Rs 5,650 crore solar push at centre of CIL’s net-zero ambition – Times of India

NEW DELHI: Coal India Ltd, the world’s biggest coal miner and India’s single-largest greenhouse gas emitter, has become the latest Indian entity to enter the renewables covenant by pledging Rs 5,650 crore for building 3,000 MW (megawatt) of solar power projects as part of a plan to become net-zero energy company by 2023-24.
The state-run behemoth’s solar foray is part of the Narendra Modi government’s larger strategy for meeting – rather exceeding – the commitment made at the Paris climate meet, or COP-21, to reduce India’s carbon footprint.
A dataset released by US-based Climate Accountability Institute in December 2019 ranked Coal India eighth among the top 20 companies responsible for global carbon emissions from 1965-2017.
A million unit (MU) of solar power generation brings down Co2 emissions by a little over 700 tonnes. By this calculation, reducing the economy’s carbon footprint without hitting growth is a big challenge. Roughly 55% of electricity in the country comes from coal-fired power stations, even though renewables now account for a quarter of the 3,73,436 MW installed capacity.
But things are slowly changing, albeit with a gentle nudge from the government, as big coal burners are cleaning up their acts. An example is the country’s largest generation utility NTPC. The coal burner is pursuing renewables aggressively, with a target of building 10,000 MW of solar capacity at an investment of Rs 50,000 crore by 2022. Other power producers such as the Adani and Tata groups too charted a green course.
For Coal India, the solar foray makes sound business sense. It will allow monetisation of the company’s idle land bank at mine sites, a plan TOI had first reported on August 11. In addition, the projects will reduce the company’s annual power bill of Rs 3,400 crore, accounting for more than 4% of revenue expense in 2019-20.
According to the broad contour of the plan outlined to the bourses on Monday, CIL will set up 14 projects in both rooftop and ground-mounted category. The company will invest Rs 3,650 crore as part of its capital expenditure till 2023-24. The rest of the investment will come from joint venture partners.
CIL’s subsidiaries have identified 1,156 acres of land for building 220 MW solar capacity by the end of 2022. The roadmap shows a modest start with 10 MW solar capacity during the current fiscal and a peak of 1,340 MW in 2023-24. For 2022-23 and 2023-24, CIL plans to set up solar projects across India.
Parallelly, the company is in discussion with NTPC to buy 140 MW solar power under a Central scheme for public sector entities. Cumulatively, it adds up to little over 3,000 MW by FY’24.
CIL has formed a joint venture with NLC (Neyveli Lignite Corporation), called Coal Lignite Urja Vikas Pvt Ltd, to synergise resources. This venture has a target to set up 1,000 MW solar project.
It has also tied up with state-run generation utility NTPC and inked an MoU with SECI (formerly Solar Energy Corporation of India) for solar projects of 1,000 MW each.
CIL subsidiaries generated 4.6 mus (million units) during 2019-20 and 4.25 mus in 2018-19. This amounts to a reduction of over 3,000 tonnes of carbon dioxide emissions each year.