Rajasthan could save ₹85 billion by using renewables and storage instead of new coal: CEEW - CNBC TV18

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Rajasthan could save up to ₹85 billion in power procurement costs in 2030 by meeting its emerging reliability needs through renewable energy and storage instead of new coal capacity, according to a study by the Council on Energy, Environment and Water (CEEW).

The study, How Should Indian States Choose New Power Generation Capacity? A Case Study of Rajasthan, assesses a February 2025 proposal by Rajasthan distribution companies (discoms) to contract 3,200 MW of new coal capacity to address projected shortages.

CEEW said Rajasthan’s 2030 shortfall is fundamentally a timing and flexibility problem, rather than just a capacity problem. Nearly 90% of the projected 5.5-billion-unit deficit occurs during non-solar hours, when solar generation is unavailable and the system needs resources that can respond swiftly to demand.

RE-plus-storage could save up to ₹85 billion

Replacing new coal with renewable energy and storage could generate net savings of ₹11.4 billion to ₹85 billion in 2030, according to the study.

The renewable energy and storage pathway could also help discoms earn around ₹35 billion in additional revenue by selling surplus power on exchanges.

“Discoms should evaluate options based on grid needs and overall system cost, rather than technology-level costs alone,” said Disha Agarwal, Fellow at CEEW.

Agarwal also said SECI’s recent round-the-clock renewable energy bid discovered a tariff lower than recently contracted or proposed new coal capacity in several states.

Clean energy pathway could create 27,000 jobs

The clean pathway could create around 27,000 full-time-equivalent jobs by 2030, compared with 2,560 under new coal, the study found.

It could also attract around ₹600 billion in clean energy investment.

The pathway would cut Rajasthan’s power-sector CO₂ emissions by 24%, to 52 million tonnes, compared with 68 million tonnes under new coal.

Rajasthan’s electricity requirement grew at an 8% compound annual growth rate between FY22 and FY25, with demand projected to reach 1.5 times FY25 levels by FY30.

CEEW said the proposed 3,200 MW of new coal capacity is designed to generate more than 20 billion units annually to address a 5.5-billion-unit deficit.

However, the study finds that the proposed coal capacity would still leave around 1% of demand unmet, compared with the Central Electricity Authority’s 0.05% reliability benchmark.

The Rajasthan case also points to a wider planning gap, according to CEEW.

In Bihar and Assam, state procurements saw 5,600 MW of new coal capacity contracted in 2025 at fixed costs of ₹4.17–₹4.54 per unit. The underlying planning studies, however, assumed capital expenditure that implied fixed costs of below ₹2.55 per unit for the same technology.

CEEW calls for system-level power planning

CEEW recommends that state discoms institutionalise scenario-based integrated resource planning.

It also recommends that procurement frameworks target least-cost outcomes at the system level by allowing all mainstream technologies to compete.

The study further calls for state regulators to build the technical capacity to independently evaluate procurement proposals, as technology capabilities and costs change and demand becomes more uncertain.

Also Read: Neuland Labs' first commercial peptide manufacturing module goes operational; Stock sees profit booking

The study, How Should Indian States Choose New Power Generation Capacity? A Case Study of Rajasthan, assesses a February 2025 proposal by Rajasthan distribution companies (discoms) to contract 3,200 MW of new coal capacity to address projected shortages.

CEEW said Rajasthan’s 2030 shortfall is fundamentally a timing and flexibility problem, rather than just a capacity problem. Nearly 90% of the projected 5.5-billion-unit deficit occurs during non-solar hours, when solar generation is unavailable and the system needs resources that can respond swiftly to demand.

Using 15-minute production-cost simulations for 2030, the study compares three pathways: business as usual, adding 3,200 MW of new coal, and an equivalent energy supply through a combination of solar, wind and battery storage.

RE-plus-storage could save up to ₹85 billion

Replacing new coal with renewable energy and storage could generate net savings of ₹11.4 billion to ₹85 billion in 2030, according to the study.

The renewable energy and storage pathway could also help discoms earn around ₹35 billion in additional revenue by selling surplus power on exchanges.

“Discoms should evaluate options based on grid needs and overall system cost, rather than technology-level costs alone,” said Disha Agarwal, Fellow at CEEW.

“Our analysis shows that RE-plus-storage can meet Rajasthan’s future reliability needs at lower cost than the proposed coal capacity,” she said.

Agarwal also said SECI’s recent round-the-clock renewable energy bid discovered a tariff lower than recently contracted or proposed new coal capacity in several states.

Clean energy pathway could create 27,000 jobs

The clean pathway could create around 27,000 full-time-equivalent jobs by 2030, compared with 2,560 under new coal, the study found.

It could also attract around ₹600 billion in clean energy investment.

The pathway would cut Rajasthan’s power-sector CO₂ emissions by 24%, to 52 million tonnes, compared with 68 million tonnes under new coal.

Rajasthan’s electricity requirement grew at an 8% compound annual growth rate between FY22 and FY25, with demand projected to reach 1.5 times FY25 levels by FY30.

CEEW said the proposed 3,200 MW of new coal capacity is designed to generate more than 20 billion units annually to address a 5.5-billion-unit deficit.

However, the study finds that the proposed coal capacity would still leave around 1% of demand unmet, compared with the Central Electricity Authority’s 0.05% reliability benchmark.

The Rajasthan case also points to a wider planning gap, according to CEEW.

In Bihar and Assam, state procurements saw 5,600 MW of new coal capacity contracted in 2025 at fixed costs of ₹4.17–₹4.54 per unit. The underlying planning studies, however, assumed capital expenditure that implied fixed costs of below ₹2.55 per unit for the same technology.

CEEW calls for system-level power planning

CEEW recommends that state discoms institutionalise scenario-based integrated resource planning.

It also recommends that procurement frameworks target least-cost outcomes at the system level by allowing all mainstream technologies to compete.

The study further calls for state regulators to build the technical capacity to independently evaluate procurement proposals, as technology capabilities and costs change and demand becomes more uncertain.

Also Read: Neuland Labs' first commercial peptide manufacturing module goes operational; Stock sees profit booking

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