Why India can’t live without dirty coal

Spanning over 14,000 acres and built with an investment of more than ₹10,000 crore, there are 10 million of these blue solar panels in what is now called the Bhadla Solar Park. The panels can generate 2.25 gigawatt (GW) of electricity, sufficient to light up over one million homes. Bhadla is the largest solar park in the world and gives a sneak peak into the future of electricity generation—clean and green.

Nearly 1,500km away, in Bundelkhand, one of the most backward regions of India, is Singrauli. This sleepy little town is situated near the tri junction of three major states—Uttar Pradesh, Madhya Pradesh and Chhattisgarh. Singrauli has the state-run NTPC’s Vindhyachal Thermal Power Station. Set up in 1987, it went through many rounds of expansion. Its last expansion came in 2015, the same year when Bhadla Solar Park was being set up. Today, Vindhyachal Thermal is the largest power station in the country producing 4.76GW of power, more than double of Bhadla.

The mesh of concrete and steel juxtaposed by many chimneys that bellow black smoke high up the skies underline its scale but it’s a bit of an eyesore. Also, producing electricity by burning coal is shunned upon by many with the war on climate change being fought on multiple fronts.

Coal-based thermal power plants are responsible for a disproportionately higher share of emissions than the industrial sector. The Central Pollution Control Board of India (CPCB) has categorized such power plants as highly polluting.

While India has embarked on a massive investment spree to ratchet up its renewable power capacity to 500GW by the turn of this decade, which would mean many more solar parks like Bhadla, the sobering reality is that the needle will still not move substantially away from thermal power plants like Singrauli.

“The Central Electricity Authority, vide an advisory dated 20.01.2023, suggested that no retirement or repurposing of coal-based power stations will be done before 2030 considering the expected energy demand scenario and availability of capacity in future,” said union power minister R K Singh in a written reply to a question in the Parliament on 8 August. “Thermal power plants were also advised to implement renovations and modernization and life extension of their units for running up to 2030 and beyond, or operating in two shift mode to facilitate solar and wind energy integration into the grid, wherever feasible,” he added.

Despite the bad optics, India would need to not just keep burning coal but open up more mines and burn even more coal to feed its ever-growing need for electricity. In mid-September, at an industry event, Singh went on to suggest that India would need to add nearly 30GW of thermal power capacity over and above the 49GW of capacity already under construction during the course of this decade. This would take the overall thermal power capacity from 212GW today to nearly 300GW by 2030.

Why is it so difficult to reduce the dependence on the black rock? Growing appetite for energy, changing weather patterns, unskilled and low paying jobs and the respective strengths and weaknesses of thermal and renewable power are all part of this puzzle.

Sun is unreliable

India has always been a power hungry country but in the next few years, as its economy expands, it is likely to break all records. Between 2005 and 2022, per capita electricity consumption doubled from 631 units to 1,255 units in India, making it the third largest electricity market in the world. It is set to go up by over 40% in less than a decade. In absolute terms, from 1,624 billion units in 2022-23 to 2,280 billion units by 2029-30. One unit of electricity is equal to one kilowatt-hour.

To meet this demand, it needs to set up massive capacities and the focus is on renewables. By 2030, 500GW of renewable energy led by solar is expected as compared to 178 GWtoday—solar accounts for 71GW of that.

However, that will not be enough which explains Singh’s remarks on expanding thermal power capacity. According to the government, the country would need 777GW annual capacity by 2030, but capacity alone doesn’t mean much as actual electricity generation is significantly lower (see graphic). This is more true for renewable power which is dependent on a variety of factors like weather (solar and wind) and rainfall (hydro). Coal-based thermal power may be dirty but it’s more reliable.

“This enormous requirement can only be met by sufficient addition in renewable and storage capacity, no major time overruns in pipeline hydro and nuclear capacity, steady wind speeds and hydrology,” said Rajashree Murkute, senior director, CareEdge Ratings, a ratings agency.

“To maintain energy equilibrium, backing down even 1MW of thermal power would approximately require 3MW of incremental renewable capacity. India has underachieved renewable energy capacity addition targets by fair margin in the past—capacity addition has been below 20GW annually,” she added.

In terms of sheer installed capacity, solar would overtake coal by 2030—292GW against 252GW, but because of its inherent unreliability, coal will remain the mainstay as far as electricity generation is concerned at 55% versus 23% for solar. Capacity utilization for a renewable project is much lower than a coal based thermal power plant (64% in power plants with a capacity of more than 25MW in 2022-23).

“Due to low plant load factor (another term for capacity utilization) of renewable capacity at 20-22%, the incremental capacity addition of renewable may not be able to meet the incremental power demand unless there is a step-up in renewable capacity add,” said Manish Gupta, senior director and deputy chief ratings officer, Crisil Ratings Ltd., another ratings agency. “Thus, thermal generation would continue to grow at least in the near future.”

“Although the renewable energy sector is gradually maturing, challenges sustain. We expect capacity addition to still remain below 30GW on an annual basis in the next two years. For India, successful installation of 35GW on an annual basis, along with establishment of reliable storage solutions, are precursors for curbing thermal output,” Murkute added.

What happened to gas?

Is there a better option other than renewable power? Power generated by natural gas is way cleaner. A study conducted by the National Environmental Engineering Research Institute, on behalf of the ministry of statistics and programme implementation, highlighted that the health effects attributable to NOx (collective term for the harmful nitrogen oxides) from a natural gas plant even within a two-km radius are negligible. The study further indicated that 6.5% of the population living within a two-km radius of a coal-based thermal power plant suffer from respiratory disorders.

But there is no expansion of gas-based power plant capacity in India. The reason? A fall in production from the Krishna Godavari basin in Andhra Pradesh, where natural gas reserves were discovered in 2003.

“A significant capacity is presently stranded due to lack of availability of domestic gas and high cost of imported LNG,” noted a Central Electricity Authority report on ‘Optimal Generation Mix 2030’, dated April 2023.

Two decades more

It is not India alone that has doubled down on coal-based power. Even developed economies like Germany, which invested billions of dollars in renewables and preferred natural gas over coal, had to go back to coal as prices of natural gas spiralled following Russia’s war on Ukraine in 2022. Every country plans for energy security.

“My energy security is primary. And we will do whatever it takes,” minister Singh told reporters on 21 June, during an interaction in Delhi. “Our economy is growing at 7.2%. That is the fastest growth in any major economy. And we will continue to grow at the fastest rate. This will not be possible unless there is enough electricity. It is my job to ensure that growth is powered. And it will be powered,” he had said.

Recently, policymakers got a taste of the sobering reality as demand for power saw an unprecedented spike in late August and early September, instead of peak summer months of April-June. As the monsoon failed in August, air conditioners in houses and offices and water pumps in farms worked overtime. On 1 September, demand peaked to a record high of 240GW against the government’s estimate of 230GW. This forced the government to scramble back to coal.

India is planning for more coal production, going ahead—the government is planning to ramp up coal production from 900 million tonnes to 1.5 billion tonnes by 2030.

“As far as India is concerned, transition away from coal is not happening in the near future,” said Santosh Agarwal, deputy director general at the ministry of coal. “Demand would rise by about 40% by 2030 and only peak in 2040. There would be no closure of mines. Instead, more mega mines would open,” she added.

By default, this is good news for employment generation as a coal mine generates more employment than a solar, wind or hydro power plant even if those jobs are low skilled and don’t pay much. Around 1.2 million people are directly involved in coal mining in the country—mostly in the relatively lesser developed eastern states of the country. India’s wind and solar energy sector, in contrast, employed less than 0.2 million as of 2021-22.

Certainly, governments wouldn’t be in a hurry to wind down an industry that generates employment.

Nonetheless, there will be a time when renewable energy will be backed by sufficient battery storage or other options like hydrogen to facilitate not just a capping of coal-based power generation but eventually a reduction. That is when massive soot producing power plants, like the one in Singrauli, will begin to be shut down.

“This is the ultimate vision in the long run,” said Karthik Ganesan, fellow and director at research coordination, Council on Energy, Environment and Water, a think tank. “Coal is likely to play a role for the next two decades, given the current project development pipelines and the cost of alternatives.”