Rajasthan's Bold Move: RERC Rejects 3,200 MW Coal Plant for Cheaper Renewables + Storage Published 2025-12-13 15:55:00 By Anupam Nath Rajasthan Electricity Regulatory Commission (RERC) has made headlines by rejecting a massive 3,200 MW new coal-based power plant proposal from Rajasthan Urja Vikas and IT Services Ltd (RUVITL). Issued on November 18, 2025, the order prioritizes consumer interests, aligning with updated national projections and the state's Clean Energy Policy 2024. This decision marks a pivotal shift in India's energy landscape, favoring flexible renewables over inflexible fossil fuels.The proposal sought long-term (25-year) procurement of coal power via competitive bidding to meet rising demand and grid stability. However, RERC found no technical or policy justification overriding the Central Electricity Authority's (CEA) revised Resource Adequacy Plan (RAP) 2025. Initially, RAP 2024 projected 3,246 MW thermal needs by 2031-32, but the August 2025 update slashed this to just 1,905 MW by 2035-36 – a 40% cut. Recent commissions like the 2,800 MW Banswara Nuclear Project and 2,400 MW Nabinagar Thermal Plant, allocating 2,400 MW to Rajasthan, further bolster supply. RUVITL's existing 1,950 MW lignite/gas and 6,630 MW Firm Dispatchable Renewable Energy (FDRE) contracts were overlooked, exacerbating the mismatch.Rajasthan grapples with high daytime renewable curtailment due to solar oversupply. Adding baseload coal would worsen this, locking discoms into high fixed charges during low-demand hours. Economically, the in-state plant (far from coal mines) hikes tariffs by 15-20% via transport costs (Rs 3,800/tonne coal), projecting Rs 7/kWh versus cheaper alternatives. Stakeholders like Prayas (Energy Group) and Third Derivative highlighted RE + Battery Energy Storage Systems (BESS) savings: Rs 2,200-4,500 crore annually, with modular deployment in months, faster ramp rates, and no lock-in risks.RERC emphasized Supreme Court directives (BSES Rajdhani vs Union of India, August 2025) mandating consumer protection through competitive, efficient procurement. Building coal at Rs 11.5 crore/MW in Rajasthan forfeits savings from pithead locations like Chhattisgarh. Instead, the order pushes short-term PPAs (10-12 years), medium/short-term open access (1,500-6,000 MW), and RE-friendly measures like virtual net metering (October 2025) and BESS rebates. This aligns with National Electricity Plan 2023, promoting storage to tackle intermittency.Experts hail this as a blueprint for India's transition. With coal at 70% of the 2024-25 mix amid rising demand, Rajasthan – a solar-rich state – signals flexibility over fossil lock-ins. Think tanks like Centre for Science and Environment urge other regulators to follow, ensuring discoms adapt to falling RE costs and tech evolution. This rejection underscores BESS as the grid's future: reliable, green, and affordable.
