Economic Boom Crushes Green Hope India still needs coal-fired power generation

The Dutigolin power plant, built on a salt flat in southern India, exemplifies the dilemma facing the world's fastest-growing major economy: how to provide reliable energy for 1.4 billion people.

First, the 1,050-megawatt coal-fired power plant, one of the largest in the region, was supposed to shut down. The plant, which was commissioned 40 years ago, was too narrow to be retrofitted to meet the Indian government's pollution standards, prompting the Ministry of Electricity to plan to shut down the plant by 2022. However, the plant is still operating at full capacity, reaching 90 percent power utilization in February this year. Aging boilers consume a lot of coal from coal mines nearly 2,000 kilometres away – a distance that only adds to India's carbon footprint.

India's electricity consumption is growing at the fastest rate among major economies, as rising temperatures and rising incomes drive sales of energy-intensive household appliances such as air conditioners. This extremely unbalanced situation fully exposes the precarious power grid. Despite promises by Prime Minister Narendra Modi to rapidly develop solar and wind power to replace polluting fossil fuels, the Indian government has been unable to meet the demand and has revitalized old and inefficient coal-fired power plants like Dutigorin.

In recent months, Modi has approved a new round of plans to build power stations, extending the life of many existing coal-fired power plants. The decision has divided India with global allies that refuse to use coal as a fuel, citing climate reasons, threatening Modi's ambitions to curb air pollution and reduce the world's third-largest share of greenhouse gas emissions.

These dynamics will also give India a key role in determining the pace of global coal phase-off. Demand in China, now the largest coal consumer, may have peaked last year, and future growth will increasingly be driven by India and emerging economies in Southeast Asia, according to the International Energy Agency.

"The message is very clear to both international and domestic audiences: we all support climate action, but India will prioritize domestic interests," said Ashwini K. Swain, a researcher at the Sustainable Futures Collaborative, a climate think tank in New Delhi. Neither India's power ministry nor Tamil Nadu Generation and Distribution, which operates the Dutigorin coal-fired power plant, responded to requests for comment.

India still has a long way to go to ensure a reliable and affordable supply of electricity. In October 2021, as India's economy began to recover from the pandemic, it was hit by a massive coal and power crisis. Years of weak demand have led to sluggish growth in India's mining, transportation and power generation capacity.

Soon after the situation improved, officials realized that the crisis was not temporary. In the summer of 2022, India's energy demand hit a record high, causing the worst power supply shortage in eight years. In 2023, Maharashtra, one of India's most industrialized states, home to financial hub Mumbai, still faced a staggering 10% peak power deficit in August, despite easing the nationwide energy shortage.

While the energy shortage has led to expectations that India will accelerate its transition to green energy, India's response has been the opposite. Officials have pushed for more mining activity, abandoned plans to phase out aging power plants, raised targets for new coal-fired power plants, and successfully lobbied for international forums to pass resolutions that do not impede the use of fossil fuels.

"As a country, we should play to our strengths, and coal is where our strengths lie," said Prakash Tiwari, the former chief operating officer of the state-owned National Thermal Power Corporation (NTPC), India's largest power producer. For fiscal, political and security reasons, alternative energy solutions are not yet widespread.

More than 35 miles (56.3 kilometers) from Dutigorin, a dusty road leads to two solar farms, surrounded by sprawling wind farms. Ayana Renewable Power, which operates one of the solar power plants, sees a future of renewable energy and serves industrial users through energy storage. This trend is gaining momentum in India, but it is far from being a source of large-scale electricity supply. According to calculations based on data from India's Ministry of Electricity, solar power will account for 6% of India's total electricity generation in 2023.

M. Prasanna Kumar, chairman of India's state-owned power company National Thermal Power Corporation, which operates another solar plant, said the company is spending more than twice as much on expanding mining, coal and lignite power generation capacity as it does for renewable energy builds.

Natural gas is touted by producers as a less polluting alternative to coal, but it is also struggling to compete. India has nearly 25 GW of gas-fired power generation capacity that has been idle for years as other cheap sources of electricity, including coal, have replaced natural gas. India does not have enough domestically produced subsidized fuel to execute these power plants, and in the highly price-competitive Indian power market, it is often prohibitively expensive to use imported LNG to operate these assets.

The construction of hydroelectric dams is also fraught with difficulties. Most of India's promising hydropower plants are located in the Himalayan region, where frequent extreme weather events, such as flash floods, can jeopardize hydropower projects. These risks have sparked local opposition to the construction of large dams, delaying hydropower plant construction plans for several years and increasing costs, making many construction projects unaffordable.

Nuclear power generation has experienced a resurgence in many parts of the world due to its low-emission energy sources. But in India, the development of the nuclear industry has been too slow to make progress, and safety concerns remain. India's Nuclear Damage Liability Act imposes liability on operators and suppliers for accidents. Many Indians are still haunted by the 1984 Bhopal gas spill, which killed thousands of people exposed to toxic chemicals.

Take, for example, the Kudankulam nuclear power plant, about 90 miles (144.8 kilometers) south of Dutigorin. The plant has two reactors with an installed capacity of 1 GW each, and four more reactors are currently under construction. In the nearby village of Idin Takara, Mildred, now 52, has been at the forefront of protests against the construction of the nuclear power plant. She has travelled all over India to discuss the risks of nuclear energy.

"Why can't these be our main source of energy?" the activist asked on a recent day, pointing to several rotating wind turbines near her home.

In 2008, India reached an agreement with the United States to share civilian nuclear technology and nuclear fuel, clearing the way for new projects to be built. India has also signed agreements with foreign reactor suppliers, including General Electric-Hitachi, Westinghouse Electric and Areva SA, which later transferred the project to its state-owned counterpart, Electricite de France SA. GE-Hitachi later withdrew on the grounds of nuclear damage liability law.

In the western state of Maharashtra, India had planned to build the world's largest nuclear power plant, with an installed capacity of 9.6 gigawatts, near the vast Alfonso mango orchard.

But when Kiran Dixit, then executive director of the state-owned monopoly Nuclear Power Corp. of India, visited the area, locals refused to sell their land.

They argue that land prices are too low and fear that the plan will harm fishermen's livelihoods and mango trees. Dixit said the Indian nuclear power company tried to calm those concerns and eventually acquired the land. Despite this, no significant progress has been made on the Jalapur nuclear power plant project as the parties continue to discuss the terms of the deal.