New thermal power plants must generate renewable energy: Centre

CHENNAI: Amid Tangedco's opposition to the Union Power Ministry’s proposal to replace part of an existing thermal generation with solar generation, the Centre has now come out with a plan to make it mandatory for thermal power producers to build or purchase renewable energy if they set up a new or expand coal-based power generation after April 1, 2024.

The ministry has proposed amendments to the Tariff Policy 2016 to include the provision of a ‘renewable generation obligation (RGO) ’ to enhance the generation and utilisation of renewable energy in the country.

“In order to promote renewable energy sources, any generating company proposing to establish a coal/lignite based thermal generation station after a specified date shall be required to establish such renewable energy generating capacity or procure and supply renewable energy equivalent to such capacity, as may be prescribed by the Central Government from time to time after due consultation with stakeholders,” said a note by the ministry dated November 9.

The ministry has invited stakeholders' views on the draft proposal to be submitted within 21 days from the date of notification.

It has proposed that after April 2024 any new thermal power capacity would need to be built or procure a minimum of 25 per cent of the coal-based generation capacity being built. The note said the renewable energy produced by each generator “may be bundled with its thermal generation for the purpose of sale.”

In case, a thermal power entity procures this renewable power, then the State Electricity Regulatory Commission will consider it under the Renewable Purchase Obligation (RPO), it said.

The Union Ministry’s move is part of the country’s ambitious target of meeting 50 per cent of electricity demand coming from non-fossil fuel sources by 2030.

This move is likely to impact Tangedco which has a massive thermal expansion plan of 8,340 MW. The state utility has five thermal projects with a total generation capacity of 5,700 MW. Another 2,640 MW thermal power projects are under the pipeline.

In April this year, the power ministry notified a scheme for flexibility in power generation through bundling thermal and hydro with solar and wind power. It allowed conventional power generators to set up renewable capacity at their units and sell at average rates. Tangedco, however, opposed the flexibility plan stating that the trajectory for the replacement of thermal power with renewable energy will have huge cost implications for Tangedco and other distribution companies and will result in a huge idle investment.

Among the State’s power generating stations, the thermal plants at Mettur, North Chennai and Tuticorin have been identified for substitution. A capacity of 1,045 million units has been identified from these plants to be replaced with solar power of 542 MW, according to Tangedco.