By Sethuraman N R
(Reuters) – India on Wednesday changed rules to allow long-term coal supply contracts for so-called independent power producers as it looks to ramp up its coal-powered plant capacity.
The government also did away with the requirement that coal power producers should have power purchase agreements to sell electricity.
The moves will encourage power producers to plan new thermal capacities and help future capacity addition, the coal ministry said in a statement.
India wants more power plants to come up at the pitheads of coal mines as it would reduce the challenges in transporting coal to distant and remote places where power plants are often located.
Under the new policy, which was approved by the cabinet on Wednesday, independent power producers with or without power purchase agreements can get coal on an auction basis for a period of up to 12 months or above and up to 25 years by paying a premium above the notified price.
India aims to raise its coal-fired capacity by 80 gigawatts by 2031–32, from the current 222 GW, to meet growing demand for power.
The country had added nearly 28 GW of coal capacity in the past five years, according to Central Electricity Authority data.
The coal power additions come even as the country is aiming to add at least 500 GW of clean energy by 2030, against 172 GW currently.
India’s renewable energy sector is grappling with several obstacles, including weak demand for tenders, land acquisition challenges, delays in power purchase agreements, and project cancellations.
(Reporting by Sethuraman NR; Editing by Mrigank Dhaniwala)
