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There is no energy trajectory for India that does not utilize coal: Benjamin Sporton, World Coal Ass

Renewable energy generation may have grown at a rapid pace in India in the past few years but coal will continue to occupy a significant role in the country's energy mix for a long time to come, Benjamin Sporton, Chief Executive Officer (CEO) of World Coal Association told ETEnergyWorld in an interview. Edited excerpts.. What is your view of the coal sector and the larger energy sector in India? What, according to you, are the defining trends? A key trend is the growth of renewable energy technologies in India and a very significant growth in solar in particular. We have seen the cost of solar coming down quite a lot. There is a view, both internationally and in India, that because solar has become so cheap, India does not need coal any more. This is a gross misunderstanding. India’s power sector’s growth is around 7 per cent. And it needs to be sustained at a rate of over 4.5 per cent over the next 20 years. To meet this power growth, India needs not just growth in solar but quite a lot of growth in coal as well. So, it is not an either-or situation. Also, while solar cost has come down, it is not available on a 24X7 basis. Another view is that the cost of solar has come down so much that it may not be sustainable at this low level. Also, we need to remember that solar has grown in India not just because of lower prices but also because the government is promoting its “electrification for all” strategy. And solar is a very good way of doing this. The growth in solar is huge but it is happening from a very small base. India is also focusing on its “Make in India” campaign. The government is trying to ramp up the manufacturing base of the country. And that requires affordable, reliable, stable electricity supply. The only source of that in India at the moment is coal. So, as the middle class grows further and we try and develop better paying manufacturing jobs in India, a reliable baseload system of power supply becomes even more important. Given the importance of both coal and renewables for the energy basket, how should India frame its policy priorities? India is very much focused on meeting its climate objectives and getting a diverse energy supply. Because coal is going to be around in India for the foreseeable future, there is a need to look at clean coal technologies. We also observe a growing interest in India in carbon capture and utilization. On this subject, I think India can learn a lot from what is happening around the world. China has focused a lot on coal conversion. Similarly, there are opportunities to work with Japan as they have gone ahead on coal gasification. On Carbon Capture and Utilization, India needs to start the initial thinking now. India has also seen concerns around air quality recently. That concern has to be addressed. I think India needs to work with international partners to try and get the technologies required to address this challenge. The ministry of environment has done some work to ensure the environmental standards are met. The country needs strong implementation of these standards. India is going to use coal for a long time. There is no energy trajectory for India that does not utilize coal. So, coal will have a fairly significant role for a long time. You mean, a fairly significant but reducing role? Reducing in terms of its share but not reducing in absolute terms. A recent report said India will not require any new coal-based power capacities after a point. What is your view? I think that report is based on assumptions surrounding the cost of solar. But those assumptions may not be necessarily sustainable in the long term. I see both resources growing. Coal might not grow at the same pace as expected originally but I still see quite a strong growth trajectory. Setting up a coal plant and getting it into operation takes a lot of time. We need to make sure that we are using the right emission control technologies for these coal plants. The role of the coal cess should be to help the funding of these technologies and look for international support. Some of the coal plants in China are cleaner than gas plants in the US or the Europe in terms of the non-CO2 emissions. And the technology for China is not particularly costly. India has increased focus on distributed or off-grid energy where renewables or battery-based systems are a mainstay. Is that not a limitation of coal-based capacity? In far-flung areas where grid penetration is low, it makes sense to look at other alternatives. There, it makes sense to build solar capacities and mini grids. But it also depends on what the power needs are for that region. I do not think coal is the answer for every problem but it is part of the overall solution. Where the national grid is better connected and where there are manufacturing bases, coal plays a major role. The other thing is that India is not a particularly industrialized country and over the next decade and a half, around 300 million people are estimated to move to cities in India. And they are going to need reliable electricity and power. Investing in clean coal technologies. Where does India stand? It depends on how one defines clean coal technologies. I define it as beginning with high efficiency, low emissions power plants. In the Indian context, we are basically talking about supercritical and ultra-supercritical projects. In terms of domestic investments, India ranks highly. This is because India is making a shift away from older sub-critical technologies to modern high-efficiency, low emissions power plants. The current five-year plan period requires that these technologies are built in India and this is very positive. When it comes to more advanced technologies like CCS, India is still developing. Given this background, what has been the focus areas of activities for WCA? Our role internationally is to represent the coal industry. That is an advocacy job. We are trying to build relationships between international organisation and countries to help accelerate the deployment of cleaner coal technologies. We are trying to build networks between companies and countries and different organisations to say that here is a country like India that is going to be using coal, so how do we help India adopt clean coal technologies? We conducted a study some time back on how much support India might need in its transition to clean coal. And we saw the government using some of the material from that report at the climate change negotiations to define the potential of high efficiency coal. That helps India say to international partners that it needs more support on this. We are trying to get the policy settings in the international institutions right. So, the Asian Infrastructure Development Bank did a review of its new energy policy recently and we were involved in the consultations surrounding that to get a policy that supports a role for coal. So, that means that India can access cheaper financing through that. High efficiency coal is more expensive from a capital perspective. The running cost of sub-critical is actually quite high as it needs more coal. However, a more efficient plant needs less coal. So, on a lifetime basis, a high efficiency plant will cost less than a sub-critical plant. But if you make the cost of capital higher, because it is a capital intensive project, it tips the balance back in favor of the sub-critical project. So, we are trying to ensure the cost of capital is low. So, ours is an advocacy role but also includes network development. What is the kind of work WCA is doing with companies in India? We have done knowledge-sharing work in the past, getting companies internationally to talk about low emission technologies and the ways to deploy them. One thing that we would like to do is get involved with Coal India. The government has set stiff targets for Coal India’s production. They are struggling to achieve some of those targets at the moment. We are a global network of the world’s leading coal companies who are operating in a very efficient and environmentally effective way. And we think we have a lot of knowledge to share with an organisation like Coal India about how we can improve its operational efficiency and effectiveness and improve upon their sustainable mining practices using the best technologies available. We would like them to be a member of the WCA.

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