Coal as a fuel for power generation is as important as renewable sources as it is essential to maintain India's base load, ETEnergyWorld reported, citing power, coal, renewable energy and mines minister Piyush Goyal.
He said the government is, however, working to make coal a cleaner fuel by replacing old plants with newer ones. Goyal said without a base load of coal-based capacity, it would be difficult to add anymore renewable capacity.
Base load is ideally the power that could be provided to consumers when energy from renewable sources cannot be generated. There could be instances of no sunlight in case of solar or lesser wind speed for wind power plants. During those times, coal can provide continuous supply of electricity as it is not linked to any external forces.
Goyal said he has already asked companies such as NTPC Ltd to replace its power plants of total capacity of 11,000 MW which are older than 25 years.
He added in doing so, the companies will not have any major but a nominal impact on their capital expenditures if old power plants are replaced.
"Power companies will not incur more than Rs 4,000 crore per MW if they replace old plants," Goyal said.
On concerns over falling plant load factors of power plants, especially that of coal-fired projects, Goyal said it was due to energy conservation and energy efficiency measures of the government. The minister said India's power demand was increasing at a 6% compounded annual growth rate.
(Writing by Jessie Jia Editing by Harry Huo)
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