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India asks utilities to not retire coal-fired power plants till 2030 - notice

Workers unload coal from supply truck at yard on outskirts of western Indian city of Ahmedabad

By Sudarshan Varadhan

SINGAPORE (Reuters) - India has asked utilities to not retire coal-fired power plants till 2030 due to a surge in electricity demand, according to a federal power ministry notice reviewed by Reuters, just over two years after committing to eventually phase down use of the fuel.

The energy-hungry nation said last May it plans to reduce power generation from least 81 coal-fired plants over the next four years, but the proposal did not involve shutting down any of its 179 coal power plants. India has not set a formal timeline for phasing down coal use.

"It is advised to all power utilities not to retire any thermal (power generation) units till 2030 and ensure availability of units after carrying out renovation and modernisation activities if required," the Central Electricity Authority (CEA) said in a notice dated Jan. 20 sent to officials in the federal power ministry.

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The CEA, which acts as an advisor to the ministry, cited a December meeting where the federal power minister had asked that ageing thermal power plants not be retired, and to instead increase the lifetime of such units "considering (the) expected demand scenario".

The federal power ministry did not immediately respond to emailed requests for comment.

India, the world's second largest-consumer, producer and importer of coal, fell short of its 2022 renewable energy addition target by nearly a third. Coal accounts for nearly three-quarters of annual electricity generation.

Power demand in India has surged in the recent months due to extreme weather, rising household use or electricity as more companies allowing employees to work from home, and a pickup in industrial activity after easing of coronavirus-related restrictions.

Peak power demand met - a measure of maximum power supplied during the day - rose to a record of as much as 210.6 GW on Jan. 18, 1.7% surpassing the previous peak of 207.1 GW at the height of an intense heatwave last April that caused India's worst power crisis in six and a half years.

"Peak power demand has already risen 5% this year. If it increased by another 3-4%, we could be staring at another crisis," a senior official at a utility in a southern Indian state said.

"There is no question of retiring old coal units," the official said, speaking on condition of anonymity because he is not authorised to speak to the media.

(Reporting by Sudarshan Varadhan; Editing by Kenneth Maxwell)