Advocates of an expansion of Australian coal mining are constantly claiming that India is desperate for imported coal to supply urgently needed electricity. Leaving aside the Indian government’s stated determination to end coal imports in the next few years (at least for the large public sector), what’s happening to actual demand for coal-fired electricity. Undoubtedly, it was growing very rapidly until quite recently. The Indian government had grandiose plans for a fleet of “Ultra Mega” power plants UMPP, a couple of which actually got built. And state governments were tendering out large contracts to supply electricity, designed with coal-fired power stations in mind.
In the last few weeks, there have been two big developments. Following a string of other cancellations, the government of Gujarat has cancelled a proposed UMPP Key quote
The new decision is believed to be also in line with the Centre’s push to bring down coal import. However, the state government is willing to provide land for a UMPP if the central government wishes to initiate one, says Sapariya. Adding: “Our focus is now on renewable energy. The government will encourage solar power.”
Meanwhile, the government of Uttar Pradesh has cancelled bids conducted in 2016 to procure 3,800 MW of power from independent power producers. Adani was among the suppliers shortlisted to share in the supply contract. This isn’t an isolated event
The UP government’s move, analysts said, is symptomatic of the deeper malaise: On the one hand, hardly any power purchase agreements (PPAs) are being signed and now, the bids for new contracts are being cancelled; on the other, plans to set up large thermal power plants are either being put in abeyance or abandoned. The Gujarat government, for instance, recently dropped the plan to set up a 4,000 MW imported coal-based ultra mega power project at Gir Somnath district, apparently because it thinks that upcoming renewable energy units could meet the the power requirement.
About 33,000 MW of thermal power plants, with an approximate investment of about Rs 2 lakh crore, are left stranded across the country due to the lack of PPAs.
That’s nearly 8 GW gone in the space of a few weeks. By my calculation (a check would be much appreciated) a 1 GW thermal coal station operating at 70 per cent capacity uses about 3 million tonnes of coal a year. Multiply that by 8 and you get 24 million tonnes, the entire projected output of Adani’s first stage project.