India plans to stop building new coal-fired power plants and will remove provisions allowing for additional coal capacity from the final draft of its National Electricity Policy (NEP), Reuters reported citing sources familiar with the matter.
According to senior government officials, India has decided that no new coal power projects will be needed beyond those currently under construction.
After extensive review, the government has determined that beyond projects already underway, new coal power plants will not be required, said one official.
The shift in policy will not impact the 28.2 GW of coal power currently under construction but halts further additions.
The initial 2021 draft of the NEP had suggested India may need to add as much as 28 GW of additional new coal capacity to meet projected power demand, but officials said the final draft removes all references to new coal projects.
While coal is expected to remain India's dominant power source for decades, environmentalists have pushed India to stop building new coal plants to curb both pollution and climate change impacts.
The new NEP also recommends delaying retirement of old coal plants until energy storage options for renewable power become more affordable. So far, 13 GW of old coal capacity has had retirement deadlines extended to address ongoing power shortages.
The policy change could significantly impact long-term coal prices and mining companies in Indonesia, Australia and South Africa that supply coal to India.
(Writing by Alex Guo Editing by Harry Huo)
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