Momentum is building in India’s massive electricity transition – which could mean an end to the nation’s coal imports may be not so far off.
A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) says Energy Minister Piyush Goyal’s hope for India to cease thermal coal imports is ” entirely feasible”.
While the IEEFA models a 500 terawatt hours increase in net electricity demand to 1,318TWh per annum out to 2021; there is plenty in the transition to help meet this demand.
For example, just by reducing aggregate technical and commercial (AT&C) losses by 1% annually, this could deliver a 114 TWh saving. Improvements in energy efficiency of just 1% could provide a 75 TWh saving.
Solar power installs of 75GW by 2021-22 could account for 110TWh or 22% of the needed electricity and increasing wind power to 60GW could deliver 19%.
Finally, a combined capacity expansion of nuclear, gas, biomass and hydro could deliver another 25%.
“The net result is that India could supply net electricity sufficient to underpin 7% annual gross domestic product (GDP) growth in the seven years to 2021 -22 (60% overall) with coal-fired electricity delivering only 32% of the overall expanded electricity production required,” says the IEEFA.
So where will this coal come from?
India’s government is also pushing to double Indian domestic coal production to 1,500Mtpa by 2021-22; which IEEFA says will likely end up in an oversupply of 400 million tonnes annually.
Already, power plants in India relying on imported coal are reporting losses.
While the road ahead is generally better news for India’s energy future and the environment, it’s not so good for coal-lovers in Australia (including our PM) as the nation is one of Australia’s largest coal export partners.
It’s not the first time IEEFA has set alarm bells ringing among coal investors. In May last year, it warned international coal projects that rely export markets such as India, including Australia’s Galilee Basin, face major financial risks and that the global coal industry’s economic models were seriously flawed.
IEEFA’s latest report, “India’s Electricity Sector Transformation”, can be viewed in full here (PDF)
