Coal plants to promote Solar power

The Modi Government has asked the coal power plants to make solar farms more competitive. According to this decision, some of the older coal power plants which are into existence for almost 25 years now, shall be used to establish solar capacity set by National Thermal Power Corporation (NTPC). NTPC one of the better run state company, has plans to set up 15 GW of solar plants by 2019.

Electricity from both the technologies will be sold to the grid. This will help in reducing the price of solar, as a result of bundling together cheaper coal with expensive solar. This move will also force distribution companies to take more of solar power.

The distribution companies face a unique problem in India. They sell subsidized power but never receive the subsidies from government. They are unable to charge customers enough to cover the costs and hence run in huge losses. This program is designed to use more of solar energy and also help the government in achieving its 100 GW solar installation target by 2022.

Some of the older coal power plants in India are Singrauli, Korba, Rihand Stage I, Vindhyachal Stage I and Ramagundam, which will complete 25 years in service in 2016 and 2017. The cumulative capacity of these plants is close to 9 GW.

“In case of Singrauli if the present tariff is 1.80 rupees, then the bundled tariff will be only 3.12 rupees or 3.15 rupees,” A.K. Jha, chairman and managing director of NTPC, said in the earnings call.

Source: NTPC

Though I am not a big fan of the idea of NTPC getting into solar, but bundling of power will make sense. It will reduce the overall price of solar and help promote solar. It will also help the distresses coal power plants which are sinking in losses. However, there could be a hurdle since 25 years old plants will not be very efficient. Moreover I am not sure if it would make much sense, as solar power is becoming competitive on a stand-alone basis.