New Coal Does Not Make Economic Sense for India, Says Study

The report ‘No New Coal By 2021: The Collapse of the Global Pipeline’, released by independent climate change think tank E3G, analyses that there has been a 76% reduction in proposed coal power since the Paris Agreement was signed in 2015. It further highlights that though India is moving slowly away from coal at a national level, considerable progress is being made at the state level. The climate groups behind the report are E3G, Global Energy Monitor and Ember.

Significant socio-economic headwinds to new coal in India have led to State level commitments to no new coal, opening a pathway for national progress. India is moving slowly away from coal at a national level, however considerable progress is being made at the state level. Between 2019 and 2021, public officials from four Indian states (Gujarat, Chhattisgarh, Maharashtra, and Karnataka) announced their intention to not build new coal power plants. According to a 2019 study, many more states have the potential to move away from new coal power due to a combination of socio-economic and environmental factors, particularly the rapidly increasing cost competitiveness of new renewables.

India’s pre-construction pipeline of 21GW is the second largest in the world. India is currently constructing 34GW of new coal capacity. This is on top of India’s considerable existing operating fleet of 233GW (11.3% of the global total).

Yet since 2015, India has seen over 326GW of projects cancelled, a 92% decrease in the pipeline. This includes more than 250GW of capacity that had previously been shelved. This means that almost 7GW have been scrapped for every 1GW that has gone into operation. Conditions are now ripe for India’s remaining pipeline to not continue into construction. The cost implications of building new coal are starker in India than in many other countries, with clear evidence that even a country with large domestic coal reserves can struggle to make coal-fired power economically viable.

New coal does not make economic sense for India anymore, as renewable energy can deliver these outcomes better, quicker and cheaper, and without the negative socio-economic, health, and environmental impacts of coal, reveals a new report assessing the global pipeline of new coal projects.