Private power producer Tata Power will lead the nation's renewable energy transition with gradual withdrawal from building new coal fired power plants, a report said.
The country's largest private integrated power company has recently made it clear that it will cease to build new coal-fired power capacity, according to 'Tata Power: Renewables to Power Growth' report released by Institute for Energy Economics and Financial Analysis (IEEFA) Tuesday.
The report highlights the company's long-term strategy that will see renewable energy dominate its power capacity build-out going forward.
Tata Power's focus on renewables makes sense given the major energy transformation now occurring, report author Simon Nicholas, Energy Finance Analyst at IEEFA, said in a statement.
The company's Strategic Intent 2025' plan calls for up to 70 per cent of new capacity additions to come from solar, wind and hydro through to 2025, said Nicholas.
This represents a significant departure from the accepted wisdom of just a few years ago that a major expansion of coal-fired power would be required to serve India's growing electricity demand, Nicholas.
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According to the report, the majority of Tata Power's thermal capacity is now centred on its Mundra coal-fired power plant - one of the biggest power plants in India - which experienced losses reaching USD 191 million for the first three-quarters of FY2018-19.
The Mundra plant is making consistent, significant losses that are dragging back the company's overall financial performance, said Nicholas.
While a bailout of the plant is being planned, which will increase the tariff burden on consumers and realise a debt write-down for bank lenders, Tata Power has stated it will only halve the losses at Mundra," said Nicholas