At a time when renewable energy is considered better option than the conventional one and Delhi is grappling with poor quality air, the State-run THDCIL’s proposed Rs 12,676 crore Khurja coal power plant in Uttar Pradesh would not only be a financial burden but also add to the pollution in the region, a report by the US-based Institute for Energy Economics and Financial Analysis (IEEFA) said on Tuesday.
The researchers of the report “The Khurja Thermal Power Project: A Recipe for an Indian Stranded Asset” which was released here have called for re-evaluation of the 1,320 MW proposed project in the wake of changing technologies.
THDCIL, formerly known as Tehri Hydro Development Corporation Ltd, is a joint venture of the Central and Uttar Pradesh Governments with a 75:25 equity sharing ratio. While the first unit is scheduled to be commissioned in November 2022, the second unit would go on steam in April 2023. The electricity users — the State and Central Governments — and project’s lenders should not be burdened with yet another expensive stranded asset at a time when local residents need cleaner energy options, IEEFA Director of Energy Finance Studies Tim Buckley told reporters here.
“Delhi already has the dubious reputation of having the worst air pollution of any city in the world. If the Khurja coal plant is built as planned near Delhi, this will increase the impact on local residents, emergency workers and the local Government.
“The Khurja power plant was feasible when first proposed eight years ago in response to power supply shortages and outages across northern India, but technology has moved on,” he said.
According to Buckley, renewable energy generation in India is now cheaper than Khurja’s non-minemouth coal, with ongoing price declines prompting States, including Uttar Pradesh, to seek solar and wind options to meet incremental demand growth. “The Khurja proposal relies on a prohibitively expensive 900-km-long rail haul to bring coal to the plant. Additionally, the market price of coal continues to increase globally,” he said.
“Our analysis shows any power generated at the Khurja plant would likely be sold for Rs 5.67 per kilowatt hours, while renewable energy prices today are only plus or minus Rs 3 per kilowatt hours. The economics of the project look dim. The Khurja proposal must be re-evaluated,” Buckley said. Kashish Shah, IEEFA Energy Research Associate and co-author of the report, said “India is aiming to achieve 40 per cent of its electricity generation needs by 2030 from non-fossil fuel sources including wind and solar. As a coal-fired power station takes significant time to ramp up power generation, the Khurja power station cannot help with grid stabilisation and peak demands, one of the new requirements of the Paris commitments.”