Overemphasis on renewable energy would result in reducing viability of coal-fired thermal power plants in India: CEA
Overemphasis on renewable energy would result in reducing
viability of coal-fired thermal power plants in India, adding to the massive
non-performing assets (NPAs) of state-run lenders, Chief Economic Adviser (CEA)
Arvind Subramanian said on Thursday.
"Rapid changes in technology are promising to help
realize the promise of renewables, which is an eminently desirable development.
At the same time, these changes need to be seen in the context of India's
current economic situation and its enormous endowments of coal, which is still
a very cheap way of providing energy to hundreds of millions who are still
energy-deprived," he said at the 16th Darbari Seth Memorial Lecture here
organised by The Energy and Resources Institute (TERI).
Noting that both coal and renewable sources should be the
focus of power generation, Subramanian said that "for India today, the
social cost of renewables is higher than that of thermal power, and it is
highly unlikely for the converse to be true, at least for some time".
"Over-expansion, fuelled by the growth optimism of the
mid-2000s, combined with stresses in the discoms and slowdown in the economy
has led to a plummeting plant load factors, declining profitability, the
spectre of large amounts of stranded power assets, and consequentially stranded
coal assets as well.
"All this can have a detrimental effect on the health
of the banking sector, especially the public sector banks, in the country,
which in turn can adversely impact the health of the Indian economy, already
afflicted by the 'twin balance sheet' challenge," the CEA said.
The declining viability of thermal power plants and the
rising NPAs of state-run banks, which have lent to power companies "seems
a double whammy for the government," he said.
For India, which is struggling to provide basic electricity
to about 25 per cent of its population, coal will provide about 60 per cent of
the country's power needs until 2030, he added
India's total renewable generation capacity has crossed 57
gigawatts (GW), with an increase of 24.5 per cent being registered in the last
fiscal year. The capacity addition in solar energy last year stood at 81 per
cent.
Source:--IANS
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