Bengaluru: India is on a renewable energy hyperdrive.
A report published on May 8 found that in 2023, India overtook Japan to become the world’s third largest solar power generator. Another recent report showed that in the first quarter of 2024, coal’s share of total power generation capacity in India dropped below 50% — for the first time since 1966. In 2024 alone, India has also issued at least 69 gigawatts (GW) worth of renewable energy tenders: far higher than the union government’s annual target of 50 GW.
But as hope-instilling as India’s renewable energy push may be, there’s more to the picture. The country is commissioning new fossil fuel-based power plants, and especially so over the last couple of years — as several recent reports show. We’re also reviving stalled projects, and expanding existing ones.
Understandably, India needs more coal for all these power plants, hence, the country’s coal production has increased over the last fiscal year, and so have coal imports.
So what’s with these seemingly contradictory findings? Why is India pushing for more renewable energy, but also promoting coal-based power plants and increasing coal production and imports at the same time? Some scientists told The Wire that they wouldn’t worry much about the commissioning of new coal-based power plants because many of these plants stagnate at the commissioning or installation stages. But some others are not convinced: renewed action to promote new coal-based power plants can be detrimental for the country and its people because there are serious concerns of such plants turning out to be “stranded assets” — infrastructure that are inefficient, can no longer be used and become liabilities instead, they told The Wire. Moreover the “narrative” that India is short on power resources stems entirely from mismanagement of existing coal resources, they added. It will be crucial to take urgent steps to develop and implement methods to efficiently store renewable energy so that it becomes a reliable source of power to replace coal in future, experts said.
These developments also come at a time when Science is making it increasingly clear that India cannot afford more coal-based power being installed, due to the impacts of both coal extraction and the burning of the fossil fuel on the environment (such as loss of biodiversity and increased air pollution) — and the impacts, in turn, on people’s health, as well as the rights and livelihoods of local communities.
India is third-largest solar power generator
First, the good news.
India is on a solar power generation spree. In 2023, it overtook Japan to become the world’s third largest solar power generator, as per a report released on May 8 this year by global energy think tank Ember. India ranked ninth in solar power generation in 2015.
This spurt in installing and generating renewable energy is in line with India’s international climate change mitigation pledges. As per our latest Nationally Determined Contributions submitted to the United Nations, India aims to ensure that 50% of the country’s electricity generation will come from non-fossil fuel based sources by 2030.
And more good news has been coming in. A recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) found that in the first quarter of 2024, coal’s share of total power generation capacity in India dropped below 50% — a first since 1966. The report also showed that India issued at least 69 gigawatts (GW) worth of renewable energy tenders in 2024 alone. This overshoots the union government’s target of 50 GW of renewable energy to be commissioned every year, the report noted.
…but we’re still pushing for coal-based power plants
The Indian government, however, continues to push coal as its mainstay for power generation. And coal is crucial as it meets around three-quarters of all of India’s electricity demands.
India is not only reviving stalled coal-based power plants and expanding existing ones, but also commissioning brand new fossil fuel-based power plants. The Indian power ministry told Reuters in February this year that the country will start operating new coal-fired power plants of a combined capacity of 13.9 gigawatts (GW) this year alone. This is the highest annual increase in at least six years. India plans to add at least 53.6 GW of coal-fired power capacity by March 2032; this is in addition to the existing plants of 26.4 GW currently being constructed, as per the Reuters report.
For a few years, till the end of 2022, they saw a declining trend in new coal-based power plants coming online in the country, said Sunil Dahiya, researcher at the Centre for Research on Energy and Clean Air (CREA). However, India is definitely moving away from this trajectory, Dahiya told The Wire.
Also read: How Changing Climate Could Impact India’s Renewables Journey
Expansions and revival of stalled coal-fired power plants continue, and have picked up pace in recent years. A report by the Global Energy Monitor (GEM) and CREA and co-authored by Dahiya in August 2023 found that three non-captive coal plant expansions (amounting to 3.9 GW) received permits in the first five months of 2023 alone, up from zero the year before. It also found that seven other coal plant proposals (a total of 7.6 GW) also moved ahead with regards to their permits by receiving their terms of reference. Two new coal plants (2.9 GW) appeared under consideration for the first time in 2023 too.
Private players are also hoping to cash in on this push for coal-based projects. Adani Power, JSW Group and Essar Power are among the companies that have told India’s power ministry that they would be keen to expand old plants or develop stalled projects facing financial stress, according to sources and a government presentation quoted by Reuters in a report in March this year. Commissioning new plants, expanding existing ones, and reviving stalled ones will continue to occur – and perhaps even increase – as per several of these news reports and studies.
Coal production and imports at a high
More coal-based power plants means that we need more coal to fuel them.
India’s coal production continues to rise. As per latest data published by the Ministry of Coal, the country’s coal production reached 997.4 million tonnes in the fiscal year 2024. That’s a whopping 11.6% increase from the previous year (893.19 million tonnes). Of this, Coal India Ltd (CIL) alone produced 773.6 million tonnes. The government-run company also recorded an increase of 10% year-on-year of coal production.
India’s coal imports have increased too. As of March 2024, India’s total coal import was 261 million tonnes, the highest in the last three years.
And there’s fraud here as well, suggests an investigative report by the Organised Crime and Corruption Reporting Project (OCCRP) published on May 22. The OCCRP obtained documents (later shared with the Financial Times) that suggest that at least 24 shipments of coal belonging to the Adani Group that arrived in Tamil Nadu between January and October 2014 were originally priced as low-quality coal (of less than 3,500 kilocalories/ kilogram, which was sourced from Indonesia). However, the Adani Group sold the same coal as high-quality coal (of higher calorific value, at around 6,000 kilocalories/ kilogram) to the state’s power company – the Tamil Nadu Generation and Distribution Corporation – for triple the cost, per the OCCRP report. Along with the huge loss to the public caused by the fraudulent deal (which meant that citizens bought electricity at far higher costs than they should have), the burning of low-quality coal is also known to be more polluting, and thus, more damaging to both the environment and human health.
In March this year, the Ministry of Coal observed what they called a “notable increase” (a staggering 94.21% increase, actually) in coal imports by imported coal-based power plants from April 2023 to January 2024, when compared to the corresponding period in the previous year. The Ministry put it down to the huge drop in import prices of coal during the time. In April this year, the Ministry ordered all coal-based power plants fueled by imported coal to run at full capacity till October 15.
So coal is here to stay — for some time at least.
In an interview to MoneyControl in January this year, Prahlad Joshi, Union Minister for Coal, Mines and Parliamentary Affairs, said that the government will “continue increasing coal production even beyond 2030,” citing India’s huge surge in power demands, something that is also predicted for the coming years.
“There is no question of any reduction in coal production after 2030. For the next 40 years at least, coal is going to stay (as a key energy source) in India,” Joshi told MoneyControl.
India, while on its way to increasing its renewable energy power generation, is also not cutting back on coal mining and imports, or halting the commissioning of new coal-based power plants. Experts say that while it may look contradictory, both coal and renewables will have to go hand in hand for some time until issues such as storage of renewable power are addressed to ensure that renewable energy becomes as reliable as coal. However, commissioning new coal plants is just not the way to go, some added.
‘Issue is not power shortage but mismanagement’
According to Dahiya, the “narrative” — that we need more coal-based power plants and therefore more coal — is something that has been pushed forward by the Indian government citing surging energy demands especially during the summer when there is a huge demand for more electricity to power fans and other cooling systems such as air conditioners. The government has cited power shortages during such seasons to commission more coal-based power plants and even permit coal mines to hike production without a fresh environmental impact assessment or public consultation, as The Wire Science reported.
“However our analysis showed that it was not a power shortage because of a limitation of power generation capability, but a management crisis because power plants did not stock up enough coal,” Dahiya told The Wire.
And we don’t need any new coal-run power plants either, according to Dahiya. He pointed out that the Central Electricity Authority (CEA) in its 2018-19 report had explicitly mentioned that India does not need any new coal-based power plants to come up apart from the ones which are already in different stages of the pipeline. However, officials doubled back on this stand, Dahiya said. The latest Electric Power Survey, National Electricity Plan as well as the report on Optimal Generation Mix, all recommended that India build more coal-based power plants.
As per the Centre for Research on Energy and Clean Air-Global Energy Monitor (CREA-GEM) report in August 2023 that also analysed the five-year projections in India’s latest National Electricity Plan (NEP), “more than 8 GW of non-captive coal-fired power plant capacity in active construction is unnecessary, and all 34.9 GW of the pre-construction capacity is also not needed.”
The story of stranded assets
When it comes to reviving stalled projects, it makes sense to revive power plants that are new, and whose construction is almost over, Dahiya told The Wire. But there is a lot of wastage of public money where older, less efficient power plants are sold to new buyers for far lower costs than they were built with initially, he said.
Such “stranded assets” – infrastructure that is inefficient, can no longer be used and becomes a liability instead – are a “waste of public money”, Dahiya said.
“We are tracking numbers: this year alone around 2.7 GW of new coal-based power plants came into the permitting process,” he said. “So we are definitely seeing signs that coal is coming back strong in India after early signs of a declining trend before 2023. That puts us in danger of another wave of stranded assets down the line.”
Per the GEM-CREA report, the National Electricity Policy (NEP 2023) shows that India’s coal power capacity that is currently under development exceeds estimated electricity requirements for both 2027 and 2032. Moreover, India’s coal resources are also high: mining capacity, as of 2 years ago, was 2.4 billion tonnes (this included mines which have already received environmental clearances and at various stages of development), Dahiya said. So if more mines are added, there’s a “very high likelihood” of a stranded asset wave sweeping across the coal mining sector as well, with India’s push to add more coal mines to its existing network to cater to power demands.
“Ultimately…forests will be destroyed, and the traditional livelihoods of communities will be destroyed too,” Dahiya told The Wire.
However, if we add 300 GW of renewable energy as we plan to over the next six years, that itself has the potential to meet the growth in power demands in the coming years, Dahiya said.
“The biggest premise for this to happen is to install 50 GW of RE every year. If we do that systematically every year, our analysis says that by 2027, India’s coal consumption will peak and then start declining. But this might also not happen because we have seen that India makes sweet promises on installing RE but doesn’t meet those deadlines. That might lead to a delay in the peak of coal consumption.”
Incidentally, India failed to achieve its target of installing 175 GW of renewable energy capacity by the end of 2022.
To worry or not?
The announcements about building new coal-based power plants, however, is not something he would worry much about; mere announcements don’t mean actual commissioning, said Sandeep Pai, director of Swaniti Global.
That’s because most of the announcements don’t actually mean that new coal-based power plants would be built, he told The Wire. Moreover, for the new coal-based power plants that are indeed being added to India’s kitty as per these reports, other older and more inefficient ones might be wound down, said Pai, who has studied several aspects pertaining to the coal industry, from its importance as a livelihood generator, to policy in the context of climate change and just transitions. If the new coal plants are more efficient due to better and improved technology they are better than the current older ones as they will be better for the environment, people and their rising needs.
One factor that elevates coal as a crucial resource is its reliability: a stark contrast to the unpredictability of green energy. Solar power is available only during daylight hours; wind power generation is seasonal. Like wind power, hydropower (which is considered a clean and green energy source in India despite numerous impacts such as the displacement of people, arresting environmental flow of water and more) also varies across seasons due to changes in rainfall patterns. With increased impacts of climate change that often affect rainfall patterns, the unpredictability of hydroelectric power is only likely to get worse.
Storage is key
That’s why developing and implementing storage of renewable energy is crucial for India. And currently, there is no efficient provision to do so.
India’s power demands are very high but the quantum required to shift demands from fossil fuels to renewable energy will take time. So till the time large-scale energy storage systems are deployed, coal capacity addition is happening — but this is a temporary phenomenon and soon these assets are at risk of being stranded, said Vibhuti Garg, director – South Asia, IEEFA.
Developing batteries for storage — mostly lithium, but also sodium ions — is in the process, says Garg.
And there has been some progress recently, Garg told The Wire. “The government is releasing FDRE tenders to develop storage for hydro and green energy.”
In firm and dispatchable renewable energy (FDRE) power, energy storage systems help transform variable renewable energy into FDRE, which ensures that consumers receive power round-the-clock.
Also read: India’s Energy Subsidies High; Fossil Fuel Subsidies More Than Renewables: Report
It appears that FDRE systems may be deployed in less than a year, Garg added, the government is also encouraging domestic manufacturing of batteries.
Garg, however, is clear that India has to stop commissioning new coal-based power plants.
“This is something we should ideally not be doing at all,” she told The Wire.
In fact, a 2021 study is categorical about this: there is no economic case either for new coal plants in India, it noted. “By 2025, the cost of electricity from renewables with storage will be comparable to the domestic social costs of the cheapest new coal plants,” it said.
As per the study, “Indian policymakers should start preparing now for this eventuality, especially with policies to re-employ and compensate workers in coal and related sectors who will have to find new employment.”
Investing in modernising the grid, and investing in battery and other storage options to further renewable energy and its storage and use, will be more beneficial than investing in coal projects, according to Dahiya. “Renewable energy plus storage is definitely the way forward… If we manage our already existing coal and gas resources well, if we install renewable energy at a pace that is required, and modernise the grid so that electricity can be transferred from one place to another, we can meet all our projected energy demands.”
The one thing limiting renewable energy right now, Dahiya said, is the cost of storage.
“But if we include all the costs of coal — the social costs, environmental costs, health costs, livelihood costs — the cost of coal is too high. Public health has definitely got a back seat when it comes in competition with coal.”
Why this matters: Health, environment, rights
Science has shown — and continues to show — that coal-based power plants, while contributing to India’s carbon emissions, also have a big impact on citizens’ health.
A November 2023 report by the Delhi-based Centre for Science and Environment (CSE) found that coal-based thermal power plants contribute around 8% of particulate matter (PM) to the air in the Delhi-NCR region. Particulate matter is a major air pollutant that is released when fossil fuels are burnt. These carbon particles (ranging between 2.5 and 10 mm in diameter) can lodge in peoples’ lungs causing varying health conditions and diseases — including cancers, respiratory illnesses and more.
Just as the current government has come under fire for diluting environmental norms and weakening existing legislations pertaining to forest protection in recent times, there also arise numerous questions regarding dilutions in environmental policies and norms around the running of thermal power plants too, delays in the implementation of norms and inability on the government’s part to ensure compliance.
For instance, as per the CSE report, of the 11 thermal power plants in the Delhi-NCR region, three exceed particulate matter norms mandated by the government. Four of the 11 plants — three in Haryana, one in Punjab — exceed nitrogen oxide emission norms. Nitrogen oxide is another air pollutant that also causes respiratory illnesses.
Sulphur dioxide is another pollutant that power plants emit. However, as per the CSE report, only two of the 11 plants in the NCR region have sulphur dioxide control measures in place, and only one meets existing emission standards for this pollutant.
“[Sulphur dioxide] is a reactive gas and converts to sulphates in the form of fine particulate matter — PM2.5 — which poses even a greater risk to health and environment,” said D. D. Basu, former director of the Central Pollution Control Board, in the CSE press release. “Therefore, control of SO2 [sulphur dioxide] is crucial from the perspective of controlling particulate matter emissions.”
As per the report, while the Union Ministry of Environment, Forest and Climate Change introduced strict emission norms for coal-based power plants in December 2015 which were to be complied within two years, these have been diluted for several parameters. The deadlines have been repeatedly extended in 2017, 2019 and 2021. As per the latest deadlines, different categories of power plants (categorised based on their polluting levels) need meet sulphur dioxide emission norms only by December 2024, 2025 and 2026.
The lack of crucial data pertaining to power plant emissions that has to be placed in the public domain is another concern: per the CSE report, five of the 11 plants have a “poor status” when it comes to this.
The process of coal extraction too comes at huge prices to the environment, peoples’ health and indigenous rights as well. Apart from the ecological concerns of biodiversity loss and the degradation of natural systems that coal mining causes, pollution goes hand-in-hand with coal extraction. Studies such as this one from the Talcher coal mines of Odisha show that coal mining pollutes both surface and underground water resources in the area. Jharkhand’s coal mines, meanwhile, are symbolic of the social, cultural and livelihood losses that indigenous communities face due to the loss of forests that they depend on for both sustenance and livelihood.
