In a surprise move, Tata Power, one of India’s largest power producer, has announced that it will not build any new coal-fired power project in the future and majority of its power capacity expansion will happen through renewable energy.
This development was noted by the Institute of Energy Economics and Financial Analysis (IEEFA) in its report ‘Tata Power: Renewables to Power Growth.
This is a welcome departure from the idea which attempted to establish the fact that India needs an expansion of coal-fired power project to meet its s growing electricity demand.
Interestingly, the Central Electricity Authority (CEA) recently predicted that by FY 2021-22, coal’s share in the country’s energy mix would shrink to 26% while renewables would expand to 36%. Moreover, an increasing number of banks and other financial institutions are now saying no to financing coal-based projects.
The IEEFA report highlighted that in the first 11 months of FY2018- 19, only 20 MW (net) of thermal power was added, and in comparison, 6,740 MW of renewable energy was added over the same period.
“Thermal power at present makes up 70% of the company’s total capacity. This is, however, a product of Tata Power’s longer-term history prior to 2013 when renewable energy was still relatively expensive”, said the report.
A visible shift in Tata Power’s plans for its future is visible as it has added only 68 MW (net) since 2013. Over the same period, the company has added more than 2,000 MW of wind and solar power and 246 MW of hydropower. Therefore, 97% of all additions over this period was from non-thermal power additions.
As per Tata Power’s ‘Strategic Intent 2025’, it expects that 70% of new capacity additions will come from solar, wind and hydro sources by 2025.
The company has taken several measures to transition from thermal to renewable energy and fulfill its strategic intent. For example, Tata Power Delhi Distribution Limited (TPDDL), a power distribution company (DISCOM), is starting its ambitious project to install smart meters covering all its 1,600,000 consumers in Delhi.
Tata Power is also moving into electric vehicle charging and energy storage sector. It has signed a Memorandum of Understanding with Hindustan Petroleum Corporation Limited (HPCL), an Indian state-owned oil and natural gas company, for setting up commercial-scale charging stations for electric vehicles at the HPCL retail outlets and other locations across India.
Recently, AES, Mitsubishi, and Tata commissioned a 10 MW battery energy storage system in Delhi.