A team of energy economists on Tuesday questioned the viability of a proposed 1,320mw coal-fired power plant about 148km southeast of Delhi and predicted the thermal plant would worsen the National Capital Region’s air pollution woes.

The researchers with the US-based Institute for Energy Economics and Financial Analysis (IEEFA) have also urged the Indian government to abandon the Khurja coal power plant in Bulandshahr district, saying renewable energy is cheaper and more sustainable.

The Tehri Hydro Development Corporation (THDC), which manages the Tehri dam and a 2,400mw hydropower complex on the Bhagirathi river, had in June this year indicated its intention to award a contract for construction of the Rs 8,000 crore Khurja power plant.

The THDC is a 75:25 joint venture between the Centre and the Uttar Pradesh government.

The IEEFA economists said in a report released on Tuesday that the Khurja power plant was feasible when proposed eight years ago in response to power shortages across northern India but is no longer so because of technological advances.

“Renewable energy generation in India is now cheaper than Khurja’s non-mine mouth coal,” said Tim Buckley director of energy finance studies at IEEFA and a co-author of the report. “Price declines are prompting states, including Uttar Pradesh, to seek solar and wind options to meet demand growth.”

The report says the Khurja power plant will rely on a 900-km rail haul to bring coal from a mine in Madhya Pradesh to the plant which will make add to the cost of the energy generated by the plant.

“Our analysis shows that any power generated at the Khurja plant would likely be sold at Rs 5.67 per kilowatt hours, while renewable energy prices are about Rs 3 per kilowatt hours,” Buckley said.

He said the Khurja power plant is likely to increase air pollution over the national capital. A global air pollution report released by the World Health Organisation earlier this year had placed Delhi as the six worst polluted city after Kanpur, Faridabad, Varanasi, Gaya and Patna.

The IEEFA report has pointed out that THDC has itself diversified into the renewable energy sector with two wind power projects in Gujarat and an agreement with the Kerala State Electricity Board to develop a 50mw solar power plant in Kasargod district.

India’s renewable energy sector has nearly doubled over the past three years to reach about 69,000mw by March 2018, or 20% of total installed capacity of 344,000mw.

The National Electricity Plan released by the Central Electricity Authority in January this year projects renewable energy to expand to 275,000mw or 44% of total installed capacity of 619,000mw by 2026-27.

“The reality is that renewable energy is already cheaper than coal-fired energy — this is driving growth and utilities are turning away from coal,” said Kashish Shah, a research associate with IEEFA and coauthor of the report.

The THDC is also developing a 1,000mw pumped hydro storage facility which the IEEFA said will be of “immense value” in providing dispatcable peak-hour power supply as Uttar Pradesh adds more solar power into its energy source mix.