Economic growth and energy security needs mean that Delhi has no plans to cut coal use while boosting renewables, writes Rituparna Ghosh
India plans to increase its renewable energy capacity while simultaneously expanding its use of fossil fuels, casting doubt on whether it can meet its net zero climate targets.
Delhi is likely to use the UN Cop 28 climate conference in Dubai later this year to reiterate the need for climate financing for developing countries, so that they can reach their energy transition goals. It is also planning to roll out zero or low-emission technologies, which could allow it to extend the lifespan of coal and gas assets and construct new coal plants with or without carbon capture, utilisation and storage and co-firing technology, industry experts say.
India aims to achieve net zero emissions by 2070 and reduce carbon emissions by 1bn t by 2030. The country's strategy largely rests on tripling its renewable capacity to 500GW before 2030. But at the same time, it intends to add coal capacity to meet rising power demand.
India last month hosted this year's G20 summit, at which leaders reached a major green development pact where they pledged to pursue efforts to triple renewable energy capacity globally through existing targets and policies. The countries also agreed to double financing for the green energy transition by 2025, and accelerate efforts towards a phase-down of unabated coal power. But the leaders stopped short of setting specific targets for the latter.
The goal of tripling renewable generation "is in recognition of the fact that the price of [electricity generated fromrenewables] has declined", International Solar Alliance director-general Ajay Mathur says. "This year we expect $380bn to be invested in solar — the highest ever invested in the electricity business globally. But coal will continue to be a large part of India's energy demand at least until 2060."
India relies heavily on coal-powered generation, with the fuel accounting for 50pc of its installed generation capacity. Non-fossil fuel power generation makes up 43pc of India's energy mix, which includes renewables such as hydropower, solar, wind and biomass. The government aims to increase the non-fossil fuel share to 65pc by 2030, power minister RK Singh said last month.
Climate financing challenge
The world needs more than $4 trillion/yr of investments in low-cost financing by 2030 in order to reach net zero carbon emissions by 2050, G20 leaders say in the summit's closing declaration. In India, "renewable energy and storage would require five times more capital expenditure" than is being put towards it in 2023-24, NTPC School of Business professor Abhinav Jindal says. "This looks difficult unless we get financing support from the developed world," Jindal says.
Norway, Denmark and the EU have, through the Just Energy Transition Partnership (JETP), offered to provide financing to India to enable it to reduce emissions from power generation. But India says it will only participate in the partnership on its own terms, which include the provision of clean energy expansion funds in the form of grants or low-interest loans, and no requirement for a coal phase-out. India's western regions such as Gujarat, Rajasthan and Maharashtra and southern states such as Tamil Nadu are better suited for renewable power generation, while eastern states West Bengal, Odisha and Jharkhand have larger fossil fuel reserves of coal and iron ore, and are mostly reliant on coal-fired power generation.
"India is a very different country… Any forward-looking JETP for India will have to be mindful of that," Jindal says. "Not only giving cognisance to its existing younger coal fields, but to addressing its financial needs for the sector going forward. Any precondition from any multinational institution towards jettisoning coal in the Indian context is not going to yield any significant benefit."
India recognises the need to accelerate the phase-down of coal-powered generation, the G20 leaders' document says, but the country still intends to continue expanding its coal-fired power generation capacity. Delhi "shall not compromise on energy security", Singh said last month, adding that the country's economic growth should not be hindered by power shortages. "If storage is not available, our fossil fuel capacity will continue, that is a fact," he added.
India will need to increase its coal-fired power generation capacity to 259.6GW by the April 2031-March 2032 fiscal year — from 211.9GW currently — to meet projected peak electricity demand of 2,473.8TWh, according to the country's national electricity plan, released in June. "Coal generation capacity in India will increase up to 2035. We are setting up new thermal power plants," coal ministry additional secretary M Nagaraju tells Argus. The coal sector will aim to add 8GW of solar capacity to power its own operations by 2030, he says.
India this year called for an assessment under the UN's global stocktake process to examine the gaps in efforts by developed countries to control and mitigate their own emissions, arguing that their commitments have significantly fallen short of what is required. Delhi has pointed out the need for more abatement technologies for industrial emissions, in order to meet Paris Agreement goals to limit global warming. But "this requires accelerated action in phasing down fossil fuels, including coal. Betting on expensive unproven abatement technologies in the future cannot be a proxy for the deep emission cuts required to help avoid a climate disaster", think-tank E3G senior associate Madhura Joshi tells Argus.
India's booming industrial sector makes up 50pc of the country's power demand, and so it sees a growing challenge to its emissions ambitions coming from hard-to-abate sectors such as steel and cement manufacturing. These will require round-the-clock renewable energy guaranteed by battery storage capabilities, to supply continuous power and solve the intermittency issues associated with solar and wind power generation. Such projects will help meet peak power demand in these sectors.
Mixed policy signals
India's strategy is to electrify as much of its industrial sector as soon as possible using renewables and, where these cannot meet the requirements of hard-to-abate industries, to use green hydrogen and green ammonia, renewable energy ministry joint secretary Lalit Bohra says. But he adds the caveat, "we cannot have energy transition in a way that affects industrial growth". India's cement and metals sectors have so far only been able to meet a small portion of their energy needs from renewables, the ministry says.
Power cuts of only 2-3 hours can cause "potential damage to the manufacturing process", Indian metals producer Hindalco Industries' power and utility vice-president, Pankaj Jain, says. "So we are dependent largely on coal-based power plants and can only get 20-30pc from the grid, for which we also need a strong grid."
"India has raised its ambition, but developments on the ground, while progressing each year, will not enable India to reach its 2030 goals," international energy think-tank IEEFA's south Asia director, Vibhuti Garg, says. "What India needs to do is to triple the rate of renewable energy capacity deployment and also accelerate investments by providing policy certainty. A mixed approach can send wrong signals and, given the geopolitical crisis, it is time India reduces its dependence on expensive fossil fuels and especially on imports."
Independent research group Climate Action Tracker rates India's current policies and action as insufficient. "If all countries were to follow India's approach, warming would reach over 2°C and up to 3°C" above pre-industrial averages, it says.
