New CoalSwarm Report: Collision Course – The Incompatibility of India’s Coal and Renewable Strategies
India’s annual coal power additions, historical and proposed, 2005-2025.
A new survey of coal proposals in India through May 2016 finds they far exceed the country’s future electricity demand, leading to lock-out of renewables or stranded coal assets.
Today, CoalSwarm released “Collision Course: The Incompatibility of India’s Coal and Renewable Strategies,” a new report assessing India’s coal plant proposals and how they fit with the country’s future energy policy.
Drawing on CoalSwarm’s Global Coal Plant Tracker, the report details how India currently has 65 gigawatts (GW) of coal capacity under construction, and an additional 178 GW proposed, for a total of 243 GW of coal plants under development. The proposals would more than double India’s current coal power capacity of 197 GW.
The report finds India’s coal development pipeline threatens to derail its renewable energy ambitions, leading to either lock-out of renewables or stranded coal plants.
India’s coal plant development
CoalSwarm assessed the status of all India coal plant proposals through May 2016. Projects that have not entered the permitting process are categorized as “announced.” Those that have completed the first permitting step are categorized as “pre-permit development,” and those with environmental clearance are categorized as “permitted.” (Proposals without activity for two years or more are categorized as either “shelved” or “cancelled.”)
Coal-fired proposals (MW) in India by status category, as of May 2016.
India currently has 56 GW of proposals in the announced stage, 78 GW in the pre-permit development stage, 44 GW permitted, and 65 GW under construction. The image at the top of the page shows what those proposals could look like over time.
Not all or even most coal proposals will likely be completed. From the beginning of 2010 to May 2016, just over 261 GW of coal-fired capacity in India was implemented or began construction while 431 GW was halted, for an overall implementation rate of 38%.
Still, if 38% of the pre-construction plants are completed, it will add 68 GW of new coal capacity, in addition to the 197 GW already operating and the 65 GW under construction.
Plants operating and under construction exceed electricity demand
According to current projections for coal plants under construction, the amount of new coal capacity coming online will increase to its highest annual level yet in 2016, at 27.2 GW, and then decline slightly to 19.7 GW in 2017.
The grey area shows coal-fired capacity additions in India since 2005, including plants commissioned up to May 2016. The blue area shows projected commissioning for coal plants under construction.
CoalSwarm finds that India’s operating and under construction coal plants alone are enough to exceed the country’s projected electricity demand through 2022 – without accounting for any of the pre-construction proposals.
Yet the Indian government has proposed having 100 GW of solar power and 60 GW of wind power by 2022. India’s coal building will in effect compete with the country’s renewable ambitions.
Carbon dioxide emissions
Coal plants often operate for forty years or more. Thus any plant built now may be emitting heat-trapping carbon dioxide many decades into the future, unless retired early.
To illustrate this, the figure below looks at the estimated annual emissions of coal plants that were commissioned in India between 1960 and 2015:
Estimated annual CO2 emissions from India coal plants that began operating 1960–2015 over their full lifetimes. The grey area is past emissions, and the blue area future emissions. Parameters for estimating CO2 emissions can be found here.
Assuming a 40-year lifetime, India’s coal plants will emit a total of 38.6 billion tonnes (gigatonnes [Gt]) of CO2, unless retired early. Of this, 28 Gt would be released from 2016, meaning most of the emissions from currently operating coal plants have yet to be realized.
India’s existing coal plants are underutilized
The report comes as the country is already facing excess coal capacity.
State energy distribution companies have been unable to buy power at prices sufficient to cover the operating costs of coal generators, leading to 30 GW of stranded plants in 2016.
India’s current coal plants are being used less and less, with the average plant utilization rate falling from 79 percent in 2007 to 64 percent in 2015.
Coal plants are also losing their place as the least-cost electricity option: average costs for plants coming online in 2020 are INR 4.40/kWh for pithead coal and INR 5.15/kWh for imported coal, while prices for photovoltaic solar have already reached a low of INR 4.34/kWh.
A better path forward
Facing their own coal oversupply, China, Vietnam, and Indonesia have recently taken policy measures to curb coal plant development. Indonesia has reduced its planned coal plants by 8 GW and Vietnam by 23 GW, while China has suspended or halted 105 GW of coal development.
The report recommends the government of India take strong action to rein in further construction and permitting of new coal plants. Failing to close India’s coal plant pipeline would mean locking the country into more expensive and underutilized coal plants at the expense of lower cost and cleaner renewable energy options.
CoalSwarm also publishes CoalWire, a weekly bulletin on global coal industry developments. (You can sign up for it here.)