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Indian Govt may cancel 50 GW coal-based power projects; additional 46 GW facing risk: S&P Global

   February 13, 2019        211        Ankush Kumar

New Delhi: The Indian government might cancel about 50 gigawatt (GW) of coal-based power projects in the near future, according to S&P Global Platts. An additional 46 GW coal-based capacity, currently under construction, is also at risk.

“Over the past couple of years, coal projects of over 37 GW have been deferred with another 13 GW delayed in India and most likely will be cancelled. About 46 GW of coal projects are currently under construction but their future is uncertain,” said Bruno Brunetti, power analyst, S&P Global Platts, that provides energy price benchmark assesments.

He also said solar power in auctions conducted in 2018 were as low as Rs 2.4 per kilowatt hour (kWh), equivalent to around $33.6 per megawatt hour (MWh). “This has placed coal newbuilds in a considerably more difficult position, especially given that the bottlenecks in the rail and infrastructure have led to fuel availability issues,” Brunetti said in an interview.

The elevated levels of imported coal prices witnessed over the past two years have also contributed in making coal less competitive as a fuel.

India currently has 13.8 GW of solar power under construction and 22.8 GW projects had already been tendered at the end of October 2018. “Therefore, it is likely solar installations will rebound. It is unclear the timing though – as the drivers behind the soft additions of 2018 may well persist and continue to impact additions in 2019,” Brunetti said.

Talking about the growth prospects for the solar power industry in 2019, he said that uncertainties related to safeguard duties and other taxes have been impacting solar’s growth but module prices have slumped 30 per cent recently and may offer support to the sector’s growth.

He also cautioned that there is a need for considerable investments to flow in the Indian power grid to allow solar power’s penetration to grow.

ET Energy World