IEEFA report: Proposed Khurja coal power plant outdated, uncompetitive, and polluting Delhi
IEEFA report: Proposed Khurja coal power plant outdated, uncompetitive, and polluting Delhi
IEEFA report: Proposed Khurja coal power plant outdated, uncompetitive, and polluting Delhi
New Delhi, 23 Oct 2018: A report published today by the Institute for Energy Economics and Financial Analysis (IEEFA) evaluating Tehri Hydro Development Corporation (THDC)’s proposed Khurja coal power plant in India finds the plant will push up the cost of electricity and increase air pollution in the nearby capital Delhi at a time when the country’s renewable energy options are cheaper, accessible and more sustainable.
Released at an energy roundtable in Delhi this morning, the report recommends the Khurja proposal be re-evaluated against severe air pollution levels in Delhi, the real threat of government financing wasted on another expensive stranded asset, increasingly cheaper renewable energy options, and India’s ambitious sustainable energy goals.
Tim Buckley, Director of Energy Finance Studies IEEFA says electricity users, the state and central government, and project’s lenders should not be burdened with yet another expensive stranded asset at a time when local residents need cleaner energy options.
“Delhi already has the dubious reputation of having the worst air pollution of any city in the world. If the Khurja coal plant is built as planned near Delhi, this will increase the impact on local residents, emergency workers and the local government.
“The Khurja power plant was feasible when first proposed 8 years ago in response to power supply shortages and outages across northern India, but technology has moved on.
“Renewable energy generation in India is now cheaper than Khurja’s non-minemouth coal, with ongoing price declines prompting states, including Uttar Pradesh, to seek solar and wind options to meet incremental demand growth.
“The Khurja proposal relies on a prohibitively expensive 900km long rail haul to bring coal to the plant. Additionally, the market price of coal continues to increase globally.
“Our analysis shows any power generated at the Khurja plant would likely be sold for Rs5.67/kilowatt hours, while renewable energy prices today are only +/- Rs3/kilowatt hours.
“The economics of the project look dim. The Khurja proposal must be re-evaluated.”
Kashish Shah, IEEFA Energy Research Associate and co-author of the report says India’s ambition to sustain double digit economic growth hinges on improving energy security and reducing the cost of power, and that requires sensible investment.
“India is aiming to achieve 40% of its electricity generation needs by 2030 from non-fossil fuel sources including wind and solar. As a coal-fired power station takes significant time to ramp up power generation, the Khurja power station cannot help with grid stabilisation and peak demands, one of the new requirements of the Paris commitments.
“As the share of renewable energy options increase, India will need additional firming capacity and wider national grid inter-connectivity to integrate increasing amounts of variable solar and wind generation, and prevent frequency and voltage fluctuations that adversely affect grid stability.
“Most of the state’s incremental electricity demand will be met by cheaper, cleaner renewable energy capacity over the next ten years, not through an overpriced, outdated, and uncompetitive monolith like the Khurja plant.
“The Khurja power project does not tick any boxes.
“Like the raft of previous thermal power plants now in financial distress, Khurja will likely add to Power Finance Corporation’s Rs31,000 crore of stranded assets, and has been doggedly hampered by numerous legal and environmental challenges still before the courts.
“In our view, diversifying into the non-minemouth coal-fired power sector is entirely outside TDHC’s core expertise and a highly risky proposition no longer aligned with the Government of India’s energy sector plan.
“A pumped hydro storage project would far better align with India’s world leading electricity sector transformation.
“The long delayed, excessively expensive and redundant Khurja project should be cancelled before it becomes another expensive stranded asset in India.”
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