The Comptroller and Auditor General of India (CAG) has pulled up government-owned Coal India (CIL) for the tardy implementation of its solar energy initiatives and recommended that it ‘fast-track’ project execution to meet its Net Zero targets.

In its recently released compliance audit report, the CAG said CIL and its seven subsidiaries had achieved only 4.08% of the targeted 3 GW of solar capacity by the end of 2024.

According to Mercom India Research, CIL currently has an operational solar capacity of 208.05 MW and an additional 510 MW under development.

The company has set a renewable energy target of 9.5 GW by the financial year 2030. Given its performance so far, the target does not appear to be within reach.

In 2024, the government issued directives to coal companies to accelerate the adoption of solar power in their operations, including rooftop solar installations, and to develop solar projects in de-coaled areas and on available land.

Government-owned coal companies offered to make surplus land available with them for private investors interested in setting up green hydrogen and pumped storage projects.

According to its annual report 2024–25, CIL commissioned 114 MW of ground-mounted solar projects, including a 24 MW project at Central Coalfields, 50 MW at Mahanadi Coalfields, 20 MW at South Eastern Coalfields, and another 20 MW at Bharat Coking Coal. Rooftop solar installations across various subsidiaries contributed an additional 12.11 MW during the year.

The CAG report recalled that, in line with the target of 3,000 MW of solar power by 2024, CIL had set up joint ventures with NTPC and NLC India to develop a total capacity of 2,000 MW. It had also formed a special purpose vehicle for project execution.

However, work orders had been issued only for 692.50 MW of ground-mounted solar projects and 34.56 MW of rooftop projects until December 2024, with anticipated commissioning by 2027-28.

The Ministry of New and Renewable Energy (MNRE) stated that CIL also planned to add 158 MW of solar capacity by 2025-26, and it would explore floating solar projects at abandoned mines and stabilized overburden dumps in the company’s subsidiaries. “However, the Ministry had remained silent about the progress of the work,” the CAG said.

Execution Challenges

The CIL management attributed the slow progress to solar supply chain disruptions post-COVID and to the blanket time extension granted by MNRE until March 2024. It also stated that other public sector enterprises were similarly affected by the pandemic.

In its annual report, CIL said it faces several challenges in scaling up its solar initiatives. Right-of-way issues for transmission line corridors remain a persistent obstacle, complicating power evacuation. Delays in obtaining regulatory clearances further impact project timelines.

According to the company, integrating solar projects into active mining areas poses unique engineering and safety challenges, while volatile global solar module prices and high initial capital requirements add financial risk. Securing long-term power purchase agreements remains a critical hurdle, complicated by market pricing volatility, regulatory delays in tariff approvals, and limited grid connectivity options.

In its audit of Bharat Heavy Electricals (BHEL), another public sector enterprise, the CAG said the technology used in the company’s manufacturing facilities had become outdated. Its 85 MW solar cell and 200 MW module have minimal utilization due to limited raw material availability. The module line cannot be further upgraded.

It said BHEL must explore the possibility of creating new facilities or upgrading existing ones with modern technology, as per market demand/conditions.

Regarding the performance of its solar engineering, procurement, and construction business, the CAG said BHEL must analyze its execution experience and market presence to decide on investment for future expansion.