Nagpur: State-owned Koradi Thermal Power Station (KTPS) is among the country’s 12 non-performing assets in thermal power sector, reveals latest analysis by the Institute for Energy Economics and Financial Analysis (IEEFA). Apart from Koradi, another plant in the state which has been listed among the 12 is Nashik-based Sinnar Thermal Power Plant.
The other plants are in Uttar Pradesh, Madhya Pradesh, Jharkhand, Chhattisgarh, Gujarat, Karnataka and Tamil Nadu. Pointing at questionable economics behind the plant’s investment proposals, the analysis stated that the state power company Mahagenco was missing an opportunity to match shutdowns of coal units with a clean energy buildout.
The report ‘Seriously stressed and stranded’ was released on Wednesday by IEEFA — a US-based independent organization which conducts research and analyses on economic issues related to energy and environment. Last year, India’s Parliamentary Standing Committee on Energy had listed around 34 stranded assets in the thermal power sector. Highlighting the possibility of the committee underestimating the true number of stranded assets, the IEEFA report stated that the $40-60 billion of stranded Indian thermal power assets are placing stress on a troubled banking sector and undermining the flow of capital which is critical to sustain strong Indian economic growth and a renewable energy future.
At Koradi power plant, two new units of a total capacity of 1,320 megawatt have got an in-principle approval to replace retiring units of around 1250MW. Stressing that Mahagenco is increasing its coal-power capacity in doing so, the analysis reveals that the power plant operated at a plant load factor of 42.55% between April to August this year.
PLF is the actual power generation out of the total installed capacity and indicates a plant’s performance. “There appears to be plenty of additional generation available in the current coal fleet to meet growing power demand. New units are not needed,” the report stated.
It further pointed out that the expansion of units was approved despite non-installation of flue-gas desulphurisation — a technology for controlling sulphur dioxide emissions from thermal plants.
Global analysts further raised another economic concern. The coal for the new units will be transported from a mine in Chhattisgarh. According to the report, railing coal over hundreds of kilometres will increase the cost of power generation. “The distance between Koradi plant and its coal supply further reduces the viability of proposed extension. It also exposes the plant to logistical issues like monsoon affecting coal transportation, wet coal etc which leads to reduced power output,” it added.
Not just this, the Koradi extension project might become an example of a coal-fired plant stranded by air pollution concerns. “Washed coal is not available due to corruption issues. Air pollution represents a regulatory and financial risk to any proposed coal-fired plant in India,” the report stated, advising that Mahagenco should replace the old units with renewable energy.
Stating that power distribution companies are also struggling under massive debt to the industry, lead author of the report and director of energy finance studies, IEEFA, Tim Buckley said, “Although there have been a number of initiatives by government and the Reserve Bank of India to resolve the massive financial distress at many thermal power plants across India, the problems remain unresolved. Instead of building uncompetitive and expensive coal-based thermal power plants, investments should be made in wind and solar-based power systems as well as flexible gas-based peaker plants,” he added.
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