Coal-based Power Plants are Very Much on in India despite Environmental Risks

---

---

The National Electricity Policy (NEP) published by the Ministry of Power, the Government of India recognizes electricity as the basic infrastructure needed for India’s socio-economic development. It identifies the need for a healthy supply of electricity at reasonable rates to enable the growth of industries and enhance their competitiveness.

In India, the demand for electricity has constantly outstripped the growth of electricity generation often leading to substantial energy shortages in the country. Power industry analysts attribute this to the inadequacies in generation, transmission and distribution, as well as inefficient use of electricity.

Electricity is a capital-intensive business with long gestation periods and the resources for its generation are unevenly spread in India. Electricity cannot be stored in a grid. Demand and supply have to be continuously balanced and its distribution and demand have to be met in the best possible ways.

For a long, India had been meeting its electricity demand through coal plants, on average coal-based electricity generation accounts for around 75% of India’s total electricity generation. Therefore, coal continues to play a pivotal role and is a major source of revenue for state governments as well as the central government.

Well, India had ratified the Paris Agreement on climate change which mandates it to cut down its carbon dioxide emissions to keep global average temperatures rising above 1.5°C.  India is responsible for around 7% of the world’s carbon dioxide emissions. To reduce this carbon emission intensity the country needs to switch from coal-based power generation to renewable energy-based power generation.

This means that by 2030 at least 40% of the country’s installed electricity capacity should comprise of non-fossil fuels, and for this India needs to produce 100 GW from solar, 60 GW from wind, 10 GW from biomass, and so on.

Although India has set an ambitious target of 175 GW of installed renewable energy capacity by 2022 and renewable energy prices are also falling simultaneously, the country isn’t giving up on coal entirely. It is planning to build new coal-fired plants as they generate cost-effective electricity, as per a draft electricity document accessed by Reuters.

This is happening notwithstanding the concerns of environmentalists regarding coal usage. Climate activists have been advocating against adding new coal plants to reduce carbon footprint and safeguard the environment. Solar and wind energy prices are currently at record lows prompting many to voice their sentiments to government and industry stakeholders to switch from coal to renewable sources.

According to the draft NEP 2021 which is yet to be published, India is likely to add coal-fired capacity albeit with more stringent technology standards to curb pollution. It notes that although the government will keep promoting renewable sources of energy, usage of coal shall continue as it is an economical option.  

NEP 2021 also highlights that future coal-based plants would use “ultra-supercritical” less polluting technologies. The union government is endeavouring to revise the electricity policy that was enacted in 2005. Back then renewable energy was probably unheard of but that is not so now.

Experts warn that discontinuation of coal-based energy generation should be done in phases, else it could have detrimental consequences and lead to instability in the electricity grid causing blackouts. NEP 2021 suggests flexible use of coal-fired and natural gas-fired electricity to ensure grid stability.

It suggests expediting the adoption of economical pumped hydro storage to support the electricity grid. The policy further recommends compensating natural gas-fired plants for operating at reduced efficiency to ensure grid stability.

While the country may have to continue with coal for some more decades for technical reasons, the decision-makers also know any hasty decision that will hurt the sector beyond a certain limit will be a doomsday for the financiers who have lent trillions of rupees to it. No country can afford to disturb its economy in such a fashion and manner without taking into account the likely negative consequences.

Beyond all its rosy looks the other side is just a testing ground, at least for now. Issues are several and so many tricky situations need to be tackled with utmost caution. Devising a clear perspective that will fine balance the need of the hour without losing sight of a long-term goal alone will decide the success of the programme here.

Thus, giving an impression of viability to renewable investors over the conventional coal-fired power sector might require much more homework, especially to make electricity generated from renewable sources look like a viable option, technically, technologically and economically.

Although the intent of the government looks clear, it still needs to go a long way to fulfil its renewable energy dreams completely.

---