Energy Agency Warns of Uncertainty for Coal Sector Amid India’s Power Crisis

As India tries to increase its coal stocks in coal-fired power plants, in the face of a potential energy crisis, a new report by the International Energy Agency (IEA) titled, ‘World Energy Outlook 2021’ has warned that there are major uncertainties for the coal sector.

The report reads, “The coal industry, led by state-owned Coal India Limited (CIL), is charged with raising output. But ambitious volumetric targets have run up against major uncertainties about the demand trajectory as well as challenges associated with the low quality of large portions of domestic coal production.”

In order to limit global warming to 1.5 degrees Celsius over average temperatures about 150 years ago, the report implores nations to decarbonise the energy sector saying, “Accelerating the decarbonisation of the electricity mix is the single most important lever available to policy makers”, as “it closes more than one-third of the emissions gap between the APS (Announced Pledges Scenario) and NZE (Net Zero Emissions by 2050 Scenario)".

The report comes at a time when India has seen a major push to increase its coal output, while it simultaneously banks on renewables to meet the increasing power demand of the country.

The IEA includes 30 developed nations as member countries and eight association countries including India, China and Brazil.

Some of the key highlights include:

• In India over 50 GW of financially stressed coal assets (NPAs) has created strains in the banking system.

The report calculates that India's GDP will be growing faster than China on average over the next three decades starting now.

For 2020-30, India’s compound average annual growth rate will be 7.1 percent compared to China’s 5.2 percent. For 2030-40, India’s 4.4 percent to China’s 2.9 percent and for 2040-50, 5.3 percent to China's 3.6 percent.

• It further highlighted that today, 90 percent of the world’s population breathes polluted air, leading to over 5 million premature deaths a year.

• The report assumes that India will become the most populous nation within this decade surpassing China's population.

• Moreover, it is projected that by 2050 India will cross 1.6 billion in population where as China's population is projected to decrease, NDTV reported.

• Meanwhile, Coal demand in India is expected to increase by around 30 percent by the end of this decade.

• The report also stated that 1.67 million pre-mature deaths in India were linked to air pollution, which is more than three deaths every minute.

As per the APS, India is projected to be the second largest user of unabated coal, after China, responsible for about 15 percent of global use for electricity generation in 2030.

The report also calls for India to set a default temperature of 24 degrees Celsius for all room air conditioners and tighter minimum performance standards in order to improve efficiencies as the demand for cooling and power increases.

The report was released ahead of schedule to serve as a guideline for the global climate conference, next month, at Glasgow, UK.

(With inputs from NDTV)