India’s push toward renewables will not stop coal reliance for 20 years

There’s little doubt that India has made progress in its transition to renewable vitality.

The nation’s leaders have been optimistic about its path to internet zero, making daring claims that fifty% of its energy era will come from renewables by 2030, and 100% by 2070.

Nonetheless, coal manufacturing continues to soar and reliance on the fossil gasoline will not finish any time quickly as India struggles to search out different methods to chill properties down and maintain the lights on.  

“India won’t be able to outlive utterly with out coal and there’s no different for India within the coming 10 to twenty years,” mentioned Anil Kumar Jha, former chairman and managing director of Coal India — the world’s largest coal producer.

“If you’re hungry and haven’t got cake to eat, will you eat bread or die hungry? That’s presently what India is doing,” Jha advised CNBC. “We do not have an alternative choice to generate that quantity of electrical energy, and must rely upon coal.” 

Fossil fuels, primarily coal, proceed to make up 75% of India’s energy provide, making it “the one gasoline that India has in relative abundance,” mentioned Neshwin Rodrigues, electrical energy coverage analyst at Ember, a worldwide vitality assume tank.

Results from local weather change have triggered greater than 700 warmth waves in India over the previous 5 many years, driving up electrical energy demand as extra households buy air conditioners. 

“India is presently witnessing a speedy surge in electrical energy demand, pushed by the electrification of quite a few households, the burgeoning financial system, and the rising adoption of electrical automobiles, infrastructure growth, and cooling methods,” mentioned Sooraj Narayan, Wooden Mackenzie’s senior analysis analyst of energy and renewables in Asia Pacific. 

“This heightened energy demand necessitates a dependable, cost-effective, and constant energy era supply, which coal presently fulfills,” he highlighted. 

Information from the Worldwide Power Company confirmed that electrical energy consumption in India from air conditioners elevated by 21% between 2019 and 2022.

Practically 10% of the nation’s electrical energy demand comes from area cooling and this may enhance ninefold by 2050, the IEA mentioned.

Concurrently, India’s coal consumption has quickly elevated. 

The nation’s coal manufacturing rose to 893 million tons in 2022 to 2023, a 14% progress from 778 million tons in 2021 to 2022, in keeping with information from the Ministry of Coal.

Jha estimated coal manufacturing may attain 1,335 million tons in 2031 to 2032. 

This raises the query about whether or not India will have the ability to attain its 2030 goal of reaching 50% of its vitality necessities from non-fossil gasoline sources. As of now, vitality analysts do not assume it is achievable. 

“Coal stays a dependable fallback possibility for India to make sure constant and reliable energy era, particularly because it strives to satisfy the calls for of a quickly rising inhabitants and financial system,” Narayan identified. 

This may very well be the norm for India till after 2030 — when coal demand is anticipated to peak, in keeping with Sumant Sinha, founding father of Indian renewable vitality agency ReNew Energy. 

“What we can not afford as a rustic is basically to shortchange our progress on account of an absence of energy capabilities. Whether or not we prefer it or not, coal will proceed to have a job to play in India,” Sinha advised CNBC’s “Squawk Field Asia” on final week. 

Regardless of having the ability to produce low-cost wind and photo voltaic vitality, solely 22% of India’s energy era is met by renewables.

All of the analysts who spoke to CNBC agreed the nation’s photo voltaic, wind and hydro vitality capabilities are nonetheless unreliable as they’re depending on climate circumstances and the local weather.

“Renewable sources like photo voltaic and wind are inherently variable, counting on pure elements akin to daylight, wind and water availability. This variability makes them much less reliable for assembly the nation’s burgeoning energy demand,” Wooden Mackenzie’s Narayan mentioned. 

The South Asian nation presently has round 180 gigawatts of put in renewable vitality, and hydropower makes up half of that blend. Nonetheless, extra superior infrastructure is required to make sure it serves as a dependable different to coal sooner or later.

India skilled the driest August in additional than a century when it obtained 36% much less rainfall. Coal reliance that month grew by 13% in comparison with the 12 months earlier than.

“Whereas India seeks to leverage hydropower to steadiness its grid, this supply of renewable vitality shouldn’t be with out its complexities,” Narayan mentioned, explaining that tasks are sometimes delayed. 

“The development of dams and run-of-river tasks for hydropower typically encounters extended delays, intensive gestation intervals, and is contingent on variable rainfall patterns.”

Photo voltaic and wind vitality face the identical hurdles as underdeveloped energy grids curtail progress within the sector. 

“India’s present grid infrastructure shouldn’t be totally geared up to deal with the mixing of variable renewable vitality sources like photo voltaic and wind,” in keeping with Narayan. 

India presently has round 180 gigawatts of put in renewable vitality and goals to achieve 500 gigawatts by 2030, in keeping with authorities company Make investments India.

“Grid-scale battery storage is dear, with provide chain disruptions additional driving up costs as a consequence of occasions just like the Covid-19 pandemic and geopolitical conflicts. These complexities render it difficult to rely solely on renewables for constant and reliable energy era,” Narayan mentioned.

One other concern is that renewables are a frontloaded funding the place “all of your investments occur on the day of set up. You pay for every part upfront,” mentioned Rodrigues from Ember.

“The issue with that’s that you just require quite a lot of financing capability, and there may be restricted financing capability in India,” he added, warning that India’s net-zero objectives can’t be met with out overseas investments.

“Going ahead, we have to discover methods to first part down coal, then we will discuss utterly phasing it out.”

— CNBC’s Naman Tandon contributed to this report.