As countries around the world gather for the UN’s crucial COP26 summit to discuss their efforts to combat climate change, invariably including international pressure to phase out fossil fuels, an ongoing energy crisis has left developing countries like India scrambling to acquire more coal.
Power cuts and warnings of extended blackouts as a result of the potential coal shortage in Asia’s second-fastest growing economy has been yet another reminder of how heavily India relies on coal for its electricity generation even after making great progress in the direction of renewable energy.
Over two thirds of India’s electricity is still generated by coal-fired thermal power plants. India is the second-largest producer and consumer of coal after neighbouring China, which relies upon it for a little over half of its energy.
The burning of coal to generate electricity is responsible for 40 per cent of all global carbon dioxide emissions from fossil fuels, and mining it comes with a host of environmental hazards to the local area. Experts are clear that if global warming is to be kept below 2°C – the target of the Paris Agreement – the use of fossil fuels needs to dramatically scaled down.
When the leaders of 197 countries gather for COP26 in Glasgow from 31 October to talk about their plans to rein in extreme climate change, there will be a stronger push for large economies like India to commit to more ambitious climate goals amid competing interests between developing and developed countries.
It has been confirmed that India’s prime minister Narendra Modi will be attending the summit, boosting hopes that India will use this platform to announce more ambitious climate action plans.
According to its 2015 Nationally Determined Contributions (NDC) under the Paris Agreement, India has set a target of reducing emissions intensity relative to GDP by 33 to 35 per cent by 2030 from its 2005 level, to achieve about 40 per cent of its electricity from renewable sources and enhance its carbon sink by planting trees.
While India has been able to create the fourth-largest capacity of renewable energy anywhere in the world, this does not automatically mean India will be ceasing coal combustion anytime soon. Phasing out coal — India’s cheapest source of electricity at present — will still have major implications for the country’s economy.
The partly government-owned Coal India Limited provides about 85 per cent of India’s domestic production of coal and is is the world’s largest coal mining company, contributing both direct revenues to the government and support to millions of people who depend on the sector for jobs and pensions.
“Coal is deeply entrenched into the national economy [of India] and more so when we look sub-nationally with the mining and utilisation lens,” Dr Rahul Tongia, a senior fellow at the Delhi-based think tank Centre for Social and Economic Progress (CSEP), tells The Independent.
The government recently announced India would reach the target of 175 GW renewable energy generation by 2022, sounding hopeful of comfortably meeting the 2030 target of achieving 450 GW of renewable energy installed capacity including nuclear and large hydropower by 2030 under its NDC pledge.
However, according to WRI India’s Climate Programme Director Ulka Kelker, the 450GW target “is not an easy one” for India.
“It requires India to triple its RE [renewable energy] capacity in less than a decade,” she says. “Even though renewable energy has become cost-competitive compared with coal, this 450 GW target will require substantial investments, land, and the right pricing and financial incentives.
“India could consider including this domestic target in its next nationally determined contribution (NDC) under the Paris Agreement,” she adds.
Currently, India’s installed non-fossil fuel capacity is 39 per cent, close to its NDC target of 40 per cent, with the rest still coming from fossil fuels. It seems impressive, but installed capacity refers to maximum generation the given infrastructure is capable of, rather than actual power produced. Since generation from renewables like wind, hydro and solar varies depending upon the speed of the wind or visibility of the sun, the output remains erratic.
Dr Tongia suggests India will have to adopt a “holistic approach” for a smooth and timely transition. “Pushing off structural changes as well as avoiding transparent accounting until later on will only make the problem that much harder in the future,” he adds.
There’s another concern of cost-efficiency with renewable sources, since storage becomes a key factor. While coal is currently the cheapest energy source, the cost of renewables and battery solutions is steadily reducing – meaning that even from a business perspective, reducing the amount of coal in India’s energy basket makes sense.
“Not only are renewables becoming cost-competitive compared with coal, it is also getting a policy push due to India’s renewable energy targets,” Ms Kelkar says.
“Some Indian states like Gujarat, Chhattisgarh, Maharashtra, and Karnataka have announced that they will not build new coal power plants, as have major public and private electricity companies including India’s largest power utility National Thermal Power Corporation (NTPC),” Ms Kelkar adds.
Such a transition cannot happen overnight, and indeed there are still coal power plants being built today. Despite the push for renewables, India is one of the three countries with the largest number of planned coal power plants in the world, after China and Indonesia.
India has the world’s fifth-largest proven coal reserves – enough to last it for more than a century, it says. And despite Mr Modi’s expressed goal of establishing the country as a global leader in green energy, the fact is that India’s energy needs are growing at a rapid rate.
India is already the third-largest carbon emitter in the world, contributing 7 per cent of global emissions in 2019, after China and the US which are responsible for 27 per cent and 14 per cent respectively. Unlike those countries, it hasn’t committed to a target year for achieving carbon neutrality, citing a desire not to curb the development ambitions of its 1.3 billion or so people.
India is expected to take over China as the world’s most populous country by 2027, and up until now making electricity more available to its massive population has been a key policy goal for the government. A village in remote Manipur officially became the last in the country to be linked up to the national grid only in 2018 – though coverage remains patchy.
As things stand, India’s per-capita electricity consumption is just a third of the global average. Bringing more power to more people will be an inevitable factor in developing the country as a whole – and energy affordability will continue to be a key consideration while this remains the case.
All this is to say that, despite the international pressure to keep it in the ground, even if the proportional share of renewables increases in India in the coming years, experts believe the total amount of coal burned will not see a peak anytime soon.
“The growth rate of electricity from coal has certainly come down, but it’s premature to consider a peaking of coal-fired power. Coal dominates electricity production today,” Dr Tongia notes. “Even under scenarios of very high RE [renewable energy] penetration by 2030, India may just about reach the plateau of its coal generation around then.”
The patchy nature of many renewables means that a lot of developed nations are utilising other non-coal fossil fuels like natural gas to help smooth their energy transitions. This is simply not possible in a country like India that does not have these reserves, says Dr Tongia. “The UK and US reduced their coal consumption not predominantly because of the rise of renewable energy but because they had access to a cheap source of natural gas, which India lacks,” he says.
He suggests that a more realistic goal for India might be to reduce pollution and emissions by improving the efficiency of its coal-fired power systems instead of getting rid of the resource completely. Dr Tongia says in a few years, India will have “to figure out whether it requires new coal capacity beyond the few tens of gigawatts under construction already.”
While this decade is going to be a formative period for India to bolster its capacity for green energy, it will also have to deal with a host of challenges, including greater spikes in power demand for cooling as a result of the warming climate. “India’s ambitious RE targets will require storage technologies after a few years,” Dr Tongia says, adding that the rising demand will also “drive the need for not just new electricity per se, but electricity at the right time in a firm or dispatchable manner”.