From Coal to Solar Goals

Air pollution has been highlighted time and again as the major health emergency that India has faced in the recent times, only now, it got seriously severe. All of us by now have acknowledged that this health hazard is not just the contribution of one sector, but the result of various sectors contributing to the overall pollution in varying percentages. Thermal power generation and transportation are the two biggest sectors contributing to the rising air pollution levels across the country due to their high dependence on carbon based fossil fuels.

Implementation of a comprehensive, systematic and time bound ‘National Clean Air Action Plan’ accompanied by regional and local actions is indispensable. Reducing air pollution to protect public health, is a crucial step to be taken.

Why is coal such a bad energy choice after all?

Between 2011 and 2012 alone, emissions from Indian coal plants resulted in 80,000 to 115,000 premature deaths and more than 20 million asthma cases from exposure to total PM10 pollution.

Coal based power plants will soon be forced by the courts and the governments to be shut down due to the high pollution, just as was the case with the Badarpur plant that was shut down during the most recent winter in Delhi. Such shutdowns will incur great financial costs and risks for many thermal power plants. With the recent water scarcity issue also crippling large parts of India, coal power companies have already lost nearly 7 billion units in electricity that was generated, but not used. An estimated revenue of Rs. 2,400 crore was lost in the first five months of 2016 alone.

Such a combination of poor financials and eroding social license, is making most leading global banks and investors move away from new coal investments. Banks that have so far committed to restricting financial funding for new coal mines, power plants and coal companies include - the World Bank, Deutsche Bank, Goldman Sachs, Société  Generale, Crédit Agricole, Commerzbank, Standard Chartered, Credit Suisse, JP Morgan Chase, UBS, RBS, Morgan Stanley, ING and  BNP Paribas.

The Central Electricity Authority’s draft National Electricity Plan says India does not require any new coal plants (apart from those under construction) till 2027 at the least. Even plants currently under construction are unlikely to be utilized till 2022, raising the serious risk of stranded and underperforming assets. The rationale behind questioning the need for any new investment in the coal sector comes from the fact that coal based power plants are already running at a low capacity (Power Load Factor of 59.65 % between April and December 2016 as against the normative PLF of 85% as suggested by CEA), making it costlier for companies to generate electricity at such low PLF.


As of now, all power plants in the country are expected to comply with the new notified emission standards given by the Ministry of Environment Forests and Climate Change (MoEFCC) by the 7th of December 2017 to reduce air pollutant emissions. While it is paramount that thermal power plants comply with standards, retrofitting compliance will  drive up the cost of electricity to a great extent.

How then will India’s future energy demand be met, you wonder?

With the rapidly changing economics of solar PV, coal is no longer the answer to India’s energy requirements. Cost of battery storage systems, one of the biggest drawbacks of solar in terms of intermittency is also plummeting and the issue could soon be resolved.


Bloomberg New Energy Finance, PwC, McKinsey and many other analysts have predicted that solar will be the cheapest new electricity source for India within a few years. The most recent  bid of Rs 2.97 (the lowest so far) for a 750 MW solar park in Rewa has proved that solar got cheaper. There is a high likelyhood of  the trend continuing on into the future.

By setting ambitious renewable energy and energy efficiency goals, India has demonstrated global leadership in the fight against climate change, attracting significant foreign investments in the solar sector. Going back to the era of coal expansion now, is not financially or politically feasible for India, or the world.

Coal based power generation not only costs us human lives, clean air, forests and livelihoods, but also costs us a whole lot of wasteful financial, environmental and social investment. It is imperative that we move far away from the most polluting fuel of the past and move with more commitment towards sustainable sources of energy.

Sunil Dahiya is a Campaigner at Greenpeace India