The government’s planning arm, Niti Ayog, in a 2017 report estimated that the share of coal in India’s energy mix in 2040 to be around 44%.
This means coal, which is currently behind 72% of India’s electricity generation, has many more decades of bright future before it finally yields to renewables. While the country has shelved several hundreds of megawatts of power projects in pre-construction stages in the last some years, it currently has around 63GW of coal-fired projects in under-construction mode.
Discarding these projects will simply mean that close to $50 billion lent from public banks turning NPAs. And this is when lenders in the sector are already finding it difficult to restructure almost an equal amount in stranded assets.
So it looks highly improbable that India can afford to put the interests of public sector banks in jeopardy. More so in the aftermath of the pandemic that has redrawn priorities.
With a 7% growth forecast in electricity demand, India should ideally find it easier to meet the running expenses of the existing coal-fired plants than infusing huge capitals freshly in the much uncertain renewable sector, at least in the immediate future.
Source: Indoen Energy & Resources
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