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Aastha Group : India seeks allies to tap cheap funds for clean coal

Posted by Neeraj Sharma
October 28, 2017

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In an attempt to tap cheaper funds for cleaner coal technologies, India is likely to enter into alliance with other countries. As per the World Coal Association chief, the country is expected to use the fuel to produce over half of its power in the upcoming two decades.

Mohit Aggarwal, the Chief Managing Director of Aastha Minmet India Pvt Ltd states, “In spite of being the second-largest importer of coal in the world, India still relies 78 percent on the fuel for electricity generation.” According to NITI Aayog, a 48-54 percent reduction in the country’s overall energy mix, from around 55 percent in 2015 is expected by 2040.

“India will need to ally with countries, including the United States, Japan, and Australia, to get cheaper funding from multilateral development banks. This will help India get access to cleaner technology and catch up with Japan and China,” said Benjamin Sporton, chief executive of the World Coal Association.

Arvind Subramanian, chief economic adviser of India, recently supported the cause of a “green coal coalition”.

Sporton believes that India will majorly depend on imported coal in the upcoming years to facilitate its economic expansion.

“For many power plants designed to take imported coal, it will be very difficult to shift those over to domestic coal supply.The other reason is India’s coal tends to be of slightly lower quality than what is available in the international market,” he said.

Aastha Group emphasizes that various guidelines for promoting the use of fossil fuels cleanly and efficiently through funding from multilateral development banks were issued by the US Treasury.

In 2013, the Obama administration said the United States would oppose most coal projects, a guidance altered by the Trump administration.

According to Sporton, India will need to be on board with a global partnership to develop its domestic coal expertise.

“India has huge challenges when it comes to energy,” he said, adding that the government should look at using funds from the National Clean Energy Fund, which has over $4 billion accumulated through the levy of a surcharge on coal.

“Coal has a critical role in India today, no matter how much money is pumped into renewables,” Sporton said.

Mohit Aggarwal of Aastha Group highlights that India is looking forward to raise the share of renewable power in its energy mix.Prime Minister Narendra Modi’s government is striving to raise solar power generation capacity nearly 30 times to 100 Gigawatts (GW) by 2022.

As a matter of fact, the capacity has already increased three times in three years to more than 12 GW. However, Sporton predicts an increase in the demand of coal in India, despite companies offering very low tariffs for solar power.

“Global output for coal is also expected to rise in 2017, led by U.S. and China”, he said Sporton further stated that he did not expect India’s low solar tariffs to be sustained.

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