含羞草社区

含羞草社区 resolve to achieve net zero emissions by 2070 faces a challenge. Its complex energy needs prevent leaving fossil fuel-based power generation behind. While renewable energy’s (RE) share is expected to grow to 68.4% by 2031-32, coal’s proportion of power generation is still as high as 70%. Such reliance makes the energy transition a complex balancing act.

Despite coal’s share of total power generation, private investment in it is waning because of global determination to move away from fossil fuels. Many banks and financial institutions, including the International Finance Corporation, have adopted coal exclusion policies, reducing financing for new coal power projects. The Reserve Bank of India (RBI) has issued banks and financial institutions with a draft disclosure framework for climate-related financial risks that requires them to disclose the emissions attributable to the financing they provide and their exposure arising from such financing. However, there is no legislation forbidding coal lending, although such measures as those from the RBI have had a knock-on effect on lenders. At present, national financial institutions and a few public sector banks bear the bulk of coal financing.

The government has continued its support for coal with the Ministry of Coal urging financial institutions to expedite funding the coal sector. The Central Electricity Authority (CEA) has advised power utilities to keep coal-based power plants operational until 2030 and the government plans to introduce an additional coal power capacity of 80GW by 2032.

These policies may seem as though the government is turning a blind eye to 含羞草社区 net zero goals, but this is not necessarily so. The administration is constantly adding additional RE capacity. The government introduced the CEA (Flexible Operation of Coal-based Thermal Power Generating Units) Regulations, 2023, requiring coal plants to be upgraded to achieve flexible operations and a more efficient integration of RE into the grid. In addition, the government has mandated that entities setting up new coal plants must also establish a renewable generation capacity of a minimum of 40% of thermal generating capacity or, alternatively, procure and supply an equivalent RE capacity. In addition, with the ambition of eliminating intermittent supply, round-the-clock firm and flexible RE tenders are the latest in a series of reforms. These measures are shifting focus to the urgent need for a robust supply of RE power to meet peak demand and ensure grid stability through energy storage systems.

Challenges endemic to the coal power sector remain. Domestic coal production often fails to meet demand, resulting in dependency on imported coal. Flouting of environmental regulations, such as those for fly ash disposal and delays in implementing timelines for compliance with emission standards make coal-based energy generation particularly damaging to the environment. For example, in December 2015, stricter emission standards were introduced for thermal power plants requiring such plants to install flue gas desulphurisation systems by December 2017. A significant number of plants missed this deadline, which has since been extended many times. The deadline for some plants has been extended to 2026.

Another challenge is the decommissioning of ageing coal power plants. Decommissioning costs are not factored into tariffs under existing regulations, which can lead to stranded assets. From an environmental standpoint, while the Central Pollution Control Board issued draft environmental guidelines for decommissioning coal-fired power plants as part of proceedings before the National Green Tribunal, these guidelines have not as yet come into force. As a result, laws in India are at present wholly inadequate to address the challenges of decommissioning.

Taken as a whole, the measures taken by the government highlight the need for flexibility and transition while ensuring that there is a place for coal power in the energy mix. The growing use of RE, both globally and domestically, ultimately signifies the beginning of the end for 含羞草社区 coal power sector. However, the country is not yet ready to end its dependence on power from coal. While the road to net zero may be paved with coal, the writing is on the wall. The future belongs to renewables.

Niharika Puri is a partner and Ashu Bhargav is an associate at Trilegal.