/prod-the-processor/media/agency_attachments/EB8E9EAMaN2KqoFW4QbL.png)
/prod-the-processor/media/media_files/1WsEpOTfwMPJ84LghHsj.jpeg)
India's decision to stop building new coal-fired power plants, except those already in the pipeline, is a major step towards fighting climate change. While coal is expected to remain the dominant fuel in generating electricity in India for decades, this policy shift could help reduce the share of the polluting fuel in overall power output.
Despite the resource’s vast polluting potential, coal remains the most dominant source of energy globally, responsible for 37% of global energy generation in 2019. India has also undertaken an initiative to produce 1.2 billion tonnes of coal by 2023-24. Coal is observed to be the single biggest contributor to anthropogenic climate change, with coal-based electricity being responsible for nearly 30% of global greenhouse gas (GHG) emissions.
India plans to stop building new coal-fired power plants, except for those already in the pipeline, by removing a key clause from the final draft of its National Electricity Policy (NEP). This move is a major boost to the fight against climate change.
The draft, which needs approval from the central cabinet chaired by Prime Minister Narendra Modi, would make China the only major economy open to fresh requests to add significant new coal-fired capacity.
India and China account for about 80% of all active coal projects, as most developing nations wind down capacity to meet climate targets. According to E3G, an independent climate think tank, as of January 2023, only 20 countries have more than one coal project planned. The new policy, if approved, would not impact the 28.2 GW of coal-based power in various stages of construction, the sources told Reuters.
Dominant source of energy
Coal is expected to be the dominant fuel in generating electricity in India for decades, but activists have pressed for a halt to new coal-fired plants, arguing this would at least help to reduce the share of the polluting fuel in overall power output. The draft, India's first attempt at revising its electricity policy enacted in 2005, also proposes delaying the retirement of old coal-fired plants until energy storage for renewable power becomes financially viable, the sources said.
In the first draft of the NEP in 2021, India had said it may add new coal-fired capacity, though it proposed tighter technology standards to reduce pollution. However, the final draft, which will guide India's policymaking on energy over the next decade, features no references to new coal-fired power, as reported by Reuters.
China's National Development and Reform Commission said in a March 2022 document that outlined its energy policy that the world's largest coal user "will rationally build advanced coal-fired power plants based on development needs." China plans to build some 100 new coal-fired power plants to back up wind and solar capacity, which analysts said goes against Beijing's stated intention to reduce the role of coal.
The policy revision could also impact long-term coal prices and miners in Indonesia, Australia, and South Africa, as India is the world's second-largest coal importer.