Coal India, UPRVUNL sign JV for renewable energy projects

Coal India Limited and the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) have signed a joint venture agreement to build renewable energy projects. The deal was announced this week by Power Peak Digest.

The joint venture will focus on solar and wind power plants. It marks a shift for Coal India, which produces most of the coal burned in India's thermal power plants. The state-run miner has been under pressure to cut its carbon footprint and find new revenue streams as the country pushes toward clean energy.

UPRVUNL is the power generation arm of the Uttar Pradesh government. It runs several coal-fired plants across the state. By teaming up with Coal India, the utility gets access to land and resources for renewable projects.

Neither company has disclosed the exact capacity or investment amount for the joint venture. But both have set targets for adding green power. Coal India wants to install 3 gigawatts of solar capacity by 2024. UPRVUNL has plans to build 1.5 gigawatts of solar and wind capacity.

The joint venture will likely set up projects in Uttar Pradesh and other states. Coal India owns large tracts of land near its mines, which can be used for solar arrays. The company has already started building a 20-megawatt solar plant on reclaimed mining land in West Bengal.

India aims to hit 500 gigawatts of renewable energy capacity by 2030. That target requires massive investment from both private and public players. Coal India's move into renewables is part of a broader trend. Other state-run firms like NTPC and Indian Oil have also announced big clean energy plans.

But experts say Coal India faces hurdles. The company's core business is coal mining. Shifting focus to renewables will need new skills and a different corporate culture. Land acquisition and grid connectivity remain challenges for large solar and wind farms.

The deal also comes at a time when India's power demand is rising fast. The country added 15.4 gigawatts of renewable capacity in the last financial year. Yet coal still accounts for over 70% of electricity generation.

For UPRVUNL, the joint venture helps meet renewable purchase obligations. State utilities must buy a certain share of power from clean sources. Falling short can lead to penalties. Partnering with Coal India gives UPRVUNL a cheaper way to meet those targets.

The two companies signed the agreement in New Delhi. Senior officials from both sides attended the ceremony. A formal launch of the joint venture is expected in the coming months.