India should revive thermal power plants over investing in new ones: report
IEEFA estimated that acquiring 6.1GW of stranded plants could help meet energy security needs.
India would be better off reviving stranded thermal power plants instead of investing in new ones, the Institute for Energy Economics and Analysis (IEEFA) reported.
In a report, IEEFA estimated that acquiring 6.1 gigawatts of stranded plants could help meet immediate energy security needs. The report noted that this needs to come with plants to retire and repurpose the plants for renewable energy generation.
“In light of energy security concerns, strategic acquisitions and subsequent revival of the stranded power sector capacity present in India can be a viable alternative to adding new thermal assets,” said Shantanu Srivastava, Sustainable Finance and Climate Risk Lead, South Asia, IEEFA.
“IEEFA believes any new investment in thermal power can potentially lead to stranded asset risk, given the clear economic case of renewable energy over thermal power. Financing these thermal plants will expose domestic banks to another set of potential power sector non-performing assets (NPAs) and a higher climate risk on their portfolios.”
IEEFA added that acquiring and reviving power sector NPAs could allow banks to clean up their books which have kept high NPAs for over a decade.
“It will give the banks more headroom to contribute towards achieving India’s ambitious clean energy goals,” he said.