BENGALURU (Reuters) – India’s electricity ministry is proposing to allow coal-fired power plants to resume selling electricity after contracts with buyers expire, a letter seen by Reuters shows, despite national promises to shut down old power plants. pollution prevention.
The proposal, if approved, would help old coal-fired power plants generate additional revenue, increase liquidity in short-term electricity markets and help distribution companies in countries facing electricity shortages have cheaper energy, the ministry said in a draft proposal Friday.
“It is in the interest of consumers to keep the electricity tariff as low as possible,” said a letter sent to the power supply departments of Indian states and the heads of federal government-run utilities such as NTPC Ltd.
The move would allow federal power generators, such as the NTPC, to “sell electricity in any mode” once distribution companies pull out of a deal after their term expires, the ministry said.
Power Minister RK Singh and Finance Minister Nirmala Sitaraman had previously said they planned to close the old coal-fired power plants. The Ministry of Environment is also advocating for the closure of coal plants, which make up 80% of India’s industrial pollution, if they do not comply with green laws.
The outcome remains unclear. The energy ministry has asked for comments from states and heads of federally-run power generators. The final decision on the proposal is not close.
A senior electricity ministry official said on Sunday that only inefficient power plants would be shut down.
“Economical utilities that provide cheap energy will still be allowed to operate. “Small, inefficient plants will be closed,” the official said.
Distribution companies run by states such as Punjab, Delhi, Andhra Pradesh and Odisha want to hand over power allotted by federal government-run utilities after the plants are 25 years old, the electricity ministry said.
The states cited reasons such as the availability of surplus energy and the high cost of electricity as reasons for handing over power conferred on them under the treaties.
The list compiled by the Ministry of Energy in 2019 shows distribution companies that want to deliver energy produced by utilities with a capacity of 5.75 gigawatts.
Report by Sudarshan Varadan; Edited by William Mallard