Tamil Nadu Generation and Distribution Corporation (Tangedco) that depends on thermal power to fulfil the energy demand during peak hours has thermal plants, contributing substantially to environment pollution.
The State, along with central thermal stations, has a thermal capacity of 9,000 Mega Watt (MW) with plants of nearly 4,000 MW capacity being old and operating at half the plant load factor (PLF). With the State facing severe financial crunch but having the mandate to repurpose old thermal plants by 2024 as per the notification of the Ministry of Environment, Forest and Climate Change, Climate Risk Horizons (CRH) did a study to quantify the financial benefits of shutting down old thermal plants and replacing it with solar plants.
The CRH research report titled ‘Financial benefits of repurposing Tamil Nadu’s old coal plants’, by Gireesh Shrimali and Abhinav Jindal of Oxford University, has quantified the comparative financial costs, accrued from decommissioning old thermal plants and reusing the land and the thermal plant with renewable solar plants and battery storage. The study involves four thermal plants— Tuticorin I, II and III (1,050 MW), Mettur I and II (840 MW), North Chennai Stage I (630 MW) and NLC II Stage I (1,470 MW).
The report found that by repurposing old coal plants with clean energy, the State would benefit by over ₹4,000 crore, even while bringing stability to its electricity grid by converting the turbo generator of the thermal plants into synchronised condensers to provide reactive power.
Ashish Fernandes, CEO of CRH, talking about the study said the report was a follow up to other reports of shutting down old thermal plants, not to go for new thermal plants and the availability of cheap renewable energy. Mr. Fernandes said the Tamil Nadu Generation and Distribution Corporation (Tangedco), which has been burdened with a net loss of ₹32,553 crore for the financial year 2020-2021 and having a total debt of ₹1,34,119.94 crore could make huge savings in the capital cost by dismantling the thermal plants and by making use of the lands for installing solar plants along with battery storage, amounting to 350 MW solar with 36 MW battery storage for four hours. He cited the recent power purchase agreement signed by FICCI for round-the-clock power at ₹5 per unit.
Financial benefits have been arrived based on the decommissioning costs for the four plants assessed to be approximately ₹1,300 crore, while the one-time benefits of repurposing with solar plants with battery storage would be ₹2,400 crore. By using the old power plant turbo generator to serve as synchronous condensers, the total benefits are even more significant at nearly ₹4,000 crore.
Gireesh Shrimali, Head of Transition Finance Research, Oxford Sustainable Finance Group, said the study suggests that the financial benefits of repurposing these coal plants would be two to three times the costs of decommissioning, and would cover the cost of new capital expenditure required for solar, batteries and synchronous condensers.
G. Sundarrajan of Poovulagin Nanbargal said reducing dependence on expensive and obsolete coal plants was essential for the State’s energy and financial security. With growing air and water pollution from coal plants and impacts of severe climate change, the State needed to look at long-term solutions of using renewable energy.
