Future-Proofing India’s Coal PSUs

Public Sector Undertakings (PSUs) hold strategically important and dominant positions in India’s energy sector. These PSUs are valuable assets for the Indian state delivering significant financial benefit to its primary shareholder, the Government of India. Further, they employ millions of citizens, engage in community building, and take on activities of strategic importance.

With the growing pressure from cost-competitive clean energy sources and India’s global decarbonization commitments, the businesses of Indian energy PSUs are likely to face challenges due to their carbon-intensive nature, thereby translating into a potential loss for the Indian state at large and necessitating mitigatory strategies.

Given the thematic focus of the volume in which this chapter is published; the chapter evaluates the transition linked to financial risk and proposes a business diversification framework for the PSUs engaged primarily in the business of solid fossil mining (Coal India Limited) and conventional power generation (NTPC Limited). The business diversification framework considers technology maturity, market potential, and financial attractiveness to develop competing investment scenarios. This analysis is aimed at supporting medium to long-term business planning for the futureproofing of these PSUs.

Includes contributions from Balasubramanian Viswanathan.

This chapter is part of the book ‘The Role of Coal in a Sustainable Energy Mix for India’ compiled by IIM Calcutta and published by Taylor and Francis.

Read the chapter here