Sustainable mining: Coal India Ltd off blocks in hunt for green energy

The power purchase agreement (PPA) signed recently between the Coal India Ltd (CIL) and Gujarat Urja Vikash Nigam Ltd (GUVNL) for supply of solar power to Gujarat, though small in size as it pertains to a 100-MW plant in the state, marks an important milestone in its journey towards becoming a carbon-neutral company.

The PPA, signed for a tenure of 25 years, materialised after reverse auction bidding, with CIL quoting the lowest tariff of Rs 2.20 per unit among 10 bidders, which included experienced players like NTPC and SJVNL. The coal producer’s foray into solar generation would entail the development of a 100-MW solar power plant at an expenditure of Rs 442 crore in the state. The PPA signed towards the end of last month stipulates the 100-MW solar plant being operationalised and supplying power to GUVNL within 18 months of the inking of the agreement.

Coal India is executing the project through a solar EPC contractor, with the tender for the same having been issued. “The finalisation of the contractor is at an advance stage and the project will be executed within a year of the date of placement of the work order,” a CIL official says.

The company’s renewable foray is a part of its diversification agenda of becoming a carbon-neutral company by 2024, even as it increases its coal output to 1 billion tonne. The mining behemoth plans to power its mining operations through a 3,000-MW solar portfolio, which would include 14 ground-mounted and rooftop projects, thereby reducing its carbon footprint. It has earmarked an investment of Rs 13,400 crore to create a solar portfolio of 3,000 MW by 2024.

Two subsidiaries, CIL Solar PV Limited and CIL Navakarniya Urja Ltd, have been set up to push the green energy agenda.