India developing more coal power capacity than it needs: reports

The Global Energy Monitor (GEM) and the Center for Research on Energy and Clean Air (CREA) released a new analysis, stating that India is developing disproportionate coal-based power capacity.

The report states that authorities have allowed coal power projects with a capacity of about 11.5 GW to go ahead in the first five months of 2023. According to statistics, they have approved the expansion of coal projects with a capacity of about 3.9 GW during this period.

At the same time, the government has issued the terms of reference for 7.6 GW capacity, bringing these projects one step closer to obtaining permits. According to statistics, India is currently developing approximately 65.3 GW of coal-based power capacity, with 30.4 GW capacity under construction.

While 35 GW capacity is in various stages of pre-construction. Out of this, permission has been granted for 14.4 GW capacity. 11.8 GW capacity is to be permitted, while projects for 8.8 GW capacity have just been announced.

However, despite this alarming growth, there has been a significant decline of 85.6 per cent in projects being developed. Which has come down from 250 GW in 2014 to 36 GW.

"India's rush to approve coal projects in 2023 represents a shift in its energy transition strategy," says Flora Champenois, research analyst at Global Energy Monitor (GEM). According to him, last year India did not approve new coal power plants, in line with the global trend to move away from polluting, expensive and obsolete energy.

No need for new coal power projects

The analysis indicates that India's present plans surpass the significant coal capacity expansion that the National Electricity Plan anticipates. Reviewing the National Electricity Plan (NEP 2023) reveals that the coal power capacity being constructed in India significantly surpasses the anticipated needs in 2027 and 2032.

According to the analysis, there is no need to build more coal-fired power plants with a capacity of more than eight GW under construction. Similarly, the 34.9 GW capacity that is planned to be built is also not needed.

The National Power Plan forecasts a 10-year decline in coal power plants, indicating that there is no requirement to initiate any new coal-based power projects in the country.

The country will operationalize all the planned coal projects and will have an on-grid coal capacity of 275 GW, even if 2.1 GW of the total coal-based capacity is retired. Importantly, this capacity surpasses the 259.6 GW requirement projected by the NEP for 2032.

In relation to this matter, Sunil Dahiya, a researcher linked with the Center for Research on Energy and Clean Air (CREA), conveyed through a press release that, "The National Electricity Plan of India consistently portrays the electricity demand as much higher than what it truly turns out to be. This pattern, he believes, has previously resulted in coal power plants worth billions of dollars becoming non-performing assets (NPAs). Meanwhile, the mounting pressure to introduce further coal power proposals exceeds the actual requirement. In this scenario, there is a possibility of getting entangled with more assets due to this excessive approach."

He further adds, “Going ahead with these projects will not only worsen the financial situation but also create climate, air pollution and health disasters in the future. Adequate and efficient action needs to be taken now to prevent these disasters."

5% of plants meet emissions standards

India can play a key role in driving the global transition from coal to clean energy during the G20 leaders' summit in Delhi this September. This effort will address energy access as well as energy security.

Many benefits will be had by moving to cleaner sources of energy. Tackling the climate crisis as well as promoting economic growth will be helpful. New employment opportunities will be created, as well as benefits from the point of view of environment and public health. According to the report, India's energy transition could be complicated by attempting to simultaneously invest in both renewable and coal-based energy.

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