There are 67 coal mines for sale in India

Welcome back to Climate Weekly! 

Today we are heading to the India, with Seema Prasad, a freelance reporter in Bengaluru, whose recent focus has been on the intersections of health and climate change.


Hi!

My name is Seema and this week I’d like to take you on a deep dive into the world of India’s coal.


Before I do, I just want to recognise how lucky I am. So far, I have managed to evade the coronavirus that has infected more than 12 million fellow Indians, and the second wave is officially here. With 65 million vaccine doses already administered, I hope I’ll be one of the lucky few to avoid COVID altogether.

Now to coal

New research shows that coal generation in India dropped by 5% in 2020. This is a small drop, but it’s perhaps the beginning of a trend. This isn’t just due to COVID, as we saw a similar drop across India in 2019, the year before COVID. 

However, coal demand remains high, especially in Asia. Last year, China and India alone accounted for more than 65% of global demand, which is more than replacing the odd coal plant being shut down in Europe.

According to the International Energy Agency (IEA), global coal demand has changed little since the Paris Agreement, and coal generation worldwide has dropped less than 1% compared to 2015.

And there are 67 new coal mines opening up…

As part of relief measures to boost the economy last year, the Indian government brought in the Atmanirbhar Bharat revival package in June 2020. 

This included policy reforms across energy, agriculture and defence. Out of this, Coal mining got a big boost, through a push for the privatisation of commercial mining.

This comes off the back of a controversial ‘coalgate scam’ which shook the previous government. As is usually the case, this push for privatisation comes with claims it will generate more local jobs and reduce exorbitant expenses on imports.  

In late March this year, the government further announced 67 coal mines for sale. When announcing the sale, Pralhad Joshi, Minister of Coal, Mines and Parliamentary Affairs said that, “We are making coal the driver of economic activities in the country."

A shift to domestic coal dominance

India is the world’s second-biggest coal importer behind China, despite having the world’s fifth largest reserves. In a recent interview, Pramod Aggarwal, the chairman of Coal India Limited (CIL), which produces 83% of the country's coal, said that the present focus is on meeting the growing domestic demand. 

"CIL may step into the role of coal exporter in a phased manner after satiating the domestic demand," Aggarwal said last month. 

These measures come with a focus on improving railway transpiration, but also cutting back environmental clearance procedures that were apparently “holding back” domestic coal supply all these years.

This also signals a desire to reduce reliance on coal imports from Indonesia, South Africa and Australia, which very recently, became India’s largest coal supplier.

According to a recent report by Bloomberg Quint, India’s coal imports slipped by 13.69% compared to the previous fiscal year. Between April 2020 and February 2021, India imported about 30 million less tonnes of coal than the year before.

Billions of dollars needed to increase RE capacity

In 2015, Indian Prime Minister Narendra Modi proposed a target of adopting 175 gigawatts of renewable energy by 2022. So far only 50% of this goal has been achieved. 87 GW has been installed and about 30 GW more is underway. With only a year to go, it seems unlikely that the target will be met. 

For the most part, progress is slow, and there is a clear lack of funds. India needs about $35 billion extra by December next year to make this a reality. 

However, the total installed capacity isn’t the only concern.

At the time of the Paris Agreement, the government pledged to generate nearly 40% of electricity from renewable sources. Currently in India, 71% of our electricity still comes from coal.

According to the Central Electricity Authority (CEA), renewable energy produced less than one tenth of the country’s electricity in 2018-19.

So while we’ve built a lot of new renewable energy, it seems we’re still riding the coal train express, and there’s few signs of that slowing down any time soon.


If you’d like to hear more from Seema, check out our interview together on Spotify


Thanks again for reading this week.

If you’d like to be a guest writer of this newsletter, or make any suggestions on how we can make this better, please let me know

See you next week