Mapping costs for early coal decommissioning in India

To stop the further acceleration of the climate crisis, the world needs to transition to clean energy sources. To realise this transition, countries world over need to direct considerable investment flows to decarbonisation activities; as per Organisation for Economic Cooperation and Development (OECD) estimates, the world needs $6.9 trillion ( ₹5.04 crore crore) annually to meet its 2030 nationally determined contribution targets alon.

Given that developing countries have limited economic resources, prioritising decarbonisation efforts on the basis of impact is needed.

In India, the electricity sector accounts for 40% of all greenhouse gas (GHG) emissions in the country (as of 2016) and thus presents one such decarbonisation pathway (MoEFCC 2021). Recognising this need, India has set a target of achieving 450 GW of renewable energy (RE) by 2030 (over 4.5 times the current installed capacity).

However, due to the build-up of coal-based assets over the last two decades, India also has around 10% (208 GW) of the world’s installed coal capacity (MOP 2021). Though coal supplies over 70% of the total electricity in the country, these coal-based assets are a significant contributor to the total GHG emissions by the electricity sector.

Under the National Electricity Plan (NEP) 2018, the Central Electricity Authority (CEA) has identified over 25 GW of excess coal-based capacity for retirement by 2027. However, the retirement process continues to be slow, even for the list of earlier identified plants.

The slow retirement of old inefficient assets combined with low demand growth, improving RE economics, and increasing penetration has resulted in a high share of inefficient plants in the system, putting pressure on the coal assets with system-wide low utilisation (Lolla 2021; Zeniewski and Singh 2021).

Hindustan Times
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