Indian electricity giant NTPC Ltd. to expand its coal-fired power fleet with its first new project in six years, a policy shift that reflects concern about the country’s deepening energy crisis.
New Delhi-based NTPC will this month award a contract to build a 1,320-megawatt plant in Odisha, according to a company official familiar with the plans.
The official, who requested anonymity, said the company would also consider awarding contracts for two previously stalled expansion projects at the Lara and Singruli sites in central India.
NTPC did not immediately respond to an emailed request for comment on Tuesday, which is a public holiday in India.
Several states across India are suffering from prolonged power outages as scorching heat waves boost energy demand at a time when coal stocks are dwindling and nations globally struggle with tight fuel markets. Blackouts last up to eight hours a day in some areas.
NTPC had previously slowed its plans to move forward on the Lara and Singrauli projects as electricity demand faltered during the pandemic. The producer was also focused on proposals to increase renewable energy capacity, rather than coal.
Despite the near-term addition to its coal fleet, the company will stick to the goal of rapidly expanding its clean energy capacity, the official said. NTPC aims to halve the share of fossil fuels in its energy mix by 2032 from 83% currently.
NTPC’s plans for the Odisha plant show how India, which still relies on coal for about 70% of its electricity generation, can use fossil fuels more efficiently, according to R. Srikanth, a professor of energy and climate at the National Institute for Advanced Studies in Bengaluru.
“One way to do this is to phase out all the old power plants and replace them with modern plants that consume less coal to produce the same amount of energy,” Srikanth said. “We need to stop defaming coal.”
The new NTPC facility will replace a smaller plant on the same site that was retired last year after more than five decades.
The producer is also taking steps to tackle the coal shortage that has led to India’s energy crisis. Imports will be increased to 20 million tons during the fiscal year to March, while NTPC aims to increase annual production at its mines by about 86% to 26 million tons.
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