India may need up to 27 GW new coal-based power plants till FY32

New Delhi: Coal will continue to dominate India’s power landscape, despite the country’s push for renewable energy. The plan anticipates an additional need for 19-27 gigawatts (GW) of coal-based power till FY2032, supplementing the under-construction capacity of 26.9 GW.

Investments of ₹2.18 trillion and ₹1.85 trillion are projected for the setting up of thermal power plants during FY22-27 and FY27-32 respectively, according to the plan notified by the Central Electricity Authority (CEA). This reliance on coal indicates thermal power’s pivotal role in India’s electricity infrastructure, even as the nation strives to achieve its ambitious clean energy objectives.

The report said India is on track to meet its target of 500 GW non-fossil fuel installed capacity by 2029-30. These projections are particularly crucial as India’s electricity demand grows around 10% annually, with a peak coal demand forecast between 2030 and 2035.

It further said that the projected all India peak electricity demand and electrical energy requirement is 277.2 GW and 1907.8 BU (billion units) for the year 2026-27 and 366.4 GW and 2473.8 BU for the year 2031-32 respectively. This year, the peak demand has touched a record high of 221 GW.

In terms of overall investments to meet the required power demand through several sources, it has estimated a required investment of ₹33.6 trillion in the country’s power sector including both conventional and renewable energy capacity till FY32.

For the period of FY22-27, the electricty plan has has envisaged a total capacity addition of 31.880 GW from conventional sources including coal, gas and nuclear and 179.939 GW from renewable energy sources such as hydro, pumped storage plants, solar, wind and biomass with 8680MW/34720 MWh of battery energy storage system (BESS). Simarly, from FY28 to FY32, the a total of 291.802 GW, consisting of 32.080 GW from conventional energy sources, 259.722 GW of renewable energy sources and 38,564 MW/201500 MWh of BESS.

On the sources for the required funds, the plan said that during the five years ending FY27, developers will be required to infuse equity amount totalling to ₹3,63,547 crores. Further, they will have to arrange for total debt of ₹10,90,641 crores, it said.

Similarly, the equity and debt requirement for the period FY27-32 have been estimated as ₹4,76,602 crores and ₹14,29,805 crores respectively. It noted that the equity can be arranged from surplus generated from operations, initial public offerings by listing in markets, follow on public issues, convertible debentures and monetization of operational assets.

As per NITI Aayog estimates, funds availability for power sector from National Monetization Pipeline is estimated to be ₹85,032 crore over 2022-25.