India's huge development and energy challenges mean there are economic and development arguments for investing in new coal power plants for the foreseeable future.
More than 240m people in India have no electricity, and even for those who have, the quality is far below standards acceptable in developed countries. India’s residential electricity consumption lags behind the global average and is, according to the International Energy Agency (IEA), ten-times lower than that of OECD countries. For example, average residential consumption in Bihar state is around 50 kilowatt-hours (kWh) per capita per year, which equates to an average household use of a fan, a mobile phone charger and two compact fluorescent light bulbs for less than five hours per day.
Historically, the most important source of energy has been coal, which is abundant and affordable, making it ideal from a cost perspective as a fuel to expand energy access. The industry is also a major employer, with more than 1.5m people working in the coal sector.
As India diversifies its means of power generation, it is important to question whether it is genuinely possible to bring electricity to all households and also feed industry with intermittent renewable energy. Excluding coal from the energy mix is not a realistic option.
Indeed, renewables have an important role to play but coal remains the driving force behind electrification and industrialisation and, according to the IEA, will continue to make the largest contribution to electricity generation in India through to 2040.
The Indian government has been clear that all sources of energy will be needed to power up the economy, including coal. India’s ambitious renewable expansion will take place alongside (not in place of) growth in coal consumption. Coal per kilowatt is still far cheaper than renewables. However, this should not be a popularity contest – both are needed for the country’s development.
India has contributed less than 3 per cent of cumulative greenhouse gas emissions, and the reality is that, in as much as the country wants to contribute to climate action policies, it also needs to bring electricity not just to those not currently served but also to the millions more who are under-served. In the words of Harjeet Singh of ActionAid, development of coal resources “is not an obsession for India, it’s a compulsion”.
As it makes every effort to meet climate commitments, as well as provide energy access and security for its population, the government is transitioning to more efficient and cleaner technologies. To this end, it has planned that all inefficient thermal power plants over 25 years’ old will be replaced with modern, efficient and cleaner technologies. This involves what is known as high efficiency, low emissions (HELE) technologies. Several power plants currently producing around 11,000 megawatts are scheduled to be replaced within five years. We welcome and encourage this as a clear and achievable goal.
The recent news headlines suggesting India would suspend construction of new coal plants for the next 20 years sit in stark contrast to a national electricity report advising that additional coal-based capacity will be needed to fulfil India’s future electricity requirements. The World Coal Association encourages a plan to incorporate cleaner coal burning technologies into India’s energy mix in order to meet its huge development issues and ambitions.
That’s why projects like Adani’s Carmichael mine development in Queensland remain essential, because they will supply high-quality coal into India for use in modern HELE power plants. Indeed, Adani’s management has been clear that it sees the Carmichael project as part of an integrated approach across the company. Coal from Carmichael will be used to fuel Adani’s power plants in India.