Why Coal India is building solar plants

The largest domestic coal producer in India, Coal India, has decided to go solar in a big way. The company announced setting up of 20 GW of solar power over the next decade. The plan will require 40,000 hectares of land and an investment of up to INR 100,000 crores (given that INR 4-5 crores are required for 1 MW of solar installation). The company did not elaborate on further investment plans.

The government-run coal company has finally realized that it needs to solarize in order to be sustainable in the coming decades. Coal India also understands that solar energy will become cheaper in future and more desirable as governments worldwide are realizing the importance of using renewable energy sources to fight climate change and global warming concerns. Although coal-based power is the cheapest, given the changing energy mix, the company needs to diversify.

Coal India also has plans to install coal-to-methanol and coal gasification projects. It will even distill wastewater and sell it further. It is not the first time that Coal India has decided to go solar. The company had earlier announced building 1000 MW of solar plants.

India is a power hungry country. About 80% of India’s coal production is managed by Coal India. Coal India has set a target of mining 650mt of coal in 2018-19 and had mined 655.31mt of coal in the last financial year. However, given Coal India’s huge scale and manpower, it is impossible for the government to reform this company. India is even infamous for poor governance, red-tapism, and bureaucratic issues. We hope the targets set by Coal India are realistic and do not exist on paper only. Coal India has no competence in the building, operating or selling power, but still, it is going ahead. It will be interesting to see a big national Coal company diversifying into solar.

Amidst the coal mess, solar power comes as a boon for the country. It is not only environment-friendly but also cheaper. Moreover, it is easier to build a solar plant rather than building a traditional power plant. India is the third largest emitter of greenhouse gases and is targeting 100 GW of solar installations by 2022 in order to reduce its carbon footprint. Coal India’s 20 GW solar installations will go a long way in helping the government achieve its 100 GW solar installation target.