CPSEs Accelerate Thermal Capacity Near Mines

 In response to the surging power demand in India, growing at a rate of six to seven percent per annum, Central Public Sector Enterprises (CPSEs) in the power sector have been directed to prioritize the establishment of thermal power plants (TPPs) near coal mines. A strategic plan, formulated after a meeting in the Prime Minister’s Office (PMO) in June last year, emphasizes collaboration with Indian Railways to invest in coal logistics initiatives.

The overarching goal of this strategy is to meet the increasing power demand, especially from the commercial and industrial (C&I) sector and households. Projections indicate a peak power demand expected to reach 366 gigawatts (GW) by 2032, up from 243 GW in 2023. To address this, the central government aims to add a total of 80 GW of thermal capacity by FY32. While 25-30 GW of TPP capacity is already under construction, an additional 50-55 GW needs to be added to enhance the power transmission network, especially in the context of growing renewable energy penetration.

As reported by JM Financial, around 2,754 megawatts (MW) of thermal capacity was added during April-December FY24, and an estimated 6-8 GW capacity is expected to be commissioned by March 2024. A sectoral review presentation by the Power Ministry in the PMO involved key figures such as Power Minister R K Singh, Power Secretary Alok Kumar, Principal Secretary to the PM, Adviser to PM, Cabinet Secretary, NITI Aayog CEO, and Finance Secretary.

Decisions made during the meeting included the necessity to establish TPPs near coal mine pit heads, invest in coal logistics, and expedite the installation of smart meters. It was agreed that all upcoming thermal power capacity should be located in proximity to coal sources, and states deviating from this guideline would be subject to immediate review.

The meeting stressed the need to expedite the awarding of planned TPPs under a mission mode, with a focus on situating them near coal mines. Power sector CPSEs were encouraged to invest in the development of coal transportation logistics, with recommendations for an appropriate freight rebate arrangement with Railways.

While the Coal Ministry collaborates with Railways to set up 35 crucial rail lines for coal evacuation from Odisha, Jharkhand, and Chhattisgarh, the involvement of power sector CPSEs in these projects remains uncertain.

News by Rahul Yelligetti