India’s Just Energy Transition and Coal Dependence

GS3 – Environment 

Context:

India faces a dual challenge: balancing energy security and climate commitments under the Paris Agreement. This necessitates a gradual but firm shift from coal to renewables, ensuring a just transition for affected communities and sectors.

India’s Coal Consumption & Energy Mix

• Coal Dependency:
  • Contributes ~55% of total primary energy.
  • ~70% of coal is used for thermal power.
  • Other sectors: Steel (8%), Cement (5%).
• Production & Imports:
  • 2nd largest coal producer globally.
  • 3rd largest coal importer.
• Installed Power Capacity (as of 2024):
  • Total: ~402 GW
  • Coal-based: 205 GW (51%)
  • Solar: 72 GW
  • Wind: 44 GW

Issues with High Coal Dependence

Issue	Details
Supply Disruptions	Post-COVID, halted mining caused major power shortages.
Environmental Damage	Coal burning = Air pollution, water stress, habitat loss.
Health Impact	>800,000 premature deaths globally (WHO). India alone ~670,000/year.
Economic Losses	High transmission losses, inefficient old plants, costly imports.

 

Benefits of a Just Energy Transition

Benefit Area	Key Outcomes
Climate Action	Helps meet India’s NDC targets: 40% non-fossil capacity by 2030.
Cost Reduction	Renewables have zero fuel cost and lower O&M costs.
Health Improvements	Reduces disease burden from air pollution.
Energy Security	Strengthens domestic value chains (solar modules, turbines, batteries).

 

NDCs (Nationally Determined Contributions): India’s voluntary, non-binding commitment under the Paris Agreement to reduce emissions and build resilience.

Challenges in Phasing Out Coal

• Regional Dependence:
  • Jharkhand, Odisha, and Chhattisgarh hold ~68% of India’s coal reserves.
  • Risk of economic collapse without alternate livelihoods.
• Job Loss Risk:
  • ~3.7 lakh coal workers in PSUs may be displaced.
• Technical Barriers:
  • Intermittency of renewables, lack of smart grids or battery storage.
• Regulatory Delays:
  • Slow land acquisition, environmental clearance bottlenecks.
• Stranded Assets:
  • ₹1 lakh crore+ worth of coal power plants risk becoming NPAs due to underutilisation.

Economic Costs of Transition

Issue	Details
Revenue Losses	Coal sector provides ~₹70,000 crore/year to Centre & states (royalties, GST).
Railways Impact	~40% of Indian Railways’ freight revenue is coal-dependent.
Localised Shocks	Coal districts risk social unrest and loss of public services without support.

 

Government Initiatives Supporting Just Transition

1. National Solar Mission (NSM):
   • Target: 280 GW by 2030 (earlier 100 GW by 2022).
   • Flagship under NAPCC, boosts solar adoption.
2. PM-KUSUM Scheme:
   • Supports solar pumps for farmers.
   • Reduces diesel reliance; enables selling surplus to grid.
3. Green Energy Corridor:
   • Dedicated transmission networks for renewables.
   • Links generation zones to consumption centres.
4. Solar Parks Scheme:
   • Pre-cleared land and infrastructure for solar developers.

Targets 50 large parks with private sector involvement.