Ending coal use – UPSC GS3

Why India should reduce Coal Use?
  • We need to meet the Paris Agreement target of limiting temperature rise to only 1.5 degrees centigrade by 2100 when compared to pre-industrial levels.
  • Coal-fired plants in India are already operating at a very low plant load factor (PLF). It is possible to generate additional power at a relatively low marginal cost.
  • India has envisioned a massive programme of having 450 GW of renewable capacity by 2030 and it is growing at the rate of about 25 per cent annually in the last few years.
  • With the cost of batteries declining progressively, storage has become a viable option, which will help in attaining grid stability.
  • Green hydrogen may become a viable option by 2030 and will be able to provide long-term storage solutions.
  • Coal-based developers will find it increasingly difficult to find lenders for their projects due to increasing divested from coal.
Challenges posed by ending coal use:
  • Energy Security: As currently 70% of India’s energy needs are fulfilled by coal. In 2019-20, the country consumed approximately 942 million tonnes (MT) of coal. Out of this, 730 MT was produced domestically.
  • Social Challenges: There would be significant job losses post the phase-out. Coal India Limited and Singareni Collieries Company Limited employ 2.24 lakh workers. Their job loss will impact almost 9 lakh people considering a four-person household. A setback to workers in coal-consuming sectors like power, steel, sponge iron, etc. will also be seen.
  • Economic Challenges:  In FY20, the Centre alone collected approximately Rs 29,200 crore in GST compensation cess from coal. The revenue from coal allows centre and states to undertake various development activities.  Similarly, 40 percent of total freight revenues in railways are generated from coal.
  • Power Demand: India needs to estimate the demand for electricity for the future in 2030. Various estimates suggest India needs 2,200 billion units (BUs) to 2,800 BUs depending upon the assumptions made.
  • Renewable Energy Goal is unrealistic: We need to have a realistic estimate about the feasibility of achieving a renewable capacity of 450 GW by 2030.
  • Battery cost is still high: though battery costs may have come down by 80 percent approximately in the last decade, there is apprehension that further decrease in costs may no longer be so dramatic. Even at today’s battery prices, it is economically viable to have storage of approximately four hours only.
Way Forward:
  • India must ensure adequate support for people and communities dependent on the sector. It can learn from plans of other countries like:
    • German coal phaseout plan: It seeks to end coal burning by 2038. It also involves an investment of more than 50 billion euros for mining and plant operators, impacted regions, and employees.
    • US’s Interagency Working Group: It is supposed to deliver resources that will revitalise the coal, oil, and gas communities.
    • Canada’s coal phase-out plan: As per the plan, the phase-out will happen by 2030. A Just Transition Task Force has been created for the welfare of dependent communities.
  • The phase-out plan should also ensure social, climate, economic and environmental justice.
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