- Coal India Ltd will build 3 GW solar power capacity by March 2024 in phases to cut its electricity bills and support its efforts to become a net zero company
- It will add this capacity in phases starting with 220 MW in FY 2022 and is also in talks with NTPC to purchase 140 MW solar under CPSU scheme
- The company plans to invest INR 56.5 billion on this capacity addition, with a mix of capital expenditure and through JVs
The world’s largest coal miner, Coal India Ltd (CIL) plans to build 3 GW solar power capacity by March 2024 in the form of 14 rooftop and ground mounted solar power plants, it announced in an official statement covered by media reports.This solar power will enable the Indian government owned coal mining company also to lower its annual power consumption bills to add to its bottomline at the end of the day, and also support its efforts to become a net zero energy company. For comparison, it shares that during FY 2020, its annual power consumption bills added up to INR 34 billion ($459 million), accounting for around 4.4% of its revenue expenses for the year.
The 3 GW capacity will be added in phases with 220 MW to come up in 2021-22, 1.293 GW in 2022-23 and 1.34 GW in 2023-24. Additionally, it is in talks with fellow state owned entity National Thermal Power Corporation (NTPC) to purchase 140 MW solar power under the central government backed Central Public Sector Enterprise (CPSU) Scheme (see IREDA Replaces SECI For CPSU Phase-II Solar Scheme).
For the initial 220 MW capacity, it has already identified land through subsidiaries. The coal giant entered a joint venture agreement with lignite mining company NLC India to develop 5 GW solar and thermal power generation in July 2020 (see 5 GW Solar & Thermal Project Partnership In India). Following this, it floated a joint venture called Coal Lignite Urja Vikas Private Limited earlier this month on November 10, 2020 to develop 1 GW solar power capacity.
CIL is also exploring solar power through joint ventures with the Solar Energy Corporation of India (SECI) and NTPC for 1 GW each, it informed.
It will invest INR 56.5 billion ($763 million) to realize this capacity addition, investing INR 36.5 billion ($493 million) as capital expenditure and the remaining amount will be raised through joint venture (JV) route.
In its 2018 strategy document titled Coal Vision 2030, CIL acknowledged that solar PV and energy storage technologies are casting serious doubts on the future of coal (see PV and Storage Threatening Coal’s Future In India).
Recently the Government of India decided to open up domestic commercial coal mining for the private sector and held the 1st auction but India Ratings & Research said it failed to attract interest from bidders due to the preference for clean energy compared to fossil fuels (see India PV Snippets: Airtel, AP, Textile, MNRE, Ind-Ra).