By Christine Shearer, Robert Fofrich and Steven J. Davis*
In India, where over 20% of the population (∼300 million people) lack access to electricity, expansion of energy infrastructure has been seen as a crucial factor for human and economic development. Given India’s large coal reserves (estimated at 87 billion metric tons [Gt]), and heavy reliance of its existing energy system on coal (44% of total primary energy and 70% of electricity generation in 2015), the magnitude of global coal emissions and the prospects of international efforts to avoid dangerous climate change are impacted by the extent to which India expands its coal-burning energy infrastructure.
In the 2015 Paris climate agreement, the world’s nations agreed to limit the increase of global mean temperatures to well below 2°C and make efforts to limit temperature increase to 1.5°C above pre-industrial levels. This aim is in turn to be reflected in country-level emission pledges, known as Nationally Determined Contributions (NDCs). In its NDC, India did not pledge any specific reduction of its greenhouse gas emissions, but instead pledged (1) to reduce its emission intensity (i.e., emissions per unit GDP) by 33–35% from 2005 levels by 2030, and (2) to increase its share of non-fossil-based power generation capacity to 40% of installed electric power capacity by 2030.
India’s electricity emissions intensity was 901.7 gCO2/kWh in 2005 and increased to 926 gCO2/kWh in 2012, much higher than global averages in those years, which were 542 and 533 gCO2/kWh, respectively. The high emissions intensity reflects the large fraction of Indian electricity generated from coal; the targeted intensity decrease by 2030 will almost certainly require drastic reductions in the fraction of electricity being generated by coal.
Although the exact make-up of the 40% of non-fossil electricity capacity is unspecified, plans laid out in the country’s NDC document includes installing 100 GW of solar power and 60 GW of wind power by 2022 (over the current levels of 7 and 26 GW, respectively), and raising nuclear capacity from 6 GW presently to 63 GW in 2032.
As of May 2016, India had 56 GW of coal capacity in the announced stage, 78 GW in the pre-permit development stage, 44 GW permitted, and 65 GW under construction. Altogether, 369 plants totaling 243 GW of coal-fired generating capacity is under development—123% of the country’s currently operating coal capacity (197 GW).
Annual coal-fired capacity additions in India averaged under 3.6 gigawatts (GW) a year until 2008, when new coal capacity increased every year until 2015. There is an additional 65 MW of coal plants under construction, and 178 GW permitted or proposed, adding up to 12–40 GW of new coal capacity annually through 2025. At a commissioning rate of 10 years, coal plants under development would reach 435 GW of coal capacity by 2025 and, over an average lifetime of 40 years, would have coal plants operating through 2065. All but 23 coal units under construction have a proposed completion date, while about 40% of coal proposals in the pre-construction pipeline (permitted, pre-permitted, and announced) do not have a specified year for completion.
If completed within the 10-year timeframe, plants currently under construction and permitted would continue adding 12–40 GW a year of coal-fired capacity through 2025. At a 40-year average lifetime, coal capacity would reach 435 GW by 2025, and have coal plants operating in India through 2065, unless retired early. The cumulative capacity takes into account past and planned coal plant retirements.
Already operating coal plants have emitted about 11 Gt of CO2 since 1960. If operated for forty years at a 75% capacity factor, currently operating coal plants would emit an additional 31 Gt through 2065, unless retired early. Coal plants under construction would add 14 Gt over their lifetimes, and proposed coal plants another 38 Gt, for a total of 83 Gt of CO2 emissions from the country’s coal plants in 2016–2065.
The electricity output generated from India’s non-fossil goals, and current oil/gas and coal capacity are enough to meet the country’s projected electricity demand through 2023. Coal plants under construction are not needed until 2024, while those in the more preliminary stage (announced and pre-permit) are not needed through at least 2029, and likely longer if India continues building solar and wind capacity past its current 2022 goals. Electricity generation is calculated using the 2015 global average capacity factor for the different energy sources.
Coal plants made up 63% of India’s electricity capacity in mid-2016, while non-fossil power made up 28%. India’s NDC targets 40% non-fossil based power capacity in 2030, but does not specify how much of this power will be renewables (wind, solar, hydro), biomass, or nuclear by 2030. Our projection therefore only incorporates the country’s specific capacity growth goals for non-fossil electricity, as laid out in the government’s NDC document: 100 GW of solar power, 60 GW of wind power, and 10 GW of biomass by 2022; 63 GW nuclear capacity by 2032; and 10.5 GW of hydropower under construction, on top of the 42.9 GW of hydropower operating in 2016.
Coal plants in the more preliminary stage (announced and pre-permit) are not needed through at least 2030. If the coal plants are operated at only 45% capacity factor, all but 14 GW of proposed coal power would be used by 2030, although this would increase expenditures for construction, fuel, and operation and maintenance by spreading the costs across several plants for the same electricity output as less plants, leading to under recovery of energy charges. If the coal plants are operated at a 75% capacity factor, none of the proposed coal plants are needed through 2030.
The excess capacity represents a potential loss in capital investment. Plant construction costs are estimated at USD$1290/kW in South Asia. The excess capacity represents potential “stranded assets”— plants that are unneeded and therefore operating well below their optimal utilization rates or retired early, leading to lost revenues. Here, the excess coal plant capacity represents USD$18 (INR 1.2 trillion) to USD$230 billion (INR 15.37) in potentially wasted capital expenditures, without accounting for fuel or maintenance costs.
When combined with the coal plants under development, the growth in non-fossil capacity add up to just 38% of non-fossil capacity by 2030 (gas and oil electricity capacity is kept constant), short of the 40% non-fossil capacity goal. The India Central Electricity Authority (CEA) has recently proposed in its most recent Electricity Plan for non-fossil capacity to increase, reaching 57% of all power capacity by 2027, suggesting the estimates used here are conservative and the country is determined to meet its non-fossil goals.
The proposed coal plants would also exceed the country’s planned growth in power demand, creating the potential for declining utilization rates and stranded assets. The country already faces the decreasing use of its existing coal plants. From 2007 to 2015, the average plant load factor fell from 79% to 64% [India Ministry of Power, 2015]. State energy distribution companies have been unable to buy power at prices sufficient to cover the operating costs of generators, leading to 30 GW of stranded plants in June 2016. That month the government scrapped plans for four ultra-mega coal-fired power plants of ∼4,000 MW each due to lack of demand.
Moreover, average costs for plants coming online in 2020 are INR 4.40/kWh for domestic coal and INR 5.15/kWh for imported coal, while prices for photovoltaic solar and onshore wind power have reached a low of INR 2.97/kWh and INR 3.46/kWh, respectively. Unless national electricity demand increases significantly beyond government forecasts, the country’s current coal proposals will likely lead to either more underused or “stranded” coal plants, and/or lock-out of lower carbon and potentially less costly electricity sources.
All data on India’s coal plants can be found on the CoalSwarm website at http://coalswarm.org/trackers/india-coal-plant-tracker-map-and-table/. CoalSwarm is funded by the European Climate Foundation. These are excerpts from the research paper “Future CO2 emissions and electricity generation from proposed coal-fired power plants in India” in “Earth’s Future” (click HERE to download full paper)