Gujarat Cancelling 4 Gigawatt Coal Power Plant As India Moves Away From Coal

May 16th, 2017 by Joshua S Hill

The government of Indian state Gujarat has cancelled a proposed 4 gigawatt coal power ultra-mega power project due to existing surplus generation capacity and a desire to transition from fossil fuel–based energy sources to renewable power.

Reports from India’s Business Standard earlier this month reported that the government of Gujarat, under Chief Minister Vijay Rupani, has cancelled a proposal for creating a new 4,000 megawatt (MW) ultra mega coal power project that was to be developed by the Gujarat State Electricity Corporation. Specifically, the reasoning given for cancelling the project was the already substantial installed capacity — around 30,000 MW — of old and renewable energy in the state, with the government adding that building a new conventional coal power plant simply did not make sense.

The move falls well in line with moves across India to decrease its reliance upon coal, and further gives lie to claims from Australian politicians that India is in desperate need of more coal.

The past few years have been important for India’s energy mix, with the country making significant and at times monumental moves away from reliance upon fossil fuel energy. Only a few weeks ago it was reported that India had installed more renewable energy capacity over the last financial year than it did thermal power capacity, an impressive achievement for a country which is technically an emerging economy, and one with a massive population.

India is primarily focusing on installing massive amounts of solar power, and a report from November last year outlined how India is planning to build 1 terawatt of solar power — which sounds absurd, but given the amount of solar India has already installed, might not seem as insane as at first reading. Further, India-based consultancy Mercom Capital predicts that 10 GW of new solar capacity will be installed in India in 2017 alone.

Paralleling this focus on solar capacity additions is a similarly strong desire to reduce the amount of coal the country uses. Not only is the country focusing more on renewable energy projects, but reports over the last 6 months have revealed that the country is similarly reducing its focus on coal. Earlier this year numerous Indian newspapers reported that Indian coal imports declined by 21.7% in January. This follows official word from the Indian government in September of last year saying that they intended to end dependency on coal imports to use up the oversupply of coal at home.

Further, the sheer number of planned coal plants are also experiencing decline in India. In August of last year, a report published by the Institute for Energy Economics & Financial Analysis (IEEFA) showed that the country was intending to move forward on developing several coal-fired ultra mega power plants, despite the fact that it was unlikely that India actually needed any more capacity. Fast forward to March of this year and a new report showed that the total number of coal plants globally under development plummeted in 2016, with at least 68 GW of coal construction frozen at over 100 project sites in China and India alone. It appears that a Greenpeace report that 94% of India’s planned coal capacity would be lying idle in 2022 might have got through to some of India’s leaders.

All of this plays into recent news that plans by Indian multinational Adani Group to build a massive coal mine in northeast Australia are essentially useless. An analysis again conducted by the IEEFA showed that not only will Adani itself not be able to contribute much in the way of financing to build the project due to its own financial straits — leaving the cost of building the project up to the Australian taxpayer — but there is no real demand for Australian coal in India in the first place.

This also gives lie to the words of deputy Australian Prime Minister Barnaby Joyce, who believes Australia has a “moral obligation” to provide coal to poorer nations such as India and a responsibility to bring dignity to Indians who want electricity.











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