BLOG | Professor Lesley Sloss | March 2024
First of all, I must say that it is a joy to be joining the Centre for Energy Policy (CEP) as a Visiting Professor. I am honoured to add my voice to their invaluable work, bringing a more international perspective, and especially in my favourite areas of the energy trilemma, the balance of three conflicting energy goals: keeping the lights on; protecting the environment; and achieving both these objectives without excessive cost to the public.
The energy trilemma – at home and abroad
Every nation faces the trilemma and first world economies are, unsurprisingly, doing better than most. The UK is currently fourth out of the 99 countries ranked by the World Energy Council. Predictably, emerging economies rank near the bottom.
Leading by example is necessary. But as developed economies such as Scotland take bold steps towards a carbon-neutral future, other countries are lagging. The common modern adage is: “if the UK were to sink today, growth in emissions from Country X [insert emerging nation of choice here] would negate the reduction in emissions within a month or less.” This can inevitably lead to responses of “well, what’s the point?” and “other countries need to be held more accountable.” But accountability is expensive. Very expensive. And while Europe is still reeling from brutal increases in energy tariffs due to the perfect storm of political crises, emerging economies face greater, longer established, and more consistent struggles to pay their bills before even considering stepping up to costly climate commitments.
The challenge India and other developing countries face in transitioning away from coal
In 2019, it was estimated that around 20% of electricity generated in India is stolen from the grid. Whilst crime and corruption compound the challenge of making electricity affordable for end users, the fact is that power is a cost that some populations struggle to pay even when the cost is comparatively low – the consumers cannot pay; the utilities cannot pay; and the government cannot pay.
Making the move away from coal achievable and, more importantly, affordable, requires us to understand just why nations such as India cling to coal:
- Coal is cheap and it is right there. India has abundant indigenous coal supplies guaranteeing low-cost power and employment. Coal provides over 80% of the electricity. Gas is not available and nuclear is expensive. Renewable energies are becoming affordable but they are not yet dispatchable.
- Coal is dependable and dispatchable. Functional societies (industry, education, healthcare, and the public) rely on dispatchable power - power that can be reliably delivered to match rapid changes in supply and demand. Until energy storage and grid challenges are resolved, increasing variable renewable energy in India will not mean that coal plants can simply be shut down, regardless of carbon reduction goals.
- Coal is vital to the economy. The power sector is one of the largest employers in India. To realign skillsets, infrastructure, supply chains and even whole communities who exist solely to run a coal mine or power plant is a huge ask and one that requires detailed consideration under Just Energy Transition goals.
- Coal is secure. Most nations strive for independence in energy and resources. With their own consistent and reliable source of power available at low cost from under their own feet, India has no good reasons to spend more to import power or power systems from overseas. This month India announced that it is moving to reduce remaining imports of coal from outside the country.
India has affordable and dependable power from coal and, as President Modi delivers on his promise to ensure power to 100% of the population, coal use has increased by almost 60% in the last ten years. And, if the move to renewable energy does not take an impressive upturn soon, coal use may increase by another 50% before 2030.
Barriers to the uptake of renewable technologies and efforts to reduce emissions in India?
What is confusing is that, according to the latest data, solar power in India is now cheaper than coal power, coming in at around $30/MWh for solar compared to $50-60/MWh for coal. This should be fabulous news for Modi’s plan to hit 500 GW of renewable capacity by 2030. But, due to a wobbly start, India needs to install at a rate of 50 GW/y to reach this target. So, what has gone wrong? As is common in India, the roadblocks are down to bureaucratic micromanagement and attempts to add costs and tariffs to the new sector before it got off the ground.
While solar finds its feet, India is working to reduce emissions from energy production. For existing plants, strict new emission standards have been introduced but, due to hesitancy and delay by regulators on enforcing compliance, plants are delaying and derogating. New power systems are being developed but, unsurprisingly, many of these are coal based such as lignite gasification and coal-to-liquid plants. As a means to offset the continued reliance on coal, there is a government mission on Carbon Capture Utilisation and Storage.
If India does accelerate the uptake of solar technologies, then its “Make in India” initiative will require the country to source its own supply of rare earth elements. India does have significant rare earth element resources including from, yes - you guessed it, coal.
So, with what looks like a severe addiction to coal, how does India wean itself onto cleaner energy? They need a strategic approach that works WITH the problem to a logical conclusion, including:
- Ensuring that all new coal projects are advanced HELE (high efficiency low emission) options.
- Prioritisation of action (closure or clean-up) at the dirtiest plants first.
- Continued renewable integration, accelerated by a more pragmatic approach to managing and pricing energy from this new sector. Prioritisation of solar onto the grid would be a good starting point.
- Collaboration from the global community including not only knowledge-sharing to accelerate capacity growth but also considered funding – interest free loans or even grants rather than loans. India is ripe to function as a testing site for new ventures. Those trialling new renewable systems and strategies could go straight to market by evaluating them in India.
- Strategic re-skilling and transitioning of workers from the coal sector into cleaner energy production.
Coal IS going to be the major source of energy in India for decades. Significant transition is necessary and it is vital that staff, skills, and even power itself from the coal sector is a significant part of that transition.
Image credit: Sujan Shetty on Shutterstock