Coal India, UPRVUNL Sign JV to Build Renewable Projects in UP

Coal India Limited and the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) have signed a joint venture agreement to develop renewable energy projects in Uttar Pradesh. The deal was announced earlier this week.

The joint venture will focus on setting up solar parks and other clean energy facilities across the state. Both companies will hold stakes in the new entity, though the exact shareholding split has not been disclosed.

Coal India, the world's largest coal miner by output, has been pushing into renewable energy as part of its diversification strategy. The company aims to install 3 GW of solar capacity by 2024 and 10 GW by 2030.

UPRVUNL, the state-owned power generation company, operates thermal power plants in Uttar Pradesh. The partnership allows the utility to add green energy to its portfolio without bearing the full financial risk alone.

The move comes as India pushes for 500 GW of non-fossil fuel capacity by 2030. Uttar Pradesh, India's most populous state, has set a target of 22 GW of renewable energy by the same year.

Uttar Pradesh already has several large solar parks under development, including the 600 MW Bhadla park and the 2 GW Rewa Ultra Mega Solar project. The new joint venture could add significant capacity to these efforts.

Coal India's entry into renewable energy has been gradual. The company floated its first solar tender for 2 GW in 2021. It has also signed agreements with state utilities in Rajasthan and Gujarat for joint development of solar projects.

Industry experts say the partnership makes sense. Coal India has land and mining infrastructure that can be repurposed for solar farms. UPRVUNL has the transmission network and local knowledge to speed up project approvals.

Financial details of the joint venture were not revealed. The companies said they will finalise the project pipeline in the coming months. Land acquisition and grid connectivity will be key challenges, as they are for most renewable projects in India.

The joint venture is the latest in a string of collaborations between coal companies and state power utilities. In 2022, NTPC formed a renewable energy subsidiary. States like Madhya Pradesh and Maharashtra have also announced similar tie-ups.

Coal India produced about 700 million tonnes of coal last year. The company's shift into renewables is partly driven by government pressure and partly by a need to future-proof its business as the world moves away from coal.

UPRVUNL currently operates thermal plants with a combined capacity of over 5 GW. The utility has been under financial strain due to rising coal prices and delayed payments from state distribution companies. Adding renewable energy could help lower its average power purchase costs.

The joint venture will operate under the name Coal India UPRVUNL Renewable Energy Limited. The company will develop projects on a build-own-operate basis. It will also look at hybrid projects combining solar and wind.

No timeline has been set for the first project. The companies said they will conduct feasibility studies and seek regulatory approvals before breaking ground.