India to burn 40% more coal with new plans for thermal power

292 MT more coal needed for extra 79 GW capacity.

Going by power minister RK Singh’s announcement that India will add another 25-30 giga watt (GW) thermal power on top of 49 GW coal-based units under construction, the country is set to burn 292 million tonne (MT) more coal annually on completion of these projects.

About 3.5-4 MT of coal is used to generate 1,000 mega watt (MW) power at 65%-75% plant load factor (PLF), which is the Indian average. Considering 3.7 MT coal consumption for each GW, the new plan will mean that total coal usage will increase by 38% from current levels.

As on March 2023, the coal-based power generation capacity was 212 GW. It is set to reach 260 GW by 2030. If the additional 30 GW capacity announced is brought under construction, India will have about 290 GW coal power by 2030. The 180 thermal power plants across the country consumed 777 MT of coal, including 55 MT imported coal, in FY23. This is likely to go up to about 1,069 MT coal if the coal power projects, which have 5-7 years gestation, come up.

Power minister’s announcement came as a surprise as less than a week ago India-led G20 declaration talked big on green energy goals. However, G20 had failed to set a timeline to end fossil fuels, biggest contributor to global warming. As for the commitments to the United Nations Framework Convention on Climate Change (UNFCCC), India is well on its way to meet all of them, and has pledged bigger targets than some of the more developed countries like US, Russia and China.

According to the nationally determined contributions (NDCs), India needs to have 50% installed power capacity from non-fossil fuel sources and reduce emission intensity of its GDP by 45% from the 2005 level, both by 2030.

India has already set up 44% non-fossil fuel power generating capacity and is likely to take it up to 60% by 2030. On emissions, India has reportedly slashed 33% of emissions intensity of its GDP from 2005 level by 2019 itself. However, the announcement to expand the thermal power capacity, instead of retiring polluting plants, even after initiating dozens of clean energy measures shows India wants to ensure energy security at all cost to fuel its growth. The country has set the ball rolling on various fronts like renewable energy, energy storage systems, critical minerals, international grid connections and green hydrogen so that power shortage does not trip India’s fast growth.

“Unless the battery economics improves significantly or we see a significant scale up in pumped hydro projects, there could be some challenges,” said Vikram V, vice-president and sector head, corporate ratings, ICRA. “If storage capacity does not come up, we may have to plan for coal based capacity because we can’t go for a scenario of having blackouts,” he said, adding meeting peak demands in evening is becoming a challenge.

While the government may be preparing for all scenarios and hoping for some breakthrough technology in storage, the resources are being spread thin and the message going across to the industry is confusing. Power minister has asked the industry captains to shift to renewable energy, which may be a tough task for power-intensive industries who have captive power plants, while announcing plans to generate more coal power.

“There’s lack of clarity in trying to communicate what you eventually want to do with the mining and thermal power infrastructure,” said Aarti Khosla, founder and director of Climate Trends, a Delhi-based firm that facilitates capacity building for climate action. She advocated putting the money going into coal projects into grid expansion and transmission line for better evacuation of renewable energy.

A pre-G20 discussion on just energy transition partnership (JETP) did not find any takers in the G20 meetings. India did not even take that discussion forward as it may not want to talk about shutting of coal power. So, it just talked about expanding renewables.

“Air pollution is a big problem. It is in our own good to make sure that polluting, inefficient or older plants are retired in a rapid way and replaced by renewable power,” Khosla said.