Why Coal Will Continue To Be Integral To India's Overall Energy Mix

There are several impediments to making renewable energy a key component of a sustainable energy future and attaining stipulated renewable energy targets

learn more about Mahesh Singhi

By Mahesh Singhi


Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Coal-powered thermal plants account for around 72 per cent of the country's power generation. Though BP's Energy Outlook has estimated that coal's share in India's primary energy consumption will decline from 56 per cent in 2017 to 48 per cent in 2040, it will continue to dominate more than half the energy mix. It is also likely to be ahead of renewable energy sources expected to register a significant rise in production levels. Even NITI Aayog, the government think tank, has estimated that coal's share in the overall energy mix will be around 44 per cent in 2040.

India has launched one of the world's largest clean-energy expansion programs and called for climate-compatible growth by committing to generating 175 gigawatts (GW) of energy from renewable sources by 2022. However, there are several impediments to making renewable energy a key component of a sustainable energy future and attaining stipulated renewable energy targets:

1. Identification and acquisition of vast expanses of contiguous land without impacting the ecology of the surrounding areas

2. Power evacuation from remote generating areas and transmitting to power consumption areas

3. Energy storage for grid stability

Land acquisition problems

Solar and winds power plants need to be set up over large contiguous geographical expanses. While acquiring land for solar and wind energy projects, local populations, mostly landless and marginalized communities are often displaced and their livelihoods and survival threatened. Solar park hotspots such as Rajasthan, Gujarat, Madhya Pradesh and Kerala have witnessed community pushback through protests and legal recourse.

The Gujarat government has evinced plans to develop a 41,500 MW hybrid renewable energy park in Kutch. The state government has cleared the revenue department's proposal for allotment of 60,000 hectares of land for this project. The land finalised for the Kutch project is considered "wasteland" by the government but that may not be the case for the local people and could be an important area for them, including migratory birds like flamingos. There have been increasing cases of bird deaths due to collision with power lines. Recently, the Rajasthan High Court stayed work related to a solar energy park in Rajasthan over land issues after locals filed a case against the land allocated for the project which the Rajasthan government had termed as a wasteland.

Adivasi and other nomadic communities in Gujarat and Madhya Pradesh have fought for their right to use land they deemed necessary for their livelihood. These protests were curtailed by governmental authorities without resolving the demands. Kasaragod Solar Park in Kerala faced objections from the villagers, resulting in the government scaling down its capacity from 200 MW to 50 MW.

Power evacuation

For evacuation of large-scale renewable energy, the Intra State Transmission System (ISTS) project has been sanctioned by the Ministry of New and Renewable Energy for implementation by eight renewable energy producing States. The purpose is to evacuate approx. 20,000 MW of large-scale renewable power and improve the grid in the implementing States. The project includes laying approx. 9400 km transmission lines and installing substations with a capacity of approx. 19000 MVA to be completed by FY21, which is now facing considerable delays.

Energy storage

With renewable energy (wind and solar) forming about a quarter of the installed power generation capacity currently, the percentage share in consumption of units is only about 6-10 per cent, (notwithstanding PLFs). With hardly any facility to store grid scale renewable electricity as of now, the electricity produced in the power plants and fed into the grid should ideally be the same as the electricity consumed. If the electricity demand is more than the supply, the frequency at which the grid equilibrium is maintained (50 Hertz) will come down and vice versa. The lack of battery storage is due to changing technology of batteries and the high cost of investment, despite the costs falling drastically over the past decade. As per a December 2019 BloombergNEF report, battery price which was more than $1,100 per kilowatt-hour (kWh) in 2010, came down to $156/kWh in 2019. "The price is expected to reach $100/kWh by 2025;

Though efforts are being made in the right directions to increase power generation from renewable energy sources, India still has not developed a policy to phase out coal. The Central Electricity Authority's (CEA) report on "Optimal generation capacity mix for 2029-30" envisages adding another 64 GW of coal plant capacity to its system by 2030. India is the 2nd largest producer of coal globally and has the 4th largest reserves of coal in the world. The government's landmark decision to end its monopoly in commercial coal mining by allocating non-captive coal blocks to private players is expected to result in significant efficiency gains and growth linkages for the sector.

Mahesh Singhi

Founder & MD, Singhi Advisors

Related Topics

Starting a Business

The Delivery Wonderboys

Aadit Palicha and Kaivalya Vohra, 20, Co-founders, Zepto

Business News

What Does the Banking Crisis Mean for Startups and Small Business Owners?

Author, CPA and business owner Gene Marks break down everything entrepreneurs need to know about the impact of the SVB collapse.


21 Productive Things to Do During Your Commute

How to use this frustrating "wasted time" to get smarter, more focused and re-energized.


3 Innate Traits You Need to Survive the Rollercoaster of Entrepreneurship

If you are uncomfortable with the up-and-down nature of entrepreneurship, you might not be cut out to be an entrepreneur.

Business News

Sharon Stone After SVB Collapse: 'I Just Lost Half My Money to This Banking Thing'

The actor addressed her financial woes during a cancer fundraising speech following the Silicon Valley Bank fiasco.