Coal India plans Rs7,000 cr thrust into solar energy

Coal India Ltd, the world's biggest producer of coal, is in the process of identifying locations for building Rs7,000 crore ($1.2 billion) worth of solar projects to compensate for carbon pollution, according to reports today.

The company is in talks with the ministry of new and renewable energy for a combined capacity of 1,000 MW. Earlier this month, coal and power minister Piyush Goyal described Coal India and the National Thermal Power Corp Ltd (NTPC) as "massive polluters" and said they "must give back to society."

The solar initiative is part of Prime Minister Narendra Modi's plan to provide round-the-clock electricity to homes and factories. Modi expects more than $100 billion investment in renewable energy, including wind farms and solar parks, as coal shortages lead to blackouts and thermal power plants hurt the environment.

The central government plans to sell 10 per cent of its stake in the Kolkata- based Coal India. The company had cash reserves of Rs527 billion as of 31 March, according to data compiled by Bloomberg.

Coal, which fires 60 per cent of India's electricity capacity, is perpetually in short supply because of transport bottlenecks and bureaucratic hurdles in opening new mines. This causes blackouts, prompting homes and factories to produce their own power that costs three times as much to produce.

India plans to increase solar power capacity to 10,000 megawatts by 31 March from 2,800 MW now, according to the renewable energy ministry. The effort would cost more than Rs50,000 crore.

While the plans are at an initial stage, Coal India may spread the project over different locations. It may use the free land it already has available, to get around the challenges of acquiring new land.

The company will need about 5,000 acres of land for setting up the 1,000 megawatt project.