already under construction, amid rising demand for electricity, according Union Power Minister R K Singh.

Singh held an interaction with stakeholders in the power sector here on Tuesday to review the thermal power capacity addition and facilitate the industry to overcome any problems.

"We have 27 GW under construction, and we had thought that we will add another 25 GW. But we have decided that we will start work on at least 55-60 GW of thermal capacity. As demand keeps accelerating, we will keep adding this capacity," Singh said at the meeting.

According to the projections of National Electricity Plan for 2022-32, the required coal- and lignite-based installed capacity will be 283 GW by 2031-2032 as against the present installed capacity of 214 GW, the power ministry said in a statement on Wednesday.

The minister shared the government's decision to add about 80 GW thermal power capacity by 2031-32 during the meeting.

Officers of power ministry, state governments, Central Electricity Authority, NTPC, REC, PFC, BHEL and other public sector enterprises participated in the meeting. Various industry participants, including those from independent power producers and vendors, were also present.

Singh said states must maintain availability of their thermal capacity and ensure any renovation, modernisation or life extension of thermal plants are done in time.

"If you do not maintain your thermal capacity and instead expect us to give power from central reserves, that is not going to happen. We will allocate additional power to those states which are maintaining and running their capacities," he said, adding that those who want to add capacities may do so.

"Power demand of the country has increased at an unprecedented rate due to rapid growth of the economy. India needs 24x7 availability of power, and we are not going to compromise on availability of power. This power cannot be achieved by renewable energy sources alone," he said.

According to him, since nuclear capacity cannot be added at a rapid pace, there is a need to add coal-based thermal capacity to meet energy needs.

"Given the power needs, the industry will keep getting orders for thermal capacity addition for the next 5-7 years. Thermal energy was written off a few years ago, which was premature. Thermal cannot be written off until energy storage becomes viable," he said.

The industry needs to ramp up thermal capacity, he added.

"Demand will continue to grow at a rapid pace. Prices in exchange are going to remain high. Those who add capacity will gain and those who don't will miss out on a golden opportunity," he stated.

Singh said the business environment in the power sector is excellent.

"We have put in place a payment security mechanism which does not have any parallel anywhere in the world. Payment is guaranteed within 75 days; current dues are 100 per cent up to date," he said, adding that even legacy dues are being paid.

Meanwhile, Engineering, Procurement and Construction (EPC) vendors, such as GE & L&T, voiced their concerns regarding the bidding process.

They were assured that their concerns shall be looked into, as per the statement.

Other equipment suppliers raised issues like shortage of credit in the market, bank guarantees, qualifying requirements and technical specifications, it stated.

"The country absolutely needs at least 80,000 MW of capacity addition from today till 2031-32, to meet our base load requirements. Non-solar-hours are going to be a serious challenge, in light of the growing power demand and considering weather events like what we faced in August this year," Union Power Secretary Pankaj Agarwal said.