Not content with its knitting, Coal India ventures into solar

May 28, 2013
Coal India

In a surprising diversification move Coal India – the giant state-controlled mining company – has decided to set up solar power projects across the country.

The reason for the world’s largest non-renewable energy producer venturing into the renewable sector, is a growing realization that India’s coal reserves are not going to last for long, the company told prospective bidders for solar power equipment contracts.

“India has an abundance of sunshine and the trend of depleting fossil fuels is compelling energy planners to examine the feasibility of using renewable sources like energy like solar, wind, and so on,” Coal India said in a bidding document.

The company is seeking proposal for the supply of solar technologies to be used in its planned plants, the first of which is to be established in Sambalpur, Odisha State.

The power plant to be set up would be of 2-MW capacity initially, using crystalline solar photovoltaic panels in a modular form, which can be scaled up to have the requisite system to generate and export power to the main grid.

The solar farm would be spread over nine acres on land already in Coal India’s possession, giving the behemoth an even bigger advantage over other solar developers.

The idea that India’s monopoly coal supplier is moving into their patch is liable to set alarm bells ringing among the country’s solar power project developers. With revenues of INR826.41 billion (USD15 billion) and a profit of INR147.88 billion (USD2.7 billion) in 2012, Coal India certainly has deep pockets to fund solar developments which the rest of the industry cannot hope to match.

Critics will certainly say that the company should be re-investing to fix problems in its core operations. Coal India is not at all popular with the country’s electricity generating industry because its supply to power plants has been erratic, to say the least, in recent years.

The company has also come under fire recently about the quality of the coal it delivers. NTPC, India’s largest electricity producer, has been complaining that it often has to scoop out huge boulders from the mountains of coal supplied by Coal India.

The new tariff-based incentives for solar photovoltaic-based power generation, announced recently by the new and renewable energy ministry, is another reason Coal India is now looking at this option.

The brainstorm session has been called to elicit suggestions and observations from prospective bidders on the scope of work and technical specifications.

While this will be a commercial project, Coal India is also mulling installing solar photovoltaic panels at Ranchi where its mining research arm, the Central Mine Planning and Design Institute, is located.

This project of installing roof-top solar panels at the mining areas and staff colonies is aimed at reducing Coal India’s own energy bills, officials said.

Neyveli Lignite Corp, the other public sector coal mining company, is also actively venturing into solar power generation by setting up a 10-MW photovoltaic project near the Neyveli airstrip in the first phase. This will be increased to 25-MW later.

One might think that Cola India could learn a lesson from BP.

After a very public campaign to promote renewable energy, BP last month, announced that it was selling off its wind power assets in what it called part of a "continuing effort to become a more focused oil and gas company and re-position the company for sustainable growth into the future." The decision followed BP's 2011 exit from solar power after 40 years in the business.