The Report on Optimal Generation Capacity Mix for 2029-30

May 8, 2023

India’s Power Ministry recently released a report on the optimal generation capacity mix for 2029-30. According to the report, the per MW cost of putting up a new coal-fired thermal power plant is ₹8.34 crore. This figure is based on the latest inputs provided by various manufacturers and developers. The report also revealed that India is planning to build 26,900 MW of coal power plants between now and 2030, which would result in a bill of ₹2.25-lakh crore or ₹32,050 crore per year.

Costly and Harmful Coal Power

Despite being a significant part of India’s energy mix, coal power is both costly and harmful to the planet. The report states that India’s annual carbon dioxide emissions from the power sector will rise from 910 million tons today to 1.11 billion tons in 2030, thanks to coal-based plants.

Per-kWhr Cost of Electricity from Coal-fired Plants

While the cost of electricity from coal-fired plants varies based on several factors, industry sources say that the cost of new coal power is never less than ₹6 a kWhr. With the per MW cost of ₹8.34 crore, the cost is set to increase.

Renewable Energy is Cheaper

Renewable energy plus storage is a cheaper alternative to coal power. For instance, Greenko has contracted to sell power from its upcoming pumped hydro storage at Kurnool, Andhra Pradesh, for ₹4.23 a kWhr. The Optimal Capacity Mix report indicates that 11,460 MW of pumped hydro storage capacity has been concurred by the Central Electricity Authority. At present, 4,746 MW of pumped hydro storage capacity exists in India, and another 2,780 MW, including Greenko’s 1,680 MW, are under construction.

Future of Coal Power

Despite the cheaper cost of renewable energy plus storage, the report states that India would need a further 16,204 MW of coal-based power capacity by 2029-30. While the per MW cost of coal power has risen over the years, pumped hydro storage capacity is increasing, and the cost of renewable energy is decreasing. However, coal power remains a significant part of India’s energy mix for the time being.

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