Are India And China Taking Divergent Views On Coal Usage?

While China has been attempting to curb pollution, it has been unable to significantly reduce its dependence on coal. After facing a severe energy crisis last winter, the Chinese have upped coal production, while approving new coal plants in the country. The energy crisis had left several provinces without sufficient coal to meet their residential and industrial requirements of coal.

Given the dependence on energy security, the Chinese have decided to ramp up coal production and double down on fossil fuels. Coal outputs from Chinese mines are reaching record levels, while construction of coal-powered plants is ramping up quickly.

The National Development and Reform Commission, the country’s economic planner, has asked mining companies to ramp up production capacity by 300 million tonnes while stockpiling enough for future consumption. Chinese coal output has continually increased, touching 380 million tonnes in December 2021.

In contrast, it appears that India has been trying to reduce its dependence on coal — which is visible from the number of thermal project approvals granted environmental clearances.

In 2015, five projects were granted clearances, with capacity addition of 8,900 MW. In 2017, nine projects with a total capacity of 15,300 MW, were approved — but the numbers have fallen since.

In 2021, only one non-captive thermal project with a capacity of 2,400 MW was approved according to an analysis by the Legal Initiative for Forest and Environment (LIFE). The 2400 MW project is the 3x800 MW NLC Talabira Thermal Power Project.

Research by some advocacy groups Ember and Climate Risk Horizon has suggested that even if India continues shutting down older thermal plants, while not building new thermal plants, it could still cater to its power requirements. The research suggests that India could easily cater to its peak demand through its renewable energy base.

However, some argue that slowing down on thermal, while relying heavily on renewable energy, could possibly lead to an energy crisis witnessed in China, Europe and other places.

Electricity must be consumed instantaneously just as it is produced making renewable sources currently unreliable. These sources of energy are dependent on vagaries of weather and climate. However, with extensive work on energy storage, it is likely that we could see energy storage problems solved over time. Nevertheless, the creation of efficient technology, in addition to mass production and adoption, would take some time.

In addition, low commodity prices over the last few years resulted in investors forcing energy companies to return cash generated, rather than reinvest into the business. As a result, the prices of non-renewable fuel have been on the rise — further constrained by supply chain and geopolitical issues.

Hence, countries such as China have put green energy plans on hold, while augmenting more dependable sources of energy. Once bitten twice shy, the Chinese government sees energy security as a ‘mounting’ economic and security risk. In the last two months of the current calendar year, Chinese coal production has already increased by 10 per cent, to 687 million tonnes.

Apart from thermal plants, environmental clearance numbers for coal mines in India appears to be on the downtrend as well. According to a report compiled by LIFE, coal mine approvals fell from around 46 in 2015 to 17 in 2018. A major part of these approvals, was for new mines, while the balance was for expansions at older mines.

However, older mines had applied for much larger production capacities, compared to new mines. Nevertheless, the overall capacity approved has fallen from 129.05 MTPA in 2015 to 53.08 MTPA in 2018.

Today, it appears that India and China have taken divergent stances on the usage of coal. Both supporters and critics of fossil fuels have made strong arguments from each side. While green energy has its benefits, we clearly cannot replace fossil fuels immediately. Some experts have supported alternate energy sources such as nuclear energy, which do not pollute the atmosphere while supplying uninterrupted energy. Only time will tell whether slowing down on thermal energy production is a smart move or a potential disaster.

This article was first published on Business's Newsletter, and has been republished here with permission.