Energy trends cast doubts on coal’s future in India

• 6 years ago (2017-08-10)
• David Flin

Asia 846 Coal 273

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Over the last two years, coal consumption in India has slowed to its lowest level in two decades, despite the economy growing at an annual 7 per cent. Thermal power plants have been running below full capacity for years, and as of June, were operating at only 57 per cent of total capacity, the lowest level ever.

Tim Buckley, Asia Energy Finance Director for Energy Economics and Financial Analysis, said: “India’s future coal demand could actually be near flat. The technology-driven changes are happening faster than predicted.”

The rate of increase in coal consumption in India is now the slowest it has been since 2000. Buckley said that India’s coal consumption might peak within the next decade, assuming an annual growth in electricity demand of 6 per cent.

Significant factors in reducing coal consumption includes fast progress in adding renewable energy capacity and new measures to improve energy efficiency. Renewable energy generating capacity is expanding by 20 GW a year, towards a goal of 175 GW by 2022.

Piyush Goyal, India’s Energy Minister, has pledged to reduce grid transmission losses by targeting leakage and theft. Reducing these losses from the current 24 per cent to 15 per cent over a decade would mean an improvement in effective capacity of about 1 per cent annually.

Pre-washing coal means that Indian coal-fired power plants burn less to produce the same amount of power. In addition, new coal-fired plants in India are required to use supercritical technology to further raise plant efficiency.

The Indian Government has said that, given current trends, there is no need for additional coal-fired capacity for at least 10 years. However, it will continue with the 50 GW of projects already underway, which will enable the retirement of 34 GW of old, inefficient, heavily-polluting plants.