Tata Power may pull the plug on new coal power, says study

Company News

Tata Power, the country’s largest private integrated power producer, is likely to cease building new coal-based generation projects, shifting gears to renewable power sources, a study showed.

A report by the US-based Institute for Energy Economics & Financial Analysis (IEEFA) titled ‘Tata Power: Renewables to Power Growth’ spells out the company’s long-term strategy that will see renewable energy dominate its power capacity build-out going forward.

Presently, thermal power accounts for around 70 per cent of Tata Power’s portfolio. But the current energy mix is part of the company’s long-term legacy before 2013 when renewable energy was pricier compared with competitive coal-fired power.

“The company’s plan, ‘Strategic Intent 2025’ calls for up to 70 per cent of new capacity additions to come from solar, wind and hydro through to 2025. 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”, said Simon Nicholas, energy finance analyst at IEEFA.

Tata Power’s debt laden and stranded power asset at Mundra (Gujarat) is viewed as the trigger for the company to abjure fresh coal-fired capacities.

“The Mundra plant is making consistent, significant losses that are dragging back the company’s overall financial performance. Tata Power’s experience at Mundra has helped convince the company to turn away from new coal-fired power”, Nicolas said.


 Tata Power had not responded to Business Standard’s questions sent by mail till the time this report was filed.