India’s hunger for coal is alarming

Ashraf Engineer


Hello and welcome to All Indians Matter. I am Ashraf Engineer.

There was a stark dichotomy in India’s approach at the recently-concluded COP27 climate summit in Egypt. As the environment minister boarded the flight to Sharm-el-Sheikh, the finance minister made an announcement that seemed at odds with India’s stated objective of leading the world on climate action. Finance Minister Nirmala Sitharaman kicked off India’s biggest ever coalmine auction, with 141 new sites on the block, saying: “India needs greater investment in coal production.” Burning coal is perhaps the most polluting method of generating electricity. It’s not lost on anyone that our survival hinges on a drastic reduction of harmful emissions and that is precisely what the world’s leaders were trying to lay a roadmap for at COP27. It’s a strange way of doing things – you go about achieving decarbonisation while implementing the biggest ever push for domestic coal production. As things stand, coal accounts for 70% of power generation in India, while renewables account for 12%.


The auction I’m referring to was the sixth and largest the government has held since 2020. A majority of the sites allocated for mines, known as coal blocks in bureaucratic parlance, are in our most ecologically fragile spots and in tribal areas. These communities will be destroyed by the coal projects. The mines will lead to the loss of thousands of hectares of forests, affect the flow of rivers and displace tribals. Forests are sinks of carbon dioxide. So, it’s a double whammy when you chop them down in order to mine and burn coal.

These actions are at odds with Prime Minister Narendra Modi’s attempt to position himself as a global environmental leader. At a recent G20 meeting, he said: “India is committed to clean energy and environment.” Yet, we have the auctions and India has made it clear that it will burn coal for decades to come amid the push for renewables.

In fact, at COP26 in Glasgow last year, India made a late intervention to dilute the language of the agreement, changing the commitment to “phase down” rather than “phase out” coal power.

This year, India argued that coal is primarily used by developing countries while other fossil fuels widely used by western countries go unsanctioned. So, it argued, it’s unfair to single out coal.

India is the world’s second-largest importer of coal and its domestic reserves are thought to be the fourth largest. It has argued that it is necessary to use coal for self-reliance and energy security, and the demand for electricity is growing steadily to achieve socio-economic development. Besides, India argues, the Russian invasion of Ukraine has sent other fossil fuel prices soaring.

The fact that India is among the worst hit countries by climate change is not lost on anyone. You would remember the heatwave that destroyed crops and livelihoods earlier this year. In fact, there were extreme weather events on 80% of days in 2022.

What’s ironic is that multiple studies show that India’s current coalmines and coal-fired power stations are enough to meet the growing demand so long as they are operated efficiently. The coal shortages in the summer of this year were not due to lack of domestic coal but poor planning by power companies.

According to an analysis by Global Energy Monitor, on average, India’s coalmines use only two-thirds of their capacity and some large ones use only 1%. Our coal-fired plants run at 50% and 70% capacity even during peak demand. Factor in low tariffs and delayed payments, and what you have is an unviable and highly polluting business.

Incidentally, and I’ve spoken about this in earlier episodes, India’s coal is way more polluting than imported coal. This is because of its high ash content. This means that it requires twice as much Indian coal to produce the same amount of power as imported coal.

In fact, coal-based thermal power stations are responsible for over half of sulphur dioxide, 30% of oxides of nitrogen and about 20% of particulate matter emissions in India, according to a study last year by the International Energy Agency’s Clean Coal Centre. It sounded an alarm bell, recommending the implementation of emission norms at coal-based power stations immediately.

Instead, last year, India extended by two years the deadline for coal-fired power plants to install equipment to cut sulphur emissions. This was the third pushback on a commitment to clean up dirty air. India had initially set a 2017 deadline for thermal power plants to install the emission-cutting units. That was changed to varying deadlines for different regions ending in 2022, and now extended to a period ending 2024.

The Clean Coal Centre study recommended that India shut old coal-fired power stations and criticised the “lip service” of the Union Government about running cleaner power plants.

The government’s hypocrisy is apparent. It is committed to, as part of the 2015 Paris Agreement, to run cleaner advance technology. Yet, it is permitted for businesses in India to use less efficient technologies to burn coal.

As a result, we have a situation in which the push for new coalmines and burning more coal is coming at the same time as environmental regulations being watered down.

So, what are the numbers we’re talking about? Domestic coal requirement is expected to rise to 1,018.2 million tons by 2031-32 from 678 million tons in 2021-22, according to the draft National Electricity Plan by the Central Electricity Authority. Simply put, coal consumption will rise 40%.

There is an urgent need to speed up the renewable energy transition. India’s goal is to have 408 gigawatts of green energy by 2030. This is almost as much as its total installed capacity, fossil and non-fossil combined, at the moment. To achieve the goal, India will have to add 30 GW each year. For perspective, India has added 11.25 GW on average from non-fossil sources since 2018.

As a first step to enable the pivot away from coal, India needs to rethink import duties on renewable energy devices and components. India hiked this GST rate from 5% to 12% in October 2021, and imposed a basic customs duty of 40% on solar equipment effective April 1, 2022. While the objective was to reduce import dependence and encourage local production, India’s capability is short of its growing demand. A reduction in duties would speed up the reach for renewable energy goals.

Incidentally, not enough attention has been paid to wind power. India’s potential stands at 302 GW, but our installed capacity is only 39 GW.

The other challenge is our weak transmission grid. This is worsened when the power projects are in remote areas, far from the large consumption centres. The weak transmission grid is why the 7.5 GW solar project in Leh was cancelled in 2021.

So, the conclusion is clear: India must rethink its dependence on coal. Far from being cheap and reliable, it is usually costlier than necessary and available in smaller quantities than needed. It might be the easier option, but to believe that only coal can fulfil India’s power demand or provide energy security is a fallacy.

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