As COP28 Approaches, India’s Coal-to-Clean Commitments in Jeopardy
It remains to be seen if India will agree to an aggressive coal phase-down
With a fortnight to go for COP28 in Dubai and when some 60 nations are said to be working on a deal to triple renewable energy capacity targets until 2030 and move away from coal, India’s coal-to-clean commitments are in danger of coming apart.
There is still no word on whether India would back the deal, but it has left no one in doubt on where it stands on coal. Reports say the U.S., EU, and UAE want India and China to say yes to the deal, given that the two countries are not doing enough to phase down coal.
In September, under India’s presidency, the G20 group of nations had pledged to accelerate efforts to phase down unabated coal power in line with national circumstances.
India’s Power and New & Renewable Energy Minister R K Singh has now said India cannot be pressured into reducing its coal usage to generate electricity.
“COP-28 is going to be held in UAE. There is going to be pressure on nations at COP to reduce the usage of coal. We are not going to do this since our point of view is clear that we are not going to compromise on the availability of power for our growth, even if it requires that we add coal-based capacity,” he recently told a conference of power ministers of states.
Singh’s comments to the conference come in the wake of a series of moves by the Ministry of Power this year to increase coal-based thermal power generation capacity. At the same event, Power Secretary Pankaj Agarwal said India would likely add 10 GW of thermal capacity this financial year and a renewable capacity of 21 GW. He also said up to 75 GW of additional coal-based fleet would be required by 2031-32 to cater to the fluctuating demand impacted by extreme weather events.
Last month, the government directed all coal-based plants to increase the imported coal blending limit from 4% to 6%, besides extending the validity of Section 11 of the Electricity Act until June 2024. The Act mandates that a generating company must, in extraordinary circumstances, operate and maintain any generating station in accordance with the government’s directions.
Karnataka, which has been facing a big power deficit, too invoked the emergency provision in October.
Early this month, the Power Ministry sent out an advisory to the states to encourage generating companies under their administrative control to take over stressed thermal power assets of over 6 GW by participating in the Corporate Insolvency Resolution Process. These stressed power assets are of commercial significance to the capacity addition plans of the states.
India’s pedaling back on phasing down coal commitments reflects the difficulty in meeting the country’s galloping power demand. States have been told to run power plants at full capacity, even as coal stocks at several units are bottoming out. The Central Electricity Authority has forecast an all-India peak power demand of 256.53 GW in the financial year 2024-25, rising sharply from 2023-24 when a peak of 240 GW was witnessed.
The rising power demand has coincided this year with a drop in renewable generation, mainly hydroelectricity, following a weak monsoon.
India has targeted 50% installed power capacity from non-fossil fuel sources by 2030, but thermal generation still continues to be India’s mainstay. Between April and September this year, thermal contributed 72.83% to the overall generation, as against 24.15% from renewables.
Understandably, India is prioritizing meeting national priorities over rushing to achieve its energy transition goals. India’s economy is growing at a fast pace, and any disruption on the power front can cause a setback.
“Being prudent and thoughtfully planning out the energy transition to avoid disruptions to power supply and higher energy costs is not a bad thing. However, the transition to renewables should be a top priority to avoid losing out on the incredible opportunities they represent,” said Raj Prabhu, CEO of Mercom Capital Group.
Many countries, especially in Europe, have had to reset their coal exit plans after the Russia-Ukraine war in 2022. Crippled by the stop in Russian gas supplies, Germany had to reconnect a few coal-fired power plants to the grid to keep its economic engine running. France followed suit.