NEW DELHI (Reuters) - NTPC plans to invest $10 billion in new coal-fired power stations over the next five years despite the electricity regulator’s assessment that thermal plants now under construction will be able to meet demand until 2027.
In the first phase, India’s biggest power producer, NTPC, plans to build three new plants with a combined capacity of more than 5 gigawatts (GW), nearly double the capacity of those currently being phased out, five senior company officials said.
The company has not made the investment public because it has not yet received government approval.
If approved, the plan could set back efforts by the world’s third-largest greenhouse gas emitter to control carbon output and raise questions about Prime Minister Narendra Modi’s vow to stand by commitments under the Paris climate accord.
The proposal also comes as several coal-fired stations built in the last power boom a decade ago are standing idle due to softer-than-expected demand. State-controlled Coal India is struggling to sell its stockpile as a result.
But other indicators indicate demand will pick up, a top NTPC executive said, asking not to be named because the plan had not yet been announced.
“I don’t think (the current) electricity surplus will be there for a long time,” he told Reuters. “We should not fool ourselves.”
More than 300 million of India’s 1.3 billion people are still not hooked up to the grid, according to NITI Aayog, which makes policy recommendations to the government.
As connections improve, the panel reckons, the country’s per-capita power consumption could jump around a third to up to 2,924 kilowatt-hours by 2040 from 2012 levels.
In the next decade, the around 50 GW of capacity from thermal plants due to come online by 2022 will meet demand, the Central Electricity Authority (CEA) said. Additional supplies will come from sources such as solar and wind, it said.
Asked about NTPC’s plan, CEA chairman RK Verma said the commercial decisions of the company were its own affair.
“NTPC is a commercial organization and they must be having their own commercial considerations,” Verma said.
For its part, a spokesperson at NTPC would say only: “NTPC takes decisions after consulting both the CEA and the ministry of power.”