In the last few years, India has made record strides in adopting solar energy everywhere, from trains to traffic lights and even airports. The rush for solar power has accompanied a mission to electrify every village by 2018 – a target which has already been met by up to 77 percent. India’s actions on renewable energy mean that the country will effortlessly meet its emissions intensity targets under the Paris Convention, as part of its Nationally Determined Contribution (NDC).
However, the draft National Energy Policy underlined one energy source whose importance has not changed to match the times – that of coal. Despite solar power becoming cheaper than coal, India still plans to double coal production by 2040.
To be put to use, coal must be burned. Every ton of coal that is burned releases 2.86 tons of CO2. In 2015, India emitted over 2.47 billion tonnes of CO2 – 47 percent of which came from coal-fired power plants.
In perspective, renewable energy sources (wind, solar, biomass, waste-to-energy) contribute only about 15 percent of India’s energy needs (figures from October, 2016). As a share of primary energy, this was only three percent of the country’s needs in 2012.
To add to the problem, India runs ageing coal plants whose emissions are far above international norms. Attempts to modernize these have yet to find fruition. The coal industry is shutting down plants and projects. But the plan, on paper, is still to build more of them.
The reality is that India is still on track to increase its carbon emissions exponentially. The draft National Energy Policy has forecast a future where fossil fuels continue to power the vast majority of over 1.3 billion lives.
A change of plans
The draft NEP document has two forecasts in mind for coal consumption – Business As Usual (BAU) and “Ambitious”. The plan calls for the addition of 300 GW of capacity to the coal industry by 2040.
In late 2016, another draft was released on India’s energy policy – this one by the Central Electricity Authority. It stated that India wouldn’t need to build any new coal plants until 2027. That is to say, those that are already under construction should suffice.
The NEP is not the country’s first U-turn on coal. In 2015, the Central Government set a target of one billion tonnes of domestic coal production by 2020 – in a bid for greater energy security and independence. But when India’s coal plants started producing to capacity, they ended up with stockpiles of coal they didn’t need. This prompted the government to roll back the target.
But the coal industry has taken up the challenge. A June 2016 Public Works Commission (PWC) report mentions a 1.5 billion ton target for 2020.
It helps to consider why India can’t shake off coal that easily. For one, a large part of its energy consumption is not from electricity. Many Indians continue to get their heat and energy needs from open-air burning of wood, coal and biomaterials. Replacing their primary energy source will take more than just solar-generated electricity. But biogas production simply doesn’t achieve the same scale as coal production does.
The draft NEP is, ostensibly, a sign of policy to come. But it also serves as an insightful indictment of the current state of electricity supply in India – a tale of underutilized capacity, unmet demand with excess production, and a Discom industry that is struggling to turn a profit with dropping prices.
All said and done, according to the NEP, by 2040, only 7-10 percent of energy is forecast to come from renewables.
Nuclear energy contributes only three percent of India’s energy needs. But investments in nuclear energy are part of a long-term plan. Essentially, current reactors utilize uranium, which needs to be imported. But over the course of a three-stage atomic energy program, they can be made to run on thorium. The benefits of thorium are many – India is abundant in it, it can’t be weaponized or trigger a reactor meltdown, and the country is a world-leader in its use and research.
But this is a long shot, one that’s aimed at targeting energy needs in 2200. As the document states:
The development of Fast Breeder Technology enables exploitation of a large part of the fuel energy through closed fuel cycle, thus offering large sustainable energy sources for many centuries.
Altogether, the NEP has 2040 in mind. It predicts a time where every Indian accesses and uses electricity, where burning biofuels has declined and where per capita energy consumption begins to approach that of the developed world. What it doesn’t satisfactorily account for is the likelihood of renewable technology getting better, cheaper and more lucrative in the coming years.
Coal is a bad investment. The plan to double production will see new plants built after 2027 – an uncertain time frame, where the returns on coal will be even less than they are today. Renewables can’t solve all of India’s problems, but they can play a bigger role than the NEP has foreseen for them.
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