India and China leading inevitable slowdown in coal expansion: New Report

Press release - March 22, 2017
The Boom and Bust Report by Sierra Club, CoalSwarm and Greenpeace hails slowdown in coal investments and explosive growth in renewable energy in China and India as a potential breakthrough in the fight against climate change and air pollution; commitments to Paris Agreement may not be a distant dream

New Delhi | March 22, 2017 | Cuts in coal-based power plants and a strong growth in renewable energy has caused  a significant slowdown of coal expansion in Asian countries, particularly India and China. A report titled,  Boom and Bust 2017: Tracking The Global Coal Plant Pipeline [1], in its third annual survey of the global coal plant pipeline points out that 68 GW of construction in India and China is now frozen at over 100 project sites. However, the survey also points to ongoing over-investment in coal-fired power in India, potentially wasting vast amounts of capital.

Jointly authored by Sierra Club, Greenpeace and Coalswarm; the survey has found that globally, there has been a 48 percent decline in the overall pre-construction activity, a 62 percent drop in new construction starts, and an 85 percent decline in new Chinese coal plant permits. 

In India 31 coal plant units at 13 sites totalling 12,725 MW of capacity have been stalled, mainly due to frozen financing [2]. Power demand in India has not kept pace with expanding capacity. Besides this, the declining cost of renewables [3] has caused many financial backers of coal projects to withdraw support, leading to a further freeze in construction activity.

The draft National Electricity Plan (NEP) [4] released by the Central Electricity Authority (CEA), in December 2016, states that no further coal power capacity beyond that currently under construction will be needed until at least 2027 and the power from ones which are currently under construction will required only after 2022.

“Despite the slowdown in under construction of new plants, and Plant Load Factors dipping to an all-time low [5], there are more than 170 GW of power plants under various stages of approval. The MoEFCC continues to clear further coal power projects and the government continues to stress upon its target of mining 1.5billion ton of coal by 2020,” says Sunil Dahiya, Campaigner, Greenpeace India. Last year Greenpeace India released a report on the coal power overcapacity [6], which estimated that India would be wasting Rs 3.2 lakh crore on idle coal power plants by 2022.

“However, in China and in other parts of the world 2016 marked a veritable turning point ” said Lauri Myllyvirta, senior global campaigner on Coal and Air Pollution at Greenpeace, “China has stopped new coal projects after the astonishing growth of clean energy has made new coal-fired power plants redundant, with all additional power needs ably covered from non-fossil sources since 2013. Closures of old coal plants drove major emission reductions especially in the U.S. and UK, while Belgium and Ontario became entirely coal-free and three G8 countries announced deadlines for coal phase-outs.”

Continued investment on coal is not only an economic challenge. Coal is a primary source for causing air pollution that leads to approximately 12 lakh deaths in India annually [7]. While China has been cutting down on its coal consumption for the past three years and has vowed to cut 150 million tonnes [8] of coal output capacity this year,  India has gone a step backward with the recent news of postponing the implementation of emission norms for coal fired thermal power plants [9].  China, in contrast, has been taking several initiatives to implement stronger emission standards for thermal power plants. It is estimated close to 25% of Delhi air pollution is contributed by the secondary particles produced by thermal power plants and diluting the emission rules would be a step backwards in the fight against the health crisis due to air pollution in India.

This global slowdown in the coal power sector is a great opportunity for keeping global warming below 2 Degree Celsius as per the Paris Agreement. Thus the commitment of achieving the 1.5 degree target looks more feasible. “From being one of the countries most vulnerable to the impacts of climate change, India is now in a  position to assume leadership in fighting both climate change and rising air pollution crises. Our ambition for massive upscaling of renewable energy is definitely a big step in the right direction, but we need to go the full mile by rationalising further investments on new coal but focus on reducing emissions from existing plants,” says Dahiya.

 

Notes to the editor:

[1] Link to Boom and Bust: English: http://endcoal.org/wp-content/uploads/2017/03/BoomBust2017-English-EMBARGO-MARCH-22.pdf

Hindi: http://endcoal.org/wp-content/uploads/2017/03/Boom-and-Bust-2017_Hindi_Final.pdf

[2]http://www.sourcewatch.org/index.php/Troubled_Indian_Coal_Plant_Construction_Sites

[3]http://energy.economictimes.indiatimes.com/news/renewable/ieefa-says-historic-low-tariff-of-rs-2-97-per-unit-a-momentous-solar-event/57093015

[4] http://www.cea.nic.in/reports/committee/nep/nep_dec.pdf

[5]http://indianexpress.com/article/business/business-others/demand-sputters-thermal-plant-load-at-10-year-low-4513162/

[6]https://secured-static.greenpeace.org/india/Global/india/report/2016/Power%20scenario%20briefing-%20overcapacity%20FInal%20Ver.pdf

[7]https://secured-static.greenpeace.org/india/Global/india/Airpoclypse--Not-just-Delhi--Air-in-most-Indian-cities-hazardous--Greenpeace-report.pdf

[8] http://www.reuters.com/article/us-china-parliament-steel-coal-idUSKBN16C00H

[9]http://indianexpress.com/article/india/green-norms-unmet-thermal-plants-get-more-time-and-lower-standards-ntpc-4514946/