If India were to grow its electricity system based on coal (as China has done), would it derail the global climate?
India’s Power Minister, Piyush Goyal, has made it clear on a number of occasions that India plans to significantly ramp up its coal-fired power plant capacity in addition to renewables. The country has no other choice, he argues, in order to generate the vast amounts of power the country needs. In January 2015, India had a total installed capacity of 259GW, of which 156GW, or 60%, was coal. Due to an above average plant load factor, coal contributed 67% to the electricity generation, according to the World Bank. Will India stay on the same track, or will it be able to fundamentally change its energy mix?
Bridge to India has modelled India’s power requirements and associated emissions and compared a “coal-heavy” scenario with a “solar-heavy” scenario. Why solar? Because, if you look at the available energy options, it is the only alternative that can potentially supply the bulk of the energy needed.
In our model, we assume that India’s power requirement grows fast, by an average 7% per annum. This is roughly in line with past growth rates and is lower than the growth we have seen in China in the past twenty years. In India, this would mean that by 2035, annual power generation would increase by a factor of 5 from the current ca. 1,000TWh to around 5,000TWh.
Such a growth rate takes into account that India’s population will grow, that it will industrialise in order to provide the levels of employment needed (this increases the energy intensity of the economy), and that there will be step changes in consumption patterns as the population becomes more well off (e.g. more cooling). We also assume that India will close its current grid power deficit and find a way to providing electricity to those 300-400 million who are currently un- or severely underserved.
On the other side, there will be improvements in the efficiency of power generation, transmission and consumption. India’s grid, for instance, could reduce distribution losses from the current 20% or more to international best practices of around 5%. Better urban planning and more energy efficient architecture can also go a long way in keeping a lid on growing power demand. An effect we did not take into consideration, because it is difficult to quantify, but that is nevertheless likely, is an increasing electrification of the energy system: away from traditional biomass and oil, towards solutions such as electric heating and mobility. Of course, if India fails to develop, which would be a terrible tragedy for one-sixth of the global population, the growth in power demand will be less.
How can this vastly increased power requirement be generated? According to our calculations, under a “coal-heavy” scenario, India would increase its coal-fired power generation capacity from the 156GW in early 2015 to 677GW in 2035. Solar would still grow at 20% per annum to a sizable 153GW, but contribute only around 6% to India’s power requirements in 2030.
The alternative scenario is “solar-heavy”. Here, India builds new solar plants at a growth rate of 35% per year over the next 20 years. It would then have 18GW by 2020 (against the government’s target of 100GW) and more than 1,600GW by 2035. This is not a precise roadmap, since the details of such a ramp-up depend on political decisions. It is simply a uniform, assumed growth trajectory. However, it will make a lot of sense to build the bulk of the solar capacity later in the period when solar will presumably have become much cheaper still. For the same reason, this scenario also foresees new coal plants (as a bridge technology) to the tune of 94GW.
An alternative to coal
How would these two choices affect India’s and the world’s carbon position? Will India’s stance at the global negotiations in Paris be credible, if it cannot present a real alternative to the default “coal-heavy” scenario?
First, let’s look at the carbon budget that is available to us as mankind. If we want to have a reasonable (2/3) chance of limiting global warming to 2 degrees (which would already have serious implications, but might not set in motion self-reinforcing effects), then our global carbon budget is 1,000 gigatons (Gt) of CO2 equivalent. This is the total amount of greenhouse gases we can emit into our atmosphere starting at beginning of industrialisation in the late 19th century, when we first burned large amounts of fossil fuels.
Until today, we have already emitted 589Gt of CO2 equivalent – 58% of our global carbon budget. That leaves us with 421Gt. At the current rate, we will have exhausted this sometime in the year 2039. Now, let us assume that India is historically unburdened and has not emitted anything so far and let us assume that it is entitled to of the global carbon budget because it has one-sixth of the world’s population. Then, India’s total carbon budget would be 167Gt of CO2e.
Another approach, if you prioritise survival over justice, is to take only the remaining budget into account. One could take the 421 and divide it by 6 to adjust it for India’s population. That would come to 70Gt of CO2e. To take into account historical emissions (fact is, that countries like the US, Germany or Japan have already exceeded their budgets), one could add, say, 50% to that. So India’s budget would be 105Gt of CO2e.
Thus, taking into account both India’s population and historical justice, the carbon budget India has is limited to 105-167Gt CO2e. Since power generation typically makes up around 25% of a country’s greenhouse gas emissions, India’s power sector would have a budget equivalent to 26-42Gt CO2e. Again: for the purpose of this argument, I am assuming that India has not emitted anything so far and this entire budget is still available.
Now, let’s assume that India goes for a “coal-heavy” scenario and builds an additional 521GW of coal (on top of the existing 156GW it already has). A best-in-class coal-fired power plant currently emits 790kg CO2e per megawatt-hour. Indian plants emit on average more than 1,000 (it is difficult to get reliable data). Many of them, even the new ones, are sub-critical and Indian coal is particularly high in ash. We can expect that plant efficiencies will improve over time due to technological process. So let us assume that India’s future coal plants will emit on average 600kg CO2e per MWh.
Let us further assume that a plant’s lifetime is 30 years (many currently operating Indian coal-fired plants are significantly older) and that it runs for 6,500 hours per year (a 74% plant load factor). Then, the emissions of all the new plants alone, over their lifetime, would be 61Gt of CO2e. This is 145% of what India’s carbon budget would be under the “justice first” approach or 240% of India’s carbon budget under the “survival first” approach.
In a “solar-heavy” scenario, on the other hand, wherein India would need to build only 94GW of new coal-fired power plants, extra emissions would be 11Gt of CO2, in line with the carbon budget. This would leave some room for past emissions, future emissions of existing plants and perhaps a contingency budget.
Thus, a “coal-heavy” scenario in India would be a terrible and indefensible choice from the point of view of the global climate. Of course, carbon capture and storage could minimise the emissions, but the technology is commercially far less attractive than low carbon generation alternatives.
A “coal-heavy” scenario would also be a terrible choice from India’s own point of view. Building so many coal plants and not letting them run their lifetime course would make coal power economically much less attractive. That is especially so, if the associated new infrastructure (rail, ports, grid) is also taken into account. Add to that the heavy, negative externalities of such a vast coal programme – environmental pollution, water consumption and health (India already has some of the most polluted cites in the world). China is just learning the true cost of coal. India does not need to repeat China’s mistakes – especially since it has a choice that China did not have when it started building its energy system 20 years ago: cheap renewables.
The good news is: India already has one of the world’s most ambitious solar programmes and the political mindset for a “solar-heavy” scenario. Now, we just need good implementation and some patience. And we need to add another “0” to India’s 100GW solar target.
Tobias Engelmeier can be followed on Twitter at @TEngelmeier. More on Bridge to India's work can be found here.