What do we do with coal and the electricity it generates? This is the zillion-dollar question in the face of the twin challenges of climate change and the urgent need for energy to power homes, factories and shops across vast parts of the still-devel oping world. The world is fast running out of the carbon budget to keep temperature rises below 1.5°C— a guardrail against out and out devastation. We need solutions that can and must work in the interests of all. This is where the coal question becomes complicated. It is easy to say “keep it in the ground”—do not use coal for generating electricity as it is more than certainly responsible for the bulk of greenhouse gas emissions that have already filled our shared atmosphere. But how will that work in an energy-insecure world?
It is also a fact that the rest of the sermonizing world has for generations used its coal for electricity—its emissions are still in the atmosphere; carbon dioxide (CO2), for instance, has a really long lifespan—and this world is now mostly switching to another fossil fuel, only somewhat cleaner natural gas, which further adds to greenhouse gas emissions. The European Union (EU) has signed what it bills as a historic trade deal with the United States (US), under which it promises to import energy products— natural gas, crude oil and coal—amounting to a massive US $250 billion a year for three years. This may be a castle-in-the-sky-kind of promise, but it does imply that the EU has agreed to remain wedded to fossil fuels, countering its green energy plans.
What then should countries like India do when confronted with the hard reality of energy poverty and the desperate need for affordable development? Should we give up coal dependence, or should we find ways to balance old and new energy sources, all the while moving towards cleaner growth? I have always argued that the Indian government’s plan for energy transition, which is based on displacing but not replacing coal, is the way forward for us. The fact is that our energy demand will double by 2030—energy is critical for livelihoods and health. This increase will come from clean energy sources, primarily wind and solar. In this way, by 2030, coal, instead of meeting 70-75 per cent of electricity demand, would cater to only 50 per cent.
We must discuss what this means and what can be done to reduce greenhouse gas emissions from the coal-based power sector. I know this is a taboo subject—as it is better to believe that coal will soon be relegated to the dustbin of history. But let’s get real. We need to reduce emissions at all costs and across all sectors. We need to do this for local air quality benefits—reducing toxic pollutants that contribute to health challenges. We also need to do this for global climate benefits. If we can find strategies that can work for both, it will be a win-win.
This is what my colleagues have done in the report, Decarbonizing the Coal-based Thermal Power Sector in India: A Roadmap. Our analysis shows that if the country adopts a strategy for decarbonising thermal power plants, it could lead to emission reductions as large as those from two other hard-to-abate sectors— iron and steel and cement.
The first step in the roadmap is that existing plants should be required to meet the benchmark efficiency of the best plants in their category. For instance, power plants based on sub-critical technology—roughly 85 per cent of the current fleet—should be required to meet at the very least the emission factor of the top performers in their category (such as Tata Power’s 40-year-old Trombay unit or K Gudem New by Telangana State Power Generation Corporation Limited or JSW’s Toranagallu plant). This would result in a significant improvement in overall emissions.
The second step is to replace coal as the raw material—many power plants are already using biomass for co-firing. Our proposal is to mandate a switch to 20 per cent biomass, which would reduce CO2 emissions at scale.
But all this requires a plan; it needs emission targets and clear directions. For instance, currently, the government’s plan is to build ultra-supercritical coal plants, which are undoubtedly much more efficient and cleaner than older technology. But without the right policy incentives, 40 per cent of these new-generation units work below a 50 per cent plant load factor (PLF), which means their emissions are higher than the plants with poorer technology. The underlying problem is that the current merit order dispatch system—which determines the sale of electricity—is based solely on the cost of generation. It is cheaper to produce electric ity from older power plants, which have depreciated capital costs, or from units with less investment in technology or maintenance. This is the fatal flaw that still makes dirty coal the king. It needs to be displaced. And it can be.