PM’s office reportedly considering waiving carbon tax on coal

As Germany shuttered another of its nuclear power plants on New Year’s Day, Narendra Modi’s office was said to be considering a proposal which would make coal more competitive with renewables in India.

January 2, 2020 Max Hall

Clean energy has reportedly undercut coal-fired power in India but the fossil fuel may soon get a helping hand from the government.

Image: hangela/Pixabay

From pv magazine International.

The festive period has brought mixed tidings for the renewables industry with India reportedly considering a proposal to waive its carbon tax on coal-fired power just as Germany shuttered another nuclear facility.

News wire Reuters on Monday carried an article on its Zawya Middle Eastern web portal which stated its staff had seen documents outlining a proposal to waive the Rs400/ton carbon tax applied to the production and import of coal.

The news service reported the suggestion had been made by Hardik Shah in October, as a means of helping out coal power producers who have been affected by late payments from India’s financially crippled electricity distribution companies.

Emission reduction delays

Reuters reported India has already pushed back to 2022 a plan to reduce sulphur oxide emissions from coal-fired power plants and stated more than half of the nation’s coal power facilities were expected to miss the start last month of a phased deadline to install equipment to reduce the emissions, which are harmful to human health.

Shah, a deputy secretary in the Prime Minister’s Office, reportedly suggested to the Ministry of Power the carbon tax on coal be removed to help coal-fired plant operators pay for the cost of installing anti sulphur oxide equipment. Reuters stated Shah argued that if coal power companies funded the equipment themselves they would simply end up owed even more money by distribution companies.

pv magazine put in four telephone calls to the Indian Ministry of Power this morning but was cut off each time without explanation.

Cost gap

Reuters reported coal-fired power is sold to distribution companies for around Rs3.5/unit, compared to the Rs2.5-3 unit cost of renewable energy. The news service said the Prime Minister’s Office had calculated the carbon tax accounted for Rs0.3-0.35 of the unit cost of coal-fired electricity.

German energy company EnBW on Tuesday closed its Philippsburg II nuclear plant, near Karlsruhe.

The energy company said in a press release, it will start removing two cooling towers at the site this year. Reuters reported that work will form part of a 10 to 15-year decommissioning process which, along with the previous closure of Philippsburg I will cost EnBW an estimated €7.5 billion (Rs59,900 crore).

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