Coal to remain cost-effective for India's energy needs: WCA

New Delhi: Coal is expected to remain the most cost effective option for meeting India's growing energy needs, World Coal Association (WCA) has said.

"Even incorporating cost declines in renewable technologies, coal is expected to remain the most cost- effective option for meeting electricity demand growth in India," said the flagship report of WCA on "The Case for Coal: India's Energy Trilemma", released today.

The report said that while the government has suggested that the 13th five-year plan will call for the development of 100 percent supercritical coal plants, cost difference could impact developers' choices.

"There is as much as 40 percent price difference between the capital costs of an ultra-supercritical and a subcritical coal plant. Analysis show that if all coal plants built from 2020 onwards were ultra-supercritical, total capital expenditure would reach USD 500 billion by 2040, compared to around USD 387 billion if all coal plant built from 2020 onwards were subcritical," it said.

The report focuses on the challenges of meeting India?s growing energy needs, future energy demand, CO2 abatement costs and the role that can be played by high efficiency, low emission (HELE) coal technologies.

It said a USD 1 billion expenditure in ultra-supercritical coal in India could abate more CO2 than the same expenditure in European renewables.

Coal is expected to remain the most cost-effective way to abate CO2 in India, accounting for declines in the capital cost of renewables and increased gas availability, it added.

WCA chief executive Benjamin Sporton said: "India has 300 million people who don?t have access to electricity. As with many developing economies, India needs all sources of energy available to meet its growing energy needs using the best possible technology.

"With the International Energy Agency (IEA) predicting that coal will continue to make the largest contribution to electricity generation in India through to 2040 it is essential that we promote the best available technologies to ensure coal is used as cleanly as possible."

India is currently the world?s third largest energy consumer; this position will be consolidated over coming years driven by economic development, urbanisation, improved electricity access and an expanding manufacturing base, it said.

The International Energy Agency (IEA) has forecast that by 2040 India?s energy consumption will be more than OECD Europe combined, and rapidly approaching that of the United States.

WCA analysis shows that replacing subcritical capacity currently in the development pipeline with supercritical or ultra-supercritical technology would translate into significant reductions in CO2 emissions for India over the life of the power plants. 

Sporton said, "Our analysis shows that investing in super

and ultra-supercritical technologies in India remains a cost-effective carbon abatement alternative compared to investment in other generation technologies."

He added that from a global perspective, the research shows that investing in ultra-supercritical technologies in India may lead to higher CO2 abatement than investing in renewables in Europe.

Raising the average global efficiency of coal plants from 33 percent to 40 percent with off-the-shelf technology available today would save 2 giga tonnes of CO2 emissions.

This is the equivalent of running the Kyoto Protocol three times over.

"Expanding efficient coal consumption will help address India's energy trilemma of meeting demand, reducing energy poverty and actively participating in climate change commitments," Sporton said.

The World Coal Association is a global industry body of major international coal producers and stakeholders.