Why India must dump coal

Smog in India (Source)

From the Hindustan Times:

Coal is at risk from competition from low cost renewables, volatile commodity prices, growing concerns about air pollution, worsening water availability for cooling, the increasing incidence of heat waves that reduce operating efficiencies and, of course, necessary action to tackle climate change. These factors in combination are driving the structural decline of coal, led by China. According to Wood MacKenzie, coal use in China has dropped by 40% in the last five years.

According to Morgan Stanley, solar power in India has recently reached a tipping point, becoming more affordable than coal. Other Asian economies already seem to understand the dynamic of coal being highly risky. For example, South Korea’s newly elected President Moon Jae-In’s is moving to phase out coal and shift into solar and wind. Taiwan is expanding its renewable energy plans whilst reducing its reliance on coal by a third, from 45% to 30% by 2025.

Analysts now argue that coal usage in India will peak in the next five to 10 years. India will join China, and other East Asian economies, in halting new coal growth. No new coal plants are set to be commissioned for the coming decade, according to the Central Electricity Authority’s draft plan. And 37GW of old coal could be shut down, while Coal India is set to close 37 mines. 

While Europe and India are at different stages of development, the European experience shows how investing in coal can go badly wrong. Between 2005 and 2008, European power companies planned to build 65 new coal-fired power plants, with 49 gigawatts (GW) of capacity, but only 12 were actually built. More cancellations are expected.  In Germany alone, 20 GW has been cancelled.

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