Clean coal, not solar, is the silver bullet for India’s carbon emission reduction
The power sector across the globe is going through a transition to reduce its carbon footprint. Environmentalists have targeted coal as one of the chief villains of global warming. It is true that coal is the dirtiest fuel with the highest carbon emission coefficient, but it presently plays a vital role in electricity generation worldwide. Coal-fired power plants currently produce 41% of global electricity and are responsible for 46% of the world’s carbon emissions.
India is the third largest carbon emitter in the world after US and China. The government of India has an ambitious plan to add 175 GW of power from renewable energy sources out of which 100 GW is expected to come from solar by 2022.
However, a new possibility emerges when one considers the fact that Indian coal-fired power plants are some of the most inefficient and polluting ones in the world. This is because around 80% of these plants are still using obsolete subcritical technology. Experts and policy-makers have suggested that the environmental harm caused by burning coal can be minimised by adopting high efficiency low emission (HELE) technologies such as supercritical and ultra-supercritical combustion technologies.
To address this issue in a scientific manner, we have attempted to calculate the “CO2 avoidance cost” (CAC) of ultra-supercritical and solar photovoltaic (SPV) power plants. The cost of CO2 avoided reflects the cost of reducing CO2 emissions while producing the same amount of power from a reference plant. The cost of CO2 avoided is expressed as Rs/tonne of CO2 not emitted (avoided) with respect to the reference process.
Analysis shows that it costs Rs. 875 to reduce a tonne of CO2 emission when power is generated by ultra-supercritical power plants instead of subcritical plants while it costs Rs. 2,624 to reduce a tonne of CO2 emission when power is generated by SPV plants instead of subcritical plants. Thus, an ultra supercritical power plant has a CO2 avoidance cost which is almost Rs. 1,748 per tonne of CO2 cheaper than an SPV plant. The divergence would have been even greater had we incorporated the mammoth hidden costs for SPV of land acquisition, keeping coal-based power plants idle during sunny days, construction of green corridors for evacuation of solar power, grid instability and e-waste disposal.
According to the data released by the Central Electricity Authority (CEA), in the year 2014 – 2015, total CO2 emission by power plants was 805.4 million tones and it is increasing by approx 7% on year to year basis. To reduce CO2 emissions substantially, 50% of existing subcritical plants can be replaced by highly efficient ultra- supercritical plants. By doing this, the government can save up to Rs. 25,000 crores as compared to the equivalent reduction of CO2 emission by SPV power plants.
This calculation also supports the views of Arvind Subramanian, Chief Economic Adviser to the government, who has categorically asserted that the social cost of renewables is far greater than that of thermal power for India – he has even called for a global alliance to promote clean coal. Minister Piyush Goyal at the FICCI summit on climate change also agreed that it makes more sense to invest in supercritical and ultra-supercritical technology and replace old coal-based subcritical thermal plants in India’s pursuit of its Paris commitments on climate change.
Further, India’s solar programme is heavily dependent on imports. In 2015-16, India imported $2.34 billion worth of solar cells, out of which 83.61% were from China. India also lacks a robust manufacturing base for solar cells and associated components. Moreover, India does not have any infrastructure for raw material production and the bulk of the SPV industry is dependent on the import of critical raw materials. Domestic solar cells are 10-15% costlier than their Chinese counterparts as solar manufacturers in China enjoy cheap capital, subsidised power, land and other export incentives to keep prices artificially low.
Due to the price differentials, Indian solar manufacturers have less than 10% market share and are struggling to survive. It is important to note that increased reliance on thin film solar technologies has augmented the dependence on specific metals mined in only a few geographic locations. Since China controls approximately 97% of the world’s ‘rare earth’ market, it has market power to manipulate the price of thin film solar cells. Solar power, apart from failing to provide the least cost option for carbon emission reduction, also enhances import dependence and, thereby, jeopardises India’s energy security.
We suggest that coal-based ultra-supercritical technology and not SPV is the preferable option to reduce carbon emissions. The government needs to review its capacity addition target based on large scale solar plants; and emphasis should be given to roof-top solar power and decentralised applications of renewable energy resources, which can complement coal-based power generation.
Vrishab Prakash is pursuing an executive MBA at the Management Development Institute (MDI)
Sajal Ghosh is associate professor at MDI
The views expressed are personal