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What Modi Didn’t Say About India Energy Challenges
Image Credit: Wikimedia Commons

What Modi Didn’t Say About India Energy Challenges

 
 

The 16th annual International Energy Forum (IEF) Ministerial is taking place in New Delhi this week, and Indian premier Narendra Modi pulled no punches when it came to advocating India’s energy interests in his opening address to the gathering of global officials and private sector executives.

Critiquing the oil production cuts among Saudi Arabia, Russia, and other major exporters present at the forum, Modi warned efforts to “artificially distort prices are self-defeating.” He also castigated the price-boosting measures as the source of “undue hardship, particularly to those at the bottom of the pyramid in developing and least-developed countries.”

Modi focused on oil, but his remarks capture his government’s view of another critical fuel source – coal – equally well. Like most emerging Asian markets, India faces the challenge of reconciling its energy needs as the world’s fastest-growing economy with the realities of climate change and the impetus to reduce pollution. Institutions like the World Bank often tout renewable energy as the solution, but coal supplies approximately 60 percent of India’s energy mix compared to just 16 percent for renewables.

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While installed renewable capacity is growing rapidly, it has so far underperformed expectations. Neither wind nor solar can replace coal as a supplier of baseload power in the near future, especially while energy demand growth outpaces supply and battery storage remains prohibitively expensive.

According to India’s Draft National Energy Policy, energy demand in 2040 will be 4.5 times greater than 2012 levels as India remains the biggest driver of global energy demand. While India relies heavily on imports for oil, the country sits on coal reserves ranking among the top five in the world. That helps explain why coal will still meet over 40 percent of Indian energy needs three decades from now.

For that reason, a major component of India’s emissions reduction strategy centers around making sure coal combustion is as clean as possible, cutting the harmful emissions choking Indian cities without damaging economic growth. New Delhi has already taken steps in this direction, but the World Coal Association warned in February that India needs more investment and outside assistance to implement clean coal technologies. The World Bank, however, has made a point of refusing to back coal-based energy projects.

That stance has provoked strong reactions from Indian officials. Chief economic adviser Arvind Subramanian has described renewables-or-nothing policies as “carbon imperialism,” dooming people in India and other developing nations to a life without power while developed countries like the United States continue to rank among the largest consumers of coal.

As it happens, the U.S. President Donald Trump agrees strongly with that stance. As the World Bank prepares for the spring meetings at its headquarters later this month, Trump and his officials are using U.S. leverage over the Bank and other multilateral institutions to push them to scrap restrictions on funding clean coal projects. As Barry Worthington of the U.S. Energy Administration has pointed out, that leverage is substantial. Via its executive director at the World Bank, the U.S. government theoretically has the power to veto projects if the Bank refuses to compromise.

The Trump administration’s efforts are specifically addressed to developing countries like India. In March, the U.S. Energy Secretary Rick Perry built on an idea Subramanian himself previously put forward by confirming the creation of “a global alliance of countries willing to make fossil fuels cleaner.” Perry highlighted the developing world’s fundamental right to electricity and said that it would be “immoral” to deny millions electricity because of an aversion to fossil fuels.

This alliance will also likely include several countries in Africa, where the African Development Bank (AFDB) publicly broke from the World Bank and the IMF on funding decisions for coal projects in Nigeria, Kenya and South Africa. In the words of AFDB president Akinwunmi Adesina, “Africa must develop its energy sector with what it has.”

Why are so many governments in both developed and developing countries so adamant about coal? Partly because it is difficult to overstate the negative impacts of energy poverty. Living without electricity drastically reduces children’s chances of getting a decent education and forces families to rely on dangerous kerosene for light. Many families without electricity cook food on wood or dung fires which emit toxic fumes, killing an estimated 1.3 million Indians a year.

In his IEF speech, Modi paid special attention to the energy poverty as an overarching concern for his government’s agenda. More than 300 million Indians live without electricity, constituting the world’s largest unelectrified population. With 1.6 billion people expected to be living in India by 2040, bridging the electrification gap is a critical battle. At the Forum, Modi insisted “people must have access to clean, affordable and sustainable supply of energy.”

Of course, that leaves the matter of modernizing India’s aging coal power plants. Decision makers in New Delhi are acutely aware of the magnitude of the challenge. Last year, the government set up a National Commission on cleaner coal, which seeks to advance the supercritical technologies capable of drastically reducing emissions.

India has also been making progress from the bottom up, with the world’s first unsubsidized carbon capture and utilization (CCU) plant recently opening in Tuticorin. The CCU technology behind the Tuticorin plant offers the possibility of locking up 60,000 tons of CO2 a year while reuses carbon dioxide to manufacture useful products at a profit. The virtually emission-free technology could be particularly useful for industrial steam boilers, which are very difficult to power with renewable energy.

Unfortunately, the National Commission doesn’t currently have the resources to make a substantial difference, and Tuticorin remains an isolated advancement for now. To meet emissions reduction targets and clear polluted skies, the Indian government needs to make a concerted effort to court investment in new technologies – whether that means supercritical and ultra-supercritical plants or CCU. Washington is keen to partner with New Delhi, but cleaning up outdated coal facilities will require a concerted multilateral effort.

Grace Guo is a Vienna-based researcher and a program associate for an NGO focused on Asian politics. 

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