Coal plant decommissioning can help save Rs 37,750 cr: CEEW report

A study conducted by the Council on Energy, Environment, and Water (CEEW) revealed that decommissioning coal power plants older than 25 years could result in total savings of Rs 37,750 crore. According to the study, power distribution utilities, or discoms, in India could save up to Rs 9,000 crore per year by prioritising coal power dispatch based on efficiency instead of the current system, which prioritises based on variable costs. The study cites that this move will provide much-needed relief to public utilities, which had a loss of Rs 61,360 crore in FY19. The conclusions are on the basis of the performance of 194 GW of Indian coal assets (out of nearly 205 GW total capacity) in the 30 months preceding the Covid-19 outbreak. Further added that prioritising efficiency-based dispatch during this period could have increased coal fleet efficiency by 1.9%, resulting in annual coal savings of 42 million tonnes (mt) and a corresponding reduction in greenhouse gas emissions. The CEEW study suggests 30 GW of power generation capacity be considered for accelerated decommissioning. The proposed plants are similar to those designated for retirement in the 2018 National Electricity Plan (NEP). It also suggests temporarily decommissioning another 20 GW of new capacity that is not given in the NEP list. Further added that relegating these inefficient plants would end in a one-time savings of Rs 10,000 crore because of avoided pollution control retrofits. Its findings support the recommendation of the Central Electricity Regulatory Commission (CERC) to shift away from bilateral generation scheduling towards a market-based economic dispatch (MBED). Another study by the CEEW Centre for Energy Finance (CEF) studied 130 plants, accounting for 95 GW of coal-fired capacity in India. It discovered that prioritising the decommissioning of coal assets older than 25 years could save Rs 7,550 crore every year for the next five years. The savings would come from avoiding annual capacity or fixed-charge payouts, primarily for operation and maintenance. Over the life of the plant, the savings would total Rs 37,750 crore. Image Source Also read: Tata Power plans to become carbon neutral by 2050