Context: According to Central Electricity Authority (CEA), India may need additional 28GW of coal-fired generation capacity by 2032 apart from 25GW thermal projects which are under construction.
Energy Scenario in India:
India is the world’s third largest consuming country. The demand for electricity grows by about 4.7% every year. Coal-Based generation witnessed an increase of 16.13% during April-July 2022 as compared to Fiscal Year 2021.
Reason for Increasing Coal Demand:
- Developing Economy: India’s continued expansion which is going continue in upcoming years with average GDP of 6-8% will be fueled partially by coal.
- Iron and Steel Industries: Coal being the raw material for iron and steel production and with nearly negligible suitable alternative available, coal is likely to remain in huge demand.
- Slow growth of Non-renewable energy Infrastructure: Lack of adequate infrastructure such as solar photovoltaic cells, has slowed down the transition.
Concerns associated with Increased Coal usage:
- High Import Dependence: Owing to presence of low quality of coal grade in India, Imports are very high which put stress on forex reserves. Increase in demand of coal will further drain the forex.
- Low Utilization: Before 2018-19 coal reforms (Which have allowed mining of coal companies) which made monopoly of Coal India which did not had good machines to mine the same.
- Pollution: Though India has made pledges in many Conferences of Parties, but reports from CAG, CEA and Economic Survey suggests the increase of coal usage in India in near future which could deteriorate air quality.
- Monsoon: Extended monsoon in India due to La-Nina conditions has shut down the coal mines as they become dysfunctional during rainy season.
India must unlock it potential in clean coal technologies throughout the coal value chain. To accommodate with Net-Zero Target, the government should increase investment in creation of infrastructure for non-renewable energy.