India can’t phase out coal immediately, it must plan for long-term just transition
COP28 final document released after the Dubai UN Climate Change Summit has dropped references to “limiting the permitting of new and unabated coal power generation.” This leaves room for India’s contingency plan to add more coal-based capacity than envisaged earlier in the short to medium term, to avert an energy crisis in the fast-growing economy. India has emerged as a renewable energy star rivalling China's growth rate and outpacing European heavyweights which deployed record funding on energy transition efforts last year. But even with such rip-roaring green energy momentum, India's utilities still struggle to keep up with the country's voracious energy demand growth and had to crank coal use to record highs alongside the breakneck growth in renewables. India’s coal sector will remain in expansion mode for another decade. About 48 gigawatts (GW) of thermal power capacity is estimated to be added to the existing coal-based thermal power base of 211 GW by 2032.
The final document called for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade” which came against the “phase-out” of fossil fuels. For India, this means adding RE capacity at a greater pace but not doing away with its dependence on coal to meet its energy requirements and demand. India’s approach so far has been that without making any fresh commitment, it wishes to abide by the nationally determined targets it has already announced. Although India is pushing for renewable, non-fossil-based energy, the share of coal in the energy basket is going to remain significant in the years ahead to ensure affordable energy availability. As coal and mines minister Pralhad Joshi told Parliament, "In India, the transition away from coal or Just Transition is not happening in the foreseeable future."
However, the next wave of power plant construction in India is likely to be the mass construction of renewable energy assets over the next few decades. While projections from government agencies about India’s power future have varied, the Central Electricity Authority’s report on Optimal Generation Capacity Mix for 2029-2030 establishes a clear expectation of sustained RE growth. According to this report, by 2030, solar and wind will make up almost 51 per cent of total generation capacity (up from less than 20 per cent in 2019) and almost 31 per cent of all generated power (up from 8.3 per cent in 2019). If these projections materialise, they are likely to have major fiscal consequences for states. The fact that the coal mining sector is also a major employer, a transition from coal would be a complex process. While it cannot do away with coal now, India must start working on a just transition.