Is India’s ambition to phase out coal-based power generation and switch to natural gas-based power generation viable?
Is India’s ambition to phase out coal-based power generation and switch to natural gas-based power generation viable?
the story So Far: In April, Finance Minister Nirmala Sitharaman said India’s transition away from coal as a power fuel would be hampered by Russo-Ukraine War, “One calculation I think we had in mind was the transition [away from coal] … will be enabled by natural gas,” she said, adding that “reducing dependence on coal, and the speed at which we want to move out of it, will now be challenged.”
Why is ‘moving away from coal’ so important?
The threat of global warming is looming large over the planet, promising to bring about unprecedented natural disasters.
An effective way to keep the threat at bay is to cut back on the use of fossil fuels – coal, natural gas and oil. These three fuels meet about 80% of the world’s energy needs. They have potentially brought us the climate crisis, as they trigger the emission of carbon dioxide. However, the worst offender among them is coal, which emits almost twice as much carbon dioxide as natural gas and about 60% more than oil, compared to a kilogram-to-kilogram. Combustion of coal also leaves behind partially burnt carbon particles which promote pollution and trigger respiratory disorders. The outcome of these chemical reactions is of great importance, as the power sector accounts for 49% of total carbon dioxide emissions in India, compared to the global average of 41%.
What is India’s dependence on coal?
As of February 2022, the installed capacity of coal-based power generation across the country was 2.04 lakh megawatts (MW). It accounts for about 51.5% of the electricity from all sources. This is compared with about 25,000 MW of capacity based on natural gas as a fuel, or just 6.3% of all installed capacity. Renewable energy is 1.06 lakh MW or 27%.
Coal based power stations are periodically retired which happens all the time. But it is not fast enough and neither is stopping new additions. And with good reason – coal is still cheap compared to other sources of energy.
For example, for FY20, India added 6,765 MW of power capacity based on coal as fuel. But only 2,335 MW was retired. According to the IEA’s Coal Report 2021, India’s coal consumption will grow at an average annual rate of 3.9% to 1.18 billion tonnes in 2024.
Therefore, it is not easy to walk away from coal overnight. As World Coal Association CEO Melissa Manuk said during her recent visit to India, “coal will continue to be a significant contributor to the energy sector even in 2040!”
How has war made it difficult for India to move away from coal?
India’s plans to move away from coal have dubbed natural gas as a transition fuel. The international cost of natural gas has risen in recent times to levels that were already considered too high to be economically viable. The price of gas per mmBtu on May 17, 2022 was ₹ 1,425, as against ₹ 500 in April, 2021.
Even last November, before the war got tough, the government set up a committee to ensure that natural gas prices remained stable. Of the 25,000 MW gas-based power plants, about 14,000 MW are stranded or lying idle, as they are economically unviable.
While renewable energy sources are cheaper than coal, their ability to generate electricity continuously is subject to the whims of nature – the wind and the sun. Coal can give you electricity on demand. Storage technologies are still not mature enough to help renewable energy sources become reliable generators of electricity.
Is there a crisis of coal availability that is adding to our problems?
The slowdown in demand for a return to the economy, which had for some time been stunned by the pandemic, appears to have stunned policy makers. Recently asking states to stop importing coal, the power ministry earlier this month urged states to increase coal imports as it would take around 2025 for the private sector to produce significant quantities of coal.
Coal India, the country’s largest supplier of dry fuel, is set to import coal for the first time since 2015, according to a letter from the ministry. The purpose of the exercise is to avoid repetition. power cut crisis Which India faced in April – the worst in more than six years. After issuing a letter dated May 28 to all state utilities, states and central officials, including the coal secretary, the central government has asked states to place import tenders with a view to cut down on procurement cost by using government-government channels. For.
The Interior Ministry’s presentation is said to point to a shortage of 42.5 million tonnes (MT) of coal in the quarter ended September due to high demand for power supply. The reduction is 15% higher than the earlier estimate. The domestic supply of coal is expected to be 154.7 MT as against the estimated requirement of 197.3 MT. The earlier estimated shortfall was 37 MT. The requirements for the year ending March are estimated at 784.6 MT, up 3.3% from the earlier estimate. Without imports, utilities are likely to run out of coal supplies by July.
essence
There is a need to reduce the consumption of coal as the power sector in India accounts for 49% of the total carbon dioxide emissions as against the global average of 41%.
As of February 2022, the installed capacity of coal-based power generation across the country was 2.04 lakh MW. It accounts for about 51.5% of the electricity from all sources. Natural gas has been called a transition fuel.
According to a letter from the Ministry of Power, Coal India, the country’s largest supplier of dry fuel is set to import coal for the first time since 2015. The aim of the exercise is to avoid a recurrence of the power outage crisis that India is facing. in April.