CHENNAI: Electricity from Tamil Nadu’s proposed 1,600 MW coal-fired power project in Thoothukudi could cost up to Rs 10.40 per unit, more than double the estimated Rs 5 per unit from solar power backed by battery storage, according to a report by Climate Risk Horizons (CRH), which says the renewable alternative could save the state Rs 16,384 crore in power generation costs over five years.
Chief Minister C Joseph Vijay had announced in the state assembly that 2X800 MW Supercritical Thermal Power Plant units would be set up at Rs 20,800 crore to replace the aged 5X210 MW Thoothukudi Thermal Power Station.
CRH estimated that power generated at the new coal power plant would cost Rs 8.75 per unit at a 75% plant load factor, rising to Rs 10.40 at 55%. The solar-plus-storage alternative would require 3,490 MW of solar capacity and 9,067 MWh of battery storage, with an estimated capital cost of Rs 27,289 crore, Rs 6,489 crore more than the coal project. However, lower generation costs could offset the additional investment by the second year, the report said. Over five years, it estimated generation costs at Rs 33,965 crore for coal, against Rs 17,581 crore for solar and battery storage.
The report also flagged the financial burden on Tamil Nadu Power Distribution Corporation Limited (TNPDCL), estimating fixed-cost payments of about Rs 4,120 crore in the first year of commissioning and nearly Rs 20,000 crore over five years.
Tamil Nadu’s power utilities have accumulated debt of over Rs 2.47 lakh crore, accounting for 77.6% of the state’s public sector debt, according to CRH. It warned that the proposed coal capacity could add to the burden, with borrowing costs ultimately reflected in electricity tariffs.
The report also questioned the project’s compatibility with Tamil Nadu’s target of achieving net-zero emissions by 2050 and raised concerns over additional pollution in Thoothukudi.
CRH estimated that power generated at the new coal power plant would cost Rs 8.75 per unit at a 75% plant load factor, rising to Rs 10.40 at 55%
“Given the economic situation that Tamil Nadu is in and the clear financial benefits of solar PV and battery storage, it makes no financial sense to build new coal plants to meet growing electricity demand,” said Ashish Fernandes, director of CRH.
CRH said the renewable option’s capital cost could rise to Rs 28,921 crore if viability gap funding for battery storage was unavailable. The estimates are based on assumptions about coal plant utilisation, solar generation and battery costs.