Clean Energy Push: Time To Power Down Old Thermal Plants, Open Exit Route For Legacy PPAs


Clean Energy Push: Time To Power Down Old Thermal Plants, Open Exit Route For Legacy PPAs

As it inches towards the March 2022 target of 175 gigawatts (GW) of renewable energy (RE) capacity, India’s green push is blunted somewhat due to the feeble progress in addressing the damage on account of the country’s massive fleet of aging and inefficient coal- and lignite-fuelled thermal power plants. These are highly polluting in terms of carbon dioxide emissions, emitting CO2 in the range of 1.1-1.3 kg/kWh, as compared with only 0.82kg/kWh by modern supercritical thermal plants.

The irony of the newer, cost-efficient and lesser polluting supercritical thermal plants not getting customers or coal, even as inefficient, highly polluting and aging plants continue to sell costly power under the protection of long-term power purchase agreements (PPAs) to distribution companies (discoms), is hard to get away from. At the root of the problem is the fact that discoms are unable to exit from uneconomical PPAs signed decades ago with older, polluting generating stations. An exit option would relieve discoms from onerous financial liability and the funds thus released can be used by them to buy cheaper and more power, and supplying it to consumers at better rates. Read More…

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