Coal's future lies in Asia

There is no doubt that coal, along with oil, has been the bedrock for the industrial success of the 19th and 20th centuries.  Amid the current century's growing concerns for climate change, many world leaders have hopped on an anti-coal bandwagon and are increasingly insisting on a transition to renewables.

The big question is, will coal, a life-saving energy source, survive the onslaught of an anti-fossil brigade?  The answer is a resounding yes.  Big coal-consumers, especially in Asia, are beginning to soundproof their coal sector from renewable noises.

It is well understood that India and China together constitute the biggest coal-consuming bloc and are also the world's biggest greenhouse gas–emitters.  As part of the Paris climate pact, both India and China were expected to progressively reduce their dependency on coal.  Recent investments and energy strategies laid out in these countries portray a different picture.

India, for example, explicitly stated this year that coal will play a significant role in its ambition to become a $5-trillion economy.  That is according to India's home minister, a powerful figure in the government's decision-making process.  To realize this vision, India has acted to increase production, improve coal technology, and modernize its coal plants.

More than 70 percent of all electricity consumed by India's 1.3 billion people comes from coal.  The state-run Coal India said it is increasing supply this year to meet unprecedented demand for coal in the power sector.  Despite an increase in coal production and supply to power plants, "[o]n August 28, there was a massive power supply shortage of 77.7 million units (MU), compared to the shortage of 2.3 MU recorded on the same day in 2020 and a paucity of 18.9 MU shortage recorded on the corresponding day in 2019. As of last week, a majority of the country's 135 coal plants had just a week's supply of coal.

"All efforts are being made in cooperation with railway authorities to enhance dispatch to meet the unprecedented growth in demand for coal-based power," the coal ministry said.  This demand for coal is forecasted to grow consistently for the next few decades as India's energy needs will be among the highest in the world.

The country knows that it needs not only a steady supply of coal, but also a higher number of coal plants to generate reliable and affordable electricity.  Reuters noted that India is planning to build new coal plants, as they are still the cheapest electricity source capable of producing electricity in high-demand situations.  One such new plant is Vedanta's 1.98-Gigawatt coal plant in India's Punjab, which is expected to be operational in 2021.

India's coal plant–operators have insisted that India's domestic coal production must be complemented by importing high-quality coal.  In addition, the country's massive steel industry requires high-grade coal from abroad.  These demands suggest that India's purchases of Australian and Russian coal will increase in the future to make India a major driving force behind international coal demand.

India's plans for new coal-fired plants are still minuscule in comparison to neighboring China.  During the first half of this year alone, China approved the construction of 43 new coal-fired power plants.

Time Magazine said, "China is leading the world in new coal power plants, building more than three times as much new coal power capacity as all other countries in the world combined in 2020."  The Guardian reported, "Five Asian countries account for 80% of new coal power investment ... China, India, Indonesia, Japan, and Vietnam plan to build more than 600 coal power units."

So statements that "coal is no longer the king" and "coal is dead" are nonsensical.  Other than nuclear power and natural gas, coal is the only reliable and affordable source of electricity.  Rather than contemplating coal's demise, Asian giants are ramping up coal production and imports and adopting strategic plans to modernize and enlarge their coal-plant fleets.

Vijay Jayaraj is a research associate with the CO2 Coalition, Arlington, Va., and holds a master’s degree in environmental sciences from the University of East Anglia, England.  He resides in Bengaluru, India.

Image: Coal burning plant in China.  YouTube screen grab.

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