Why India’s green push needs balancing, why COP28 coal breather is important

While India has consistently stepped up renewable capacity addition, policymakers have realised that the country simply cannot keep adding more green capacity unless it has viable energy storage options.

1. The COP28 Fallout: The recently concluded 2023 United Nations Climate Change Conference, COP28, witnessed heated debates, with the most contentious issue being the phase-out of fossil fuels.

• The final agreement emphasized a "transition away from fossil fuels," omitting the explicit mention of "phase-out" due to strong opposition, particularly from countries like India, China, and South Africa.

2. India's Coal Pivot: Just days before COP28, India's Union Power Ministry surprised many by announcing plans to increase coal-powered generation capacity. The decision marked a policy reversal, deviating from the earlier emphasis on renewable energy.

• India aims to add at least 80 gigawatts (GW) of coal capacity by 2031-32, indicating a shift in focus towards coal for baseload capacity.

3. Renewables Challenge: India has significantly increased renewable capacity over the past decade, becoming the world's third-largest producer of renewable energy.

• However, the operational challenges of integrating renewables into the grid, particularly the issue of intermittency, have prompted policymakers to reconsider the rapid expansion of green capacity without viable energy storage options.

4. Storage Conundrum: The surge in renewables has led to a grid powered increasingly by solar and wind, creating challenges for grid managers due to intermittency.

• The lack of effective energy storage options means that state-owned distribution companies (discoms) often resort to thermal or nuclear generation to meet base load demand, leading to high fixed costs.

5. Coal as Base Load: Recognizing the need for baseload capacity, the decision to add 60 GW of fresh coal-fired capacity, in addition to the existing 27 GW under construction, underscores the importance of coal in the energy mix.

• This move was seen as a pragmatic response to the limitations of renewable energy in providing a consistent power supply.

6. Storage Alternatives: Energy storage is deemed crucial to counter the variability in renewable generation.

• While lithium-ion storage batteries are considered unviable, the government is exploring alternatives such as hydrogen and hybrid generation models blended with off-stream pumped storage. These measures aim to balance the intermittent nature of renewable sources.

7. Renewables Cost Challenges: The concept of renewables achieving grid-parity is questioned, with the acknowledgment that the cost of standby thermal power makes renewable power almost twice as expensive on paper.

• The renewables challenge is further compounded by rigid power purchase agreements (PPAs) and the expensive nature of current storage options.

8. Future Energy Landscape: The decision to boost coal capacity aligns with the acknowledgment that coal-fired capacity needs to serve as base load, at least until viable energy storage solutions are in place.

• The divergence from the earlier draft's prescription for coal-based capacity indicates a strategic move to address the evolving challenges in India's energy landscape.

Way Forward:

• India faces a complex energy dilemma, balancing the resurgence of coal for baseload capacity with the challenges posed by the intermittent nature of renewables and the pressing need for effective energy storage solutions.
• The decisions made in the aftermath of COP28 signal a nuanced approach towards achieving a sustainable and reliable energy mix.