Read The Times Australia

Daily Bulletin

India is hedging its bets on coal to bring power to the people

  • Written by: Tapan Sarker, Senior Lecturer, Department of International Business & Asian Studies, Griffith Asia Institute, Griffith University
image

As the world moves to combat climate change, it’s increasingly doubtful that coal will continue to be a viable energy source, because of its high greenhouse gas emissions. But coal played a vital role in the Industrial Revolution and continues to fuel some of the world’s largest economies. This series looks at coal’s past, present and uncertain future.

More than a fifth of India’s population lacks access to electricity, posing a major development challenge. India’s Prime Minister Narendra Modi has promised to bring affordable access to electricity to all of these people by 2019.

While Modi has committed to increasing renewable generation, India is also increasing coal production. India is the world’s third-largest coal producer and its second-largest coal importer.

This is creating a growing tension between development and India’s efforts to reduce greenhouse gas emissions to combat climate change.

Transforming economies

The world economy is changing faster than ever and Asia is at the forefront of its transformation. The growth, led by China over the past decade and more recently by India, shows that Asia has significant progress to make. But there are enormous challenges in realising the dream of the Asian Century.

For instance, in India, 22% of the population is living below the national poverty level. Only 47% of the households have access to a toilet, while 105 million people lack access to clean drinking water and 240 million people don’t have access to electricity.

But there is also bright news for India. The country’s economy is growing quickly and will soon surpass China’s. The Organisation for Economic Co-operation and Development (OECD), in its recent interim economic outlook, has predicted that India’s Gross Domestic Product (GDP) will grow by 7.4% in 2016 and 7.3% in 2017.

In his electoral victory speech, Modi promised a “shining India” of new hopes and aspirations. The reality, however, is far more complex.

Resources are the focal point of this tension, particularly the increasing demand for energy. India’s energy demands will increase significantly, driven by rapid urbanisation, improved electricity access and an expanding manufacturing base.

Energy security is closely linked with food and water security, which are the backbones of the nation and a growing challenge in the face of climate change.

Indian government and businesses are addressing these issues by managing supply, increasing production of coal-based thermal plants and growing renewable energy sources. Coal supplies around half of India’s total energy supply.

Will constraints on resources, particularly access to affordable coal, disrupt India’s economic growth?

What role for coal?

India is the world’s third-largest producer of coal for electricity. While production has increased over the past few decades, the pace of growth has been insufficient to meet demand. Consequently, India has become more reliant on imported coal.

India’s thermal coal imports have increased from almost zero in the 1990s to having it overtake Japan as the world’s second-largest importer in 2013. The Indian government seems to promise adequate supply to its coal-fired electricity generation capacity by expanding its coal production as well as encouraging imports.

For example, the power and coal minister, Piyush Goyal, stated last year that the nation would step up domestic production and stop imports of coal for electricity (not coal for manufacturing) by 2017. However, growing economic growth and population may not allow this.

The Modi government’s plans to give access to affordable electricity to all Indians within the next five years cannot be achieved without importing coal. During the recent visit of India’s energy minister to Australia, the minister admitted that the country will need more coal imports, possibly including from Australia.

Although in the short term the case for Australian coal in India may be weakening due to the current global economic slowdown, India will have to rely on imported coal at least in the immediate future to increase its economic growth. This is reflected by the case of Adani, which is trying to develop a huge Carmichael coal mine in Queensland to supply India with thermal coal.

India’s domestic production of coal is constrained for a variety of reasons. India’s coal reserves are not only insufficient but also unevenly distributed among regions.

A further challenge related to the energy sector is a lack of private participation. Until 2014 coal mining was allowed only for government and private companies directly using coal for electricity and manufacturing.

The Modi government amended this rule to enable private companies to mine coal for sale in the open market. This may help create a more favourable coal market for both foreign and domestic investors and increase domestic production.

Although the Modi government is keen to increase production of domestic coal mines through privatisation, challenges still remain, such as pollution. The costs associated with pollution from coal-fired power stations are very large, as we can see from China.

China’s health minister from 2007-13, Chen Zhu, stated that lung cancer is now the leading cause of death in China as a result of pollution. This required China to spend an extra US$278 billion over five years to control pollution, mainly caused by coal-fired power plants.

India will have to tackle a very similar situation in the future. Hence, coal energy consumption is likely to be one of the defining issues of India’s economy in the 21st century, particularly the way in which the nation simultaneously addresses climate change and access to energy.

This is the fifth article in our series on the past, present and future of coal. Look out for others in the coming days.

Authors: Tapan Sarker, Senior Lecturer, Department of International Business & Asian Studies, Griffith Asia Institute, Griffith University

Read more http://theconversation.com/india-is-hedging-its-bets-on-coal-to-bring-power-to-the-people-54657

Business News

How Fulfilment Services in Australia Help Businesses Scale Efficiently

The growth of e-commerce and modern retail has transformed customer expectations. Consumers now expect fast shipping, accurate order processing, and seamless delivery experiences regardless of where...

Daily Bulletin - avatar Daily Bulletin

Practical Ways Australian Workplaces Can Reduce Operating Costs

Reducing business costs doesn’t always mean cutting staff, shrinking services or making the workplace feel bare-bones. In many cases, the smarter savings are hiding in everyday operations: the light...

Daily Bulletin - avatar Daily Bulletin

Executive Recruitment Solutions That Help Organisations Secure Exceptional Leaders

Leadership has a direct impact on organisational performance, employee engagement, strategic growth, and long-term success. Businesses operating in increasingly competitive environments require experi...

Daily Bulletin - avatar Daily Bulletin

Why A WooCommerce Website Designer Matters For Online Growth

Running an online store today requires more than simply listing products and waiting for customers to arrive. Businesses need a website that is fast, reliable, easy to navigate, and designed to suppor...

Daily Bulletin - avatar Daily Bulletin

Turning Your Empty Tables into Revenue

The rise of AI demand tools in hospitality, the EatClub–CommBank partnership, and seven trends reshaping Australian dining  A growing number of Australian venues are turning to AI-powered demand ma...

Daily Bulletin - avatar Daily Bulletin

High-Impact Dental Marketing Strategies That Are Driving Real Practice Growth Today

The landscape of dental practice growth in Australia has shifted dramatically over recent years. Standard, broad-spectrum advertising campaigns no longer yield the return on investment they once did. ...

Daily Bulletin - avatar Daily Bulletin

How Telematics Helps Australian Companies Improve Productivity

Operating a commercial fleet in Australia is a uniquely demanding endeavour. Between the sprawling urban sprawl of cities like Sydney and Melbourne and the immense, unforgiving stretches of the Outb...

Daily Bulletin - avatar Daily Bulletin

Inside the Icon: The BridgeMuseum Officially Opens at the Sydney Harbour Bridge

A bold new way to experience one of Australia’s most recognisable landmarks has arrived, with BridgeClimb Sydney officially opening the all-new BridgeMuseum.  Located inside the Sydney Harbour Bridge...

Daily Bulletin - avatar Daily Bulletin

Is Your Brand Showing Up in AI Search? Most Melbourne Brands Aren't.

The New Front Door Nobody Told You About Something changed. Quietly. Without a press release. The way buyers find businesses in Australia has been rewired. Not replaced, rewired. Google isn't dead...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Traffic Light System Solutions For Safer And More Efficient Traffic Management

Modern cities and growing communities rely heavily on effective traffic management to ensure safety...

Gold Migration Lawyers in Liquidation: How the Closure Affects Your ART Appeal

If your appeal was with Gold Migration Lawyers, a recent change to how the Tribunal decides cases ...

The pressure cooker: life in urban Australia in 2026

Australian cities have always been demanding. Long commutes, rising housing costs, busy schedules a...

What Actually Makes a Good Criminal Lawyer in Melbourne

Most people only think about this question once. That is usually too late. Most people charged wi...

Why Working With A Chatswood Tutor Can Improve Academic Performance

Academic expectations continue increasing for students across primary school, high school, and senio...

Is It Worth Getting Solar Panels in Melbourne?

The real question is not whether solar works in Melbourne. It works. The question is what it is co...

How A Diploma Of Project Management Builds Practical Skills For Modern Work Environments

Developing the ability to plan, execute, and deliver outcomes efficiently is a key requirement in to...

How to Choose the Right Football for Every Level

Choosing a football may seem straightforward, but the right option depends on who will be using it a...

What to Ask a Wedding Photographer Before You Book

Booking a wedding photographer can feel deceptively simple: you like the photos, you like the vibe...