NTPC Ltd [NTPC:IN], India’s largest power generator, recently announced its target to install 60 gigawatts (GW) of renewable energy by 2032, almost doubling its earlier commitment of 32GW, as reported by The Economic Times on June 24. Most of the renewables expansion is expected to be solar power. The company currently has 1.09GW of commissioned renewables projects and another 2.28GW under implementation.
The announcement signals NTPC’s strategy to integrate more renewable energy into its generation portfolio as it has been predominantly reliant on fossil fuels. Although it changed its name from National Thermal Power Company to NTPC in 2005, the company still sources over 90% of energy from fossil fuels today. In order to promote its renewables business, NTPC announced last year the incorporation of NTPC Renewable Energy as a wholly-owned subsidiary as well as the plan to acquire 1GW of operational solar assets. Earlier this year, the company also said that it would commence India’s largest floating solar plant in the city of Ramagundam.
Despite that coal takes up over half of India’s current fuel mix, the country has gradually progressed toward a more sustainable energy system. Data from India’s Central Electricity Authority (CEA) showed that the country’s fossil fuel-based power generation has been declining since 2018, while the plant utilization rates for coal-fired power plants also showed a significant reduction. In 2020, state-owned plants’ utilization rate of fossil fuel resources dipped below 50% for the first time, while the national average utilization rate was barely above 50%. This suggests that coal power has become less profitable in India. On the other hand, according to an analysis by BloombergNEF, solar installation is now cheaper than coal and gas plants in India, and the installed solar capacity is projected to expand 700% during this decade, reaching about 280GW by 2030.