India Refraining From COP28 Pledge Could Boost Stressed Power Plants

India's decision to refrain from the pledge to triple renewable energy capacity by 2030 at the COP28 summit may boost the performance of stressed thermal power plants in the country.

"It is likely the government may ask Coal India Ltd. to enter into a long-term fuel supply agreement with these projects to run them at full capacity, make them viable and subsequently increase India's per capita consumption of electricity," said Rupesh Sankhe, vice president and power sector analyst at Elara Securities (India) Pvt.

Such a decision will help the performance of stressed thermal power plants like Jaiprakash Power Ventures Ltd., GMR Power and Urban Infrastructure Ltd., and RattanIndia Power Ltd., among others, he said.

To maintain over 7% growth in electricity demand, thermal-based power generation (from coal and gas) is needed, as capacity utilisation for renewable projects is only 18–20%. Keeping that in mind, the Indian government has planned for an additional 60 GW of thermal capacity by 2030.

India has also reiterated its right to use coal on the grounds that its historical contribution to the carbon crisis has been negligible, at below-global average per capita emissions of 4%.

On Saturday, India endorsed the threefold increase in renewable energy by 2030 but refrained from formally supporting the comprehensive pledge.

This commitment involves scaling up clean power alongside a decrease in the use of fossil fuels. The pledge called for phasing down unabated coal power and putting an end to the financing of new coal-fired power plants.

The International Energy Agency said the world must triple its renewable energy capacity and double the rate of energy efficiency by 2030 to drive down demand for fossil fuels and limit global warming to 1.5 degrees Celsius by the end of the century.