Power Demand - India needs coal, just as West needs oil and gas

GS Paper III

News Excerpt:

At last month’s COP 28 climate summit in Dubai, India and China, both countries strenuously opposed efforts to include a reference to “phase-out” of coal and altered it to “phase down”.


Coal vis-a-vis Oil & Gas:

  • Coal is the unglamorous fossil fuel. Unlike oil and gas, its prices do not fluctuate daily.
    • It, therefore, figures rarely in business news headlines, unlike the world oil and gas markets.
  • It is also not significant in the energy mix of developed countries, which rely largely on crude oil and natural gas.
    • On the other hand, it is hugely significant for emerging economies such as India and China, which need coal for a large share of their electricity production.
    • As a result, a stronger lobby in the developed world has ensured that oil and gas have been kept out of climate summit declarations.
  • Coal contains more carbon than oil or gas. When these fuels are burned, the higher amount of carbon in coal reacts to form CO2, while a higher proportion of hydrogen in oil and gas causes them to form H2O along with CO2.

Coal and the Climate summits:

  • Coal was specifically brought into a summit statement in 2021 by the Conference of Parties 26th meeting (COP26) in Glasgow.
  • COP28, held in the United Arab Emirates (UAE), closed with an agreement that signals the “beginning of the end” of the fossil fuel era by laying the ground for a swift, just and equitable transition underpinned by deep emissions cuts and scaled-up finance.
    • The declaration is considered historic, calling for a ‘transition away’ from all fossil fuels, including coal, oil, and gas, for the first time.
    • This is undoubtedly a positive step forward for reducing global emissions, but realistically speaking, it is not possible for India to suddenly put an end to its reliance on coal.

Coal - Indian Energy Choice:

  • Coal is the most important and abundant fossil fuel in India. It accounts for 55% of the country's energy needs.
  • Commercial primary energy consumption in India has grown by about 700% in the last four decades.
  • Driven by the rising population, expanding economy and a quest for improved quality of life, energy usage in India is expected to rise.
  • According to the coal and mines minister, in the next financial year, India will become self-sufficient in thermal coal as domestic production is set to top a billion tonnes and will rise further to meet future demand. In other words, coal usage will continue to be part of India’s energy scenario in the near future.

Coal “Phase down” initiatives taken by India:

  • Permitting foreign direct investment (FDI) up to 100 per cent under the automatic route.
  • Waiver of inter-state transmission system (ISTS) charges for inter-state sale of solar and wind power for projects to be commissioned by 2025.
  • Setting up ultra mega renewable energy parks to provide land and transmission to renewable energy developers to install large-scale renewable energy projects.
  • Schemes such as -
    • Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
    • Solar Rooftop Phase II, 12000 MW CPSU Scheme Phase II.
    • Production-linked incentive scheme under the "National Programme on high-efficiency Solar PV Modules.
    • Green Energy Corridor Scheme for Intra-State Transmission System.
    • Under the Solar Parks Scheme, the government has sanctioned 50 solar parks with an aggregate capacity of 37,490 MW in 12 states nationwide since 2014.
  • The non-fossil electricity capacity increased from 32.54 per cent in 2014 to 43.82 per cent in October 2023.

Way Forward:

India, the world's fourth largest carbon emitter, has extremely low per capita emissions, with only 2 tonnes compared to the global average of 4.7 tonnes. This is significantly lower than the US and Russia. Given India's low emissions and the push to improve renewable energy capacity, there should be no compunctions in the continual use of coal for the coming future.

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