The Role of Coal in a Sustainable Energy Mix for India: A Wide-Angle View

Mohanty, Mritiunjoy (Ed.); Sarkar, Runa (Ed.) Book The Role of Coal in a Sustainable Energy Mix for India: A Wide-Angle View Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Mohanty, Mritiunjoy (Ed.); Sarkar, Runa (Ed.) (2024) : The Role of Coal in a Sustainable Energy Mix for India: A Wide-Angle View, ISBN 978-1-000-98956-4, Routledge, London, https://doi.org/10.4324/9781003433088 This Version is available at: https://hdl.handle.net/10419/290612 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ As India switches away from a coal-based to a more sustainable energy use pattern, which pathway will it adopt? What is the nature of challenges that it will face, and who will be affected? Who will gain? This volume offers insights into the steps and challenges involved in this transition and addresses some urgent questions about the possible pathways for India’s renewable energy generation. Including contributions from researchers, policymakers, and practitioners, it draws on different disciplines, ranging from science and technology to economics and sociology, and situates the issue of low carbon transition within an interdisciplinary framework. India has committed to gradual decarbonisation of its economy. This book takes this as its starting point and uses a wide-angle lens, incorporating macro as well as micro views, to understand the possible next steps as well as trade-offs that will inevitably be posed. It incorporates the perspectives of all stakeholders ranging from central and state governments, public and private sector firms, on the one hand, to individuals and local communities, on the other, to explore their role in the transition, their interests, and how these will change and evolve. This timely volume will be of interest to students and researchers of environmental studies, development studies, environmental economics, political studies, and Asian studies. It will also be useful to academics, practitioners, and policymakers working on issues related to climate change, sustainable development, energy policy and economics, and public policy. Mritiunjoy Mohanty is Professor with the Economics Group of the Indian Institute of Management Calcutta (IIM Calcutta), India. He is also currently a member of IIM Calcutta’s Centre for Development and Environment Policy. Runa Sarkar is Professor with the Economics Group of the Indian Institute of Management Calcutta (IIM Calcutta), India. She is also currently the Coordinator of IIM Calcutta’s Centre for Development and Environment Policy. The Role of Coal in a Sustainable EnergyMixfor India The Role of Coal in a Sustainable Energy Mix for India A Wide-Angle View Edited by Mritiunjoy Mohanty and Runa Sarkar Designed cover image: © Getty Images First published 2024 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2024 selection and editorial matter, Mritiunjoy Mohanty and Runa Sarkar; individual chapters, the contributors The right of Mritiunjoy Mohanty and Runa Sarkar to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. The Open Access version of this book, available at www .taylorfrancis .com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives (CC-BY-NC-ND) 4.0 license. Centre for Development and Environment Policy, Indian Institute of Management Calcutta, India Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-032-51646-2 (hbk) ISBN: 978-1-032-55961-2 (pbk) ISBN: 978-1-003-43308-8 (ebk) DOI: 10.4324/9781003433088 Typeset in Sabon by Deanta Global Publishing Services, Chennai List of Appendices and Boxes viii List of Figures x List of Tables xii Contributors xiv Preface and Acknowledgements xxi Abbreviations xxiv Introduction 1 MRITIUNJOY MOHANTY AND RUNA SARKAR PART 1 A Macroeconomic Analysis of Alternate Pathways 9 A Macroeconomic Analysis of Alternate Pathways: an Introduction MRITIUNJOY MOHANTY AND RUNA SARKAR 1 India’s Coal and Coal-Fired Electricity Needs by 2030: Clearing Vision beyond Black Coal andHazySkies 13 SUNIL DAHIYA, ADITYA LOLLA, PRIYANSHU GUPTA, ANDNANDIKESH SIVALINGAM 2 India’s Energy Trilemma and Coal-based Power Generation 28 SAMBIT BASU AND SOUMYA PRAKASH NAYAK 3 Energy Transition and Centre–State Priorities: Alignments and Misalignments of Policies and Decisions 43 TIRTHANKAR MANDAL 4 Macroeconomic Impacts of Coal Transition 54 SAON RAY, PIYALI MAJUMDER, AND VASUNDHARATHAKUR 5 The Social Aspects of India’s Energy Transition: Coal, Critical Minerals and Socio-Economic Dependencies 75 VIGYA SHARMA AND JULIA LOGINOVA Contents vi Contents 6 Deep Electrification in India: A Review of Strategies, Policies, and Sectoral Developments 104 SARTHAK SHUKLA, SHUBHAM THAKARE, AND RAGHAVPACHOURI PART 2 Governance and Policy Perspectives 117 Governance and Policy Perspectives: an Introduction MRITIUNJOY MOHANTY AND RUNA SARKAR 7 Governance Principles for a Just Energy Transition 119 SIMRAN GROVER, NAINI SWAMI, AND V. SURESH 8 Policy Framework for Energy Transition in India 135 SARTHAK SHUKLA AND RAGHAV PACHOURI 9 Industrial Policy 2.0: Policy Space and Decarbonisation 156 MRITIUNJOY MOHANTY, SAON RAY, AND NAINI SWANI 10 International Experiences on Just Energy Transition Planning and Lessons for India 168 MADHURA JOSHI AND SWATI DSOUZA 11 Grounded Perspectives on Energy Transition – The View of Panchayat Members on Energy Transition and Impact of Climate Change 186 JAHNAVI G. PAI, MUNNA JHA, AND VINUTA GOPAL PART 3 Industry: Opportunities and Challenges 199 Industry: Opportunities and Challenges – an Introduction MRITIUNJOY MOHANTY AND RUNA SARKAR 12 Retrofit Decarbonisation and Reutilisation of Thermal Power Plants 203 SUCHARITA BHATTACHARJEE AND TRINAYANI SEN 13 Future-Proofing India’s Coal PSUs: An Analysis of CIL and NTPC 216 SAARTHAK KHURANA, ARNAB SARKAR, AND BALASUBRAMANIAN VISWANATHAN 14 Evaluation of Energy and Environmental Efficiency of the Indian Thermal Power Plants: A State-Level Analysis 240 SABUJ KUMAR MANDAL 15 Energy Storage and Its Potential Role in Electricity Transition 251 SHUBHAM THAKARE AND RISHIKESH SREEHARI 16 International Experiences: The Cases of Iberdrola, Enel, andNextEraEnergy 264 SHUBH MAJUMDARR, ABHINAV JINDAL, SHANTANUSRIVASTAVA AND VIBHUTI GARG Contents vii PART 4 Investors and Shareholders 279 Investors and Shareholders: an Introduction MRITIUNJOY MOHANTY AND RUNA SARKAR 17 Financing India’s 2030 NDC Targets and Beyond 283 VAIBHAV PRATAP SINGH AND NEHA KUMAR 18 Transition Finance 299 AANANDITA SIKKA, NEHA KHANNA AND DHRUBAPURKAYASTHA 19 Role of Domestic Institutional Capital in Funding India’s Energy Transition 311 SHANTANU SRIVASTAVA 20 Operationalising Just Transition in India: Financing Challenge and Options 329 NEHA KUMAR AND SURANJALI TANDON 21 International Climate Financing and Just Energy Transition: Exploring the Synergies 343 PRADIP SWARNAKAR AND RAJSHRI SHUKLA Index 353 Sambit Basu is the Director (Programs) and Chief Energy Economist for Power Foundation of India. Sambit has more than 25 years of experience as an Energy Policy and Regulatory Economist. He has engaged with the public and private sectors, development banks and communities, in India and abroad, to undertake research and economic analysis on energy projects. Christopher Beaton is Lead, Sustainable Energy Consumption in IISD’s Energy programme. His research role spans various projects within IISD’s trade and climate change portfolio. He manages the India programme within IISD Energy. Chris has a master’s degree in International Relations from the John Hopkins School of Advanced International Studies. Sucharita Bhattacharjee is a development sector strategist with experience on a gamut of issues particularly focusing on Environment Sustainability, Infrastructure and Governance with “Community” as the prime stakeholder. She is currently working as a Policy Analyst and Deputy Head of CUTS International – Calcutta Resource Centre. Badri Chatterjee has over 10 years of experience working in various media houses. Prior to joining Asar as a Communications and Engagement Strategist, he was an environment journalist at Hindustan Times. Badri has pioneered work in creating a “Simplifying Climate Science” vertical in Asar that provides media access to Indian scientists and academics. Susmita Chatterjee has earned an M.A. in Development from Azim Premji University. She has experience working as a professional on gender issues and rural livelihoods at the Sustainable Livelihood Institute, Auroville. Her most recent research at the SwitchON Foundation focuses on distributed renewable energy and its integrationto improve rural livelihood prospects for underserved communities. Sunil Dahiya is Analyst with CREA, leading its work in South Asia. He has over 11 years of experience working for non-profits on diverse issues. His expertise is research, policy support, and coalition development on the issues of the energy transition, climate change, air pollution, and community rights, etc. Sayantan Dey is an avid researcher who graduated from the University of Delhi with a master’s in anthropology. His professional affiliation as a researcher is with the SwitchON Foundation, where he works to promote sustainability and renewability as means of preserving the environment. He aims to effectively amalgamate theoretical frameworks in practice and broaden his body of knowledge. Contributors Contributors xv Swati Dsouza is the India lead analyst for the International Energy Agency. Her research interests include Just Transitions, power and transport sector decarbonisation, and supply chain security. Prior to this, at Brookings India (now CSEP), she managed and co-edited the book The Next Stop: Natural Gas and India’s Journey to a Clean Energy Future, which puts together a roadmap to increase gas consumption in India. Vibhuti Garg is Director, South Asia, with the Institute for Energy Economics and Financial Analysis. Vibhuti’s focus is on promoting sustainable development through influencing policy intervention on energy pricing, adoption of new technologies, subsidy reforms, enhancing clean energy access, access to capital, and private participation in various areas of the energy sector. Arunava Ghoshal earned his engineering degree before completing his postgraduate (MSW) studies at IGNOU. After working with remote tribal communities of Jharkhand for PRADAN, Arunava worked as a researcher for PRADAN, EKJUT, JSLPS, OTELP, TSRDS, UNICEF, etc. He returned to the M&E field and worked for World Health Partners and ActionAid Association before his current association with SwitchON Foundation as a researcher in energy, water, agriculture, and sustainable cities. Vinuta Gopal is founder and Chief Executive Officer of Asar Social Impact Advisors Pvt Ltd. and a recipient of the Climate Breakthrough Award 2022. She has been working on environmental and social justice issues for more than two decades and leading several successful campaigns on climate change and social justice. Simran Grover is the founder and CEO of the Centre for Energy, Environment, and People (CEEP), an initiative for energy equity and climate justice. Simran has substantive experience in the domains of renewable energy, applied research, and entrepreneurship. He works to promote constitutional values and democratic practices in the domain of energy and climate governance. Manideep Gudela is Research Fellow at the Centre for Energy, Environment, and People (CEEP). He is a multidisciplinary researcher working primarily in energy policy, focusing on decarbonisation. His work includes tracking national and subnational developments in electricity tariffs, regulations, subsidies, and the performance of public utilities. Priyanshu Gupta is Assistant Professor in the Business Sustainability area at Indian Institute of Management Lucknow, India, where he teaches courses in the area of sustainability and social entrepreneurship. His research focus lies at the intersection of sustainability, public policy, mineral resource governance, and the theory of property rights and institutions. Vinay Jaju completed his post-graduation in business management from SPJIMR after graduating from St. Xavier’s College, Kolkata. A proponent of Climate Action, Vinay is the Managing Director of SwitchON Foundation, a team of over 100 professionals dedicated to Environment Sustainability and Equal Opportunities. Vinay leads the team on Clean Energy Access, Sustainable Agriculture, Skill-based Education, and Well-being. Munna Jha has 14 years of experience in media and communications in areas ranging from clean energy, energy access, air pollution, displacement, gender, and rights of indigenous people and marginalised communities. He holds a bachelor’s degree in xvi Contributors Political Science from Kolhan University and a diploma in Mass Communication and Journalism from Punjab Technical University, India. Abhinav Jindal holds a PhD in Economics from IIM Indore and works as a senior faculty with NTPC-Power Management Institute, Noida, India. He has nearly two decades of experience in the Indian power sector. His research is focused on issues at the interface of economics, sustainable finance, energy, and the environment. Madhura Joshi has over a decade’s experience working in energy and climate policy in India and the region. Her areas of expertise include energy governance and diplomacy, political economy of energy transitions, and co-benefits of low carbon development among others. Currently, Madhura is Senior Associate and India Energy Transition Lead with E3G, an international climate think tank. Neha Khanna is Manager at Climate Policy Initiative’s Delhi office. She is a climate expert specialising in risk management and financial inclusion. Her work focuses on green and sustainable finance, ESG, and responsible and inclusive finance. Prior to CPI, Neha worked at Intellecap, Accenture, and the management consulting arm of ICRA Ratings. Saarthak Khurana is Manager at CPI’s Delhi office, where his work focuses on technoeconomic solutions and policy mechanisms to drive decarbonisation. With a strong background and over a decade of experience in the energy sector, his expertise lies in energy transition, e-mobility, power market reforms, cross-border energy trade, and corporate strategy. Neha Kumar is currently the Head of South Asia Programme, at Climate Bonds Initiative. She has more than 14 years of experience working on public policy and industry action in India on sustainability and responsible financing. She was responsible for conceptualising and overseeing successful Indo-German public–private alliances, EU co-financing grants, and mainstreaming sustainability practices in large and small businesses. Julia Loginova is Research Fellow at the Centre for Social Responsibility in Mining (CSRM), Sustainable Minerals Institute, the University of Queensland, Australia. Julia is Human and Economic Geographer. Julia’s research focuses on global value chains, governance and socio-economic redistributions, and community participation and consultation in the context of coal phase-out and minerals mining. Aditya Lolla is Senior Policy Analyst with Ember, who leads its research and policy advocacy work in South Asia. His key focus areas include identifying viable pathways to clean electricity sectors in the region, redefining the role of fossil fuels in electricity transition and engendering regional cooperation on clean electricity transition. Shubh Majumdarr is currently pursuing a doctoral degree in General Management at the Indian Institute of Management in Ranchi, India. His research interest includes General Management, Strategy, and Energy Transition-related topics. His recent research has been published in Rutgers Business Review journal. Piyali Majumder is Associate Fellow at NCAER. She has worked at several teaching and research institutions, prominent ones being IIT Delhi, St Xavier’s University, Kolkata, and ICRIER. She completed her PhD and MPhil from Jawaharlal Nehru University. Contributors xvii Her areas of interest are International Trade, Environmental Economics, Industrial Organization, and Spatial Econometrics. Sabuj Kumar Mandal is Associate Professor of Economics at the Department of Humanities and Social Sciences, IIT Madras. His teaching and research interests include Energy and Environmental Economics, Adaptation to Climate Change, and Environmental Regulation and Firm Performance. He was awarded Fulbright Nehru Academic and Professional Excellence Award 2020–2021 for conducting research in the area of Community-Based Adaptation to Climate Change. Tirthankar Mandal has nearly 15 years of experience working at the interface of energy, development, and climate change. His interests lie in understanding the evolution of institutional relationships between different entities of federal governments and state governments as well as changing role of public finances in the context of climate change activism and the high renewable energy scenario. Mritiunjoy Mohanty is a member of the Economics faculty at the Indian Institute of Management Calcutta. Outside of universities and business schools in India, he has also taught and lectured in Mexico and Canada. His areas of research interest are growth and structural change, open economy macroeconomics, comparative growth experience, and the political economy of growth. His current area of research is the nature and pattern of India’s integration into the global economy in a comparative framework. Soumya Prakash Nayak is working currently at the Power Foundation of India, an autonomous Society under the Ministry of Power, Government of India. In his professional journey he has been an energy sector professional with over 10 years of experience in Research & Analysis, Organising Energy Dialogues & Stakeholder’s Consultation Meetings & Conducting Studies. Raghav Pachouri has over 11 years of experience in the Indian power sector. During the course of his career, he has worked for Reliance Power and The Energy and Resources Institute (TERI). The current focus of his work is energy and power sector modelling, especially aimed at renewable energy integration and decarbonisation of the Indian power sector. Jahnavi G. Pai has over 15 years of experience working with both government and nongovernment environmental organisations in India. Her research interests lie in the intersections of ecology, livelihoods, degrowth, and gender. She currently works with Asar Social Impact Advisors Pvt Ltd. as a research consultant. Dhruba Purkayastha is the India Director for Climate Policy Initiative (CPI) and the Director of US-India Clean Energy Finance (USICEF), for which CPI serves as the Program Manager. Dhruba comes with over 20 years of experience and his expertise lies in management consulting, investment banking, credit rating, and international development financing in Asian countries. Swasti Raizada is Policy Advisor at the International Institute for Sustainable Development (IISD). Her experience lies in policy advisory, public finance, and government affairs for energy. Prior to joining IISD, she was with Deloitte Consulting’s Energy and Resources practice where she led engagements on pre-feasibility studies for solar PV and battery storage, energy access, and tariff design. xviii Contributors Abhishek Raj is a finance professional turned policy researcher. His work revolves around developing solutions that minimise India’s dependence on fossil fuels and accelerate the transition towards a zero-carbon electricity system and analysing the current state and preparedness of Indian Financial Institutions towards climate risk and opportunities. Saon Ray is an economist specialising in industry and international trade issues, and her areas of interest include global value chains, technological upgrading of Indian industries, free trade agreements and trade creation effects, technology transfer, foreign direct investment financial inclusion, energy, and climate change–related issues. She has published widely on these issues in books and journals. Arnab Sarkar is an analyst at CPI’s Delhi office, where he focuses on energy transition and decarbonisation of the electricity system. His key responsibilities include establishing credible solutions and policies needed to address critical issues related to energy transition in India. He comes with four years of rich experience in the energy and power space. Runa Sarkar is Professor with the Economics Group, Coordinator of the Centre for Development and Environment Policy, and was Faculty Member on the Board at the Indian Institute of Management Calcutta. Her interests lie in sustainable development where business interests are in consonance with environmental and social interests. She is on the boards of Bandhan Financial Holdings Ltd and Basix Consulting and Technology Services Ltd. Runa is a member of the jury for the Steelie awards in sustainability by the World Steel Association and the CII Net Zero Council. Trinayani Sen is a development sector professional with a background in economics and public policy. Her professional experience spans the nexus of energy, environment, and livelihoods. She is currently a part of the Electric Mobility team at WRI India, where she is engaged as Senior Program Associate. Vigya Sharma is Senior Research Fellow at the Centre for Social Responsibility in Mining (CSRM), Sustainable Minerals Institute, the University of Queensland, Australia. In her current role, she is leading the Centre’s work on fossil fuel transitions, particularly looking at the social, political, and economic impacts of large-scale coal transitions in several geographies, including India, China, and Australia. Gireesh Shrimali is with the University of Oxford’s Smith School of Enterprise and the Environment (SSEE) where he is the Head of Transition Finance Research at the School’s Oxford Sustainable Finance Group. His research focus is on renewable energy finance and policy, on the catalytic role of finance in getting to net zero, and on pathways for the provision of low-cost, long-term capital for clean energy transition. He holds a PhD from Stanford University, an MS from the University of Minnesota, and a BTech from IIT Delhi. Rajshri Shukla is a PhD candidate in Sociology at the Department of Humanities and Social Sciences, Indian Institute of Technology Kanpur, India. For her doctoral thesis, she is working on the energy justice implications of large-scale renewables in India. Her research interests include climate and energy policy, energy justice, and Just Transition. Sarthak Shukla holds a postgraduate degree in Regulatory Governance from Tata Institute of Social Sciences, Mumbai. He has the experience of working in the areas of Contributors xix climate finance, energy transition, stakeholder engagement, and systems thinking. He is working as Policy Officer – Energy Transition, at Vasudha Foundation. Aanandita Sikka is Analyst at Climate Policy Initiative’s (CPI) Delhi office. Her work focuses on green and sustainable finance. Her expertise lies in urban sustainability, public policy, and regulation. Prior to CPI, she worked at Athena Infonomics in the water and sanitation sector in South Asia and Africa. Vaibhav Pratap Singh is a climate finance professional working on designing and developing financial instruments. He has a proven track record in analysing investment opportunities, developing financial strategies, and driving sustainable growth. He is passionate about leveraging finance as a catalyst for clean energy transition and environmental sustainability. Nandikesh Sivalingam has over 15 years of experience working for non-profits on diverse issues. He is one of the founders of the Centre for Research on Energy and Clean Air (CREA), which focuses on revealing the trends, causes, and health impacts, as well as the solutions to air pollution through data-driven research. Rishikesh Sreehari holds a postgraduate degree in Renewable Energy and Distributed Generation from Heriot-Watt University, UK. He has worked previously on unique hybrid power generation networks that give rural communities 24 × 7 access to lowcost, grid-compatible energy. His areas of interest include renewable energy integration, distributed renewable energy, and climate policy. Shantanu Srivastava, an energy finance analyst at IEEFA India, specialises in financing, policy, and technology matters of the Indian electricity market. He has past experience in corporate finance and strategy consulting. A CFA charter holder, he has an MBA in finance from IMT and an engineering degree from NMIMS University, Mumbai. Hari Subbish Kumar Subramanian’s areas of interest are renewable energy and energy transition. He is currently an energy transition researcher at Asar Social Impact Advisors Pvt Ltd. He holds Master’s degree in Sustainable Energy Technology from the Technical University of Eindhoven. Hari is the co-founder of Brineys, a startup that focuses on innovative and sustainable means of addressing drinking water scarcity. Naini Swami is working as Research Associate at the Centre for Energy, Environment, and People (CEEP). In her work at CEEP, Naini has focused on land and labour governance issues in Rajasthan’s energy transition. The key issues she has worked on include decommissioning thermal power plants and the local impact of renewable energy expansion. Pradip Swarnakar is Professor of Sociology at the Department of Humanities and Social Sciences, Indian Institute of Technology Kanpur, India. He has been Adjunct Fellow at the University of Technology Sydney, Australia, and a visiting scholar at the University of San Francisco, University of Helsinki, and Helmholtz Centre for Environmental Research GmbH-UFZ. Tanmay Takle is a student in the Climate School at Columbia University, New York. Previously, he was the Policy Advisor to the Minister for Environment & Climate Change of the Government of Maharashtra. In that role, he supported the then-minister xx Contributors on climate policy, research, programme strategy, and communications and led stakeholder engagements as well as strategic planning and partnerships. Suranjali Tandon is Assistant Professor at the National Institute of Public Finance (NIPFP) and Policy and Visiting Senior Fellow at Grantham Research Institute, LSE. She currently leads NIPFP’s work on sustainable finance and direct taxation. Shubham Thakare is a Public Policy Professional and has extensively worked as an Energy Modeller for the past four years. His experience has been centred on developing energy system models assessing decarbonisation of power and heavy industries in India. He has worked on India’s high-scale renewable energy integration and assessed its associated challenges. Vasundhara Thakur is a doctoral candidate at the Kiel Institute for the World Economy and Bielefeld University. Prior to this, she worked as a Research Associate at the Indian Council for Research on International Economic Relations. Her work spans the areas of international trade, investment, and finance. She holds a master’s and bachelor's degree in Economics. Saurabh Trivedi is a research analyst with IEEFA. His focus is on analysing global investment flows into clean energy and fossil fuel sectors with specific attention to debt investment. He also analyses the role of innovative sustainable finance investments in transitioning Indian fossil fuel companies to clean energy. Saurabh is currently a fulltime industry PhD student at Macquarie University. Suresh Veeraraghavan is a human rights lawyer with over 35 years of courtroom experience in the Madras High Court and Supreme Court. Dr. Suresh is the National General Secretary of the People’s Union of Civil Liberties (PUCL) and the Founder and Director of the “Barefoot Academy of Governance.” He has worked extensively on ‘institutional transformation’ in Tamil Nadu, Odisha, Nagaland, Pondicherry, Himachal Pradesh, and others. Balasubramanian Viswanathan is an Energy Analyst at Sustainable Energy for All based out of Vienna, Austria. Previously, he worked with the International Institute for Sustainable Development’s Energy programme. He engages in data collection and analysis, stakeholder consultations, policy review, project management, and communication on issues related to a clean energy transition. Bala holds a bachelor’s degree in mechanical engineering from BITS Pilani (India) and a master’s degree in sustainable energy engineering from KTH Royal Institute of Technology (Sweden). Established in 1998 as an interdisciplinary platform, the Centre for Development and Environment Policy (CDEP) at IIM Calcutta has a mandate of addressing, through research, teaching as well as training, the complex relationship between economic activities and the natural environment. When a new committee took over the activities of the Centre in July 2021, it decided to choose energy transition as a focus area of its activities. Coincidentally, around the same time, Mr Sumant Sinha, Chairman and CEO of Renew Power, and then, a board member of IIM Calcutta, introduced CDEP to Mr Kartikeya Singh of the Stichting SED Fund (now with Global Energy Futures Initiative), with the idea of connecting academia to civil society organisations working in this area. Soon, CDEP was talking to organisations such as International Institute for Sustainable Development (IISD), Institute for Energy Economics and Financial Analysis (IEEFA), and Climate Policy Initiative (CPI), and the Building Roadmaps for Industrial Decarbonisation and Green Economy (BRIDGE) initiative took shape. The BRIDGE initiative aims to create knowledge and knowledge bases on how to accomplish an effective and just carbon transition through developing a network of professionals working in the area of low carbon transition financing and strategy and disseminate the new knowledge on how public and private energy firms can adapt to energy transition through open-source networks. Further, it intends to develop policy advisories to focus attention towards just carbon transition for business using nonpartisan analysis and research for discussion on this broad econo-socio-technical issue. In addition, it endeavours to build awareness, and train executives of public and private energy firms in evolving best practices on transition in India and other developing nations as well as postgraduate and doctoral students on low carbon transition finance and strategy. This volume titled The Role of Coal in a Sustainable Energy Mix for India: A Wideangle View is one of the many outcomes of the BRIDGE initiative. While its findings have a clear policy orientation and will, hopefully, inform policymakers in the government and decision makers in the corporate work world, the primary objective of this edited book is to formulate a research agenda for developing pathways towards transition to low carbon economy and creating knowledge support systems to enable a Just Transition. We hope, therefore, that this volume will be a one-stop shop for anyone looking for extant and evolving knowledge, both in terms of theory and its applications, related to transition to low carbon for the coal-fired power industry in India. The journey towards bringing together this manuscript began around the end of 2021 over several online meetings with researchers and practitioners from CPI, Preface and Acknowledgements xxii Preface and Acknowledgements IEEFA, and IISD along with members of the CDEP committee. After several deliberations, we zeroed in on coal, the power sector, and India as the themes for the first volume. Over numerous meetings, online and, in person, an editorial committee comprising Christopher Beaton, Dhruba Purkayastha, Mritiunjoy Mohanty, and Runa Sarkar worked together to identify potential contributors. This was followed by a two-day workshop in May 2022 at the IIM Calcutta campus, attended by more than 30 researchers and policy practitioners from varied disciplines like Economics, Finance, Political Science, Environment Studies, and Climate Change for brainstorming and formulating ideas. The importance of a dialogue between research and policy through implementable solutions, taking into account not just the technoeconomic interests but also the socio-economic considerations, given the existence of a large informal economy and labour market in India was the key takeaway from the deliberations. The editorial committee then worked together in finalising the title for the volume and selecting and categorising the contributions and arriving at the preliminary structure. The contributions went through a first round of peer review, followed by a write/workshop at IIM Calcutta in December 2022 to enable conversations across contributions while weaving them together. Forty delegates from 24 institutes attended the writeshop. Mritiunjoy Mohanty and Runa Sarkar then took over the more hands-on editorial tasks, including connecting with Routledge for the publication of the volume. Now that we are at the last milestone of this journey that commenced over a year and a half ago, we look back and realise that none of this would have been possible if the then Director-in-charge Prof. Subir Bhattacharya, had not connected CDEP with Mr Sumant Sinha and Mr Kartikeya Singh. This volume is the outcome of their vision and support. The guiding role played by Mr Christopher Beaton, Dr Dhruba Purkayastha, Ms Vibhuti Garg, and Mr Balasubramanian Viswanathan has been exemplary. Support from the Stichting SED Fund, specifically from Mr Vikas Mehta, Ms Milagros Falus, Ms Shaily Jha, and Mr Sai Siddharth is deeply acknowledged. We are grateful to our doctoral students, Arunika Mishra, Shreyasee Das, Samhita Kasibhatta, Himadri Shekhar Chakrabarty, Ravi Satpute, Manhar Manchanda, and Aiman Nida, who rapporteured for the two brainstorming workshops held at IIM Calcutta. The unstinted support of IIM Calcutta’s Director, Prof. Uttam Kumar Sarkar, faculty, and staff has ensured that this volume has seen the light of day. We wish to place on record our gratitude to Prof. Krishanu Rakshit, and members of the CDEP committee, namely, Prof. Bhaskar Chakrabarti and Prof. Manish Thakur, Prof Sumanta Basu, Prof Kaushik Roy, Prof. Randhir Kumar, and Prof. Arnab Bhattacharya, who working as a team, contributed to different aspects of BRIDGE and bottom lined both the workshops. Prathamesh Mokal and Swathy Swaminathan have spent enormous time and effort behind the scenes, putting together this volume with 21 chapters, 5 boxes, 11 appendices and 57 contributors, including putting up with two cantankerous editors. A big thank you to them! The team at Routledge has had to be very patient and put up with innumerable changes and postponements. Ms Shoma Choudhury was an enthusiastic supporter of our project from the very first time we mentioned it to her. The painstaking and careful copyediting work of Mr Sanjeevi Nagarajan and his team was invaluable and has added to the volume’s readability and clarity. We remain indebted to them. Finally, we cannot thank enough, every workshop and writeshop attendee and contributors to this volume. Interactions with each one of you have enriched us in myriad Preface and Acknowledgements xxiii ways and we have been humbled by the support received from all of you to ensure that this volume actually sees the light of day. That today there is a network of academics and policy practitioners working together and sharing ideas at the frontiers of climate change is perhaps the biggest gift of this volume. Mritiunjoy Mohanty and Runa Sarkar xxx Abbreviations SDP State Domestic Product SDS Sustainable Development Scenario SEB State Electricity Board SEBI Securities and Exchange Board of India SECI Solar Energy Corporation of India SECL South Eastern Coal Field Limited SERC State Electricity Regulatory Commissions SEZ Special Economic Zone SHG Self Help Group SIDBI Small Industrial Development Bank of India SIP Systematic Investment Planning SJRP Sector Jobs Resilience Plan SLB Sustainability-Linked Bond SLF Sustainability-Linked Finance SLGB Sustainability-Linked Green Bond SLNP Street Lighting National Programme SMES Superconducting Magnetic Energy Storage SOE State-Owned Enterprises SPTs Sustainability Performance Targets SPVs Special Purpose Vehicles ST&D Sub-Transmission & Distribution STEPS Stated Policies Scenario SWM Solid Waste Management SynCON Synchronous Condenser TERI The Energy and Resources Institute TES Thermal Energy Storage TISCO Tata Iron and Steel Company TOR Terms of References TPI Transition Pathway Initiative TPP Thermal Power Plants TWh Terawatt Hour UDAY Ujjwal Discom Assurance Yojana UJALA Unnat Jyoti By Affordable Led For All ULIP Unit-Linked Investment Plans UN SDGs United Nations Sustainable Development Goals UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention On Climate Change UNIDO United Nations Industrial Development Organization UT Union Territory VPPA Virtual Power Purchase Agreement VRE Variable RE WCL Western Coalfield Limited Context That climate change, with all its deleterious effects, is upon us is an undisputed truth. It is also accepted universally that the impact of climate change will be much harsher on the global south rather than the global north. Specifically, it will be harsh on India, given its per capita income level, its geographical latitudinal location, the long coastline of peninsular India, the mountain ranges of the Hindu Kush, and the Himalayas framing South Asia’s northern borders. The accumulation of CO2 and CO2 equivalent gases in the earth’s atmosphere is believed to be responsible for the gradual increase in global temperatures which have led to climate change. One of the indisputable ways to mitigate the impact of climate change is, therefore, to reduce the amount of CO2 and CO2-equivalent gases emitted into the earth’s atmosphere. The burning of fossil fuels, which are essentially fossilised carbon sinks formed over millennia, is a primary source of CO2. As a result, the decarbonisation of the energy sector has been gaining increased attention recently, as is evident in the recent Conference of Parties (COP) meetings across the world, with countries making net-zero commitments with respect to CO2 emissions and updating Nationally Determined Contributions (NDCs) made to the United Nations Framework Convention on Climate Change (UNFCCC). India, given its vast population and its current trajectory, will be one of the engines of global growth for the next few decades. In general, economic growth is propelled by a greater use of energy. This is even more true for India where one of the objectives of economic growth is to provide access to (electrical) energy to a vast population that still does not have it while making electricity affordable for all. The largest source of electricity generation in India is the burning of coal as it is available easily, and, arguably, the cheapest way to generate electricity as to date. At the same time, India, being the fourthlargest emitter of GHGs in the world (however, 140th in per capita emissions terms), recognises that its involvement in the global decarbonisation effort will be crucial as the major economies of the world move towards net-zero emissions targets by the middle of the twenty-first century. More importantly, green technologies can also be an alternate route to economic growth, development, and job creation as they become more affordable and effective. While it is commonly acknowledged that the most obvious way to achieve decarbonisation is the use of renewable energy, the complexity of the interdependencies between the secondary energy carriers and end-use energy sectors cannot be underestimated. The entire economic system is locked into fossil fuel (specifically coal)–based energy and transportation systems through path-dependent processes driven by the irrefutable logic Introduction Mritiunjoy Mohanty and Runa Sarkar This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-1 10.4324/9781003433088-1 2 Mritiunjoy Mohanty and Runa Sarkar Introduction of increasing returns to scale. These technological systems, established through a coevolutionary process among technological infrastructures, organisations, society, and governing institutions, create a sense of stability, predictability, and possibly reliability in the system, thereby creating inertial resistance when a change away from fossil fuels is considered. Moreover, these systems support and nurture the economic activity, identity, and sustenance of a large fraction of the population of the country. Therefore, any change must also keep squarely in focus their livelihoods and well-being. In addition, the Ukraine war has prioritised energy security as an area of attention for all countries globally. In that context, it is understandable that India, with its vast resources of coal and ample access to solar energy, would give greater weightage to these two sources in its energy mix, while trying to balance sustainability with energy security. Yet, given the writing on the wall, phasing down coal cannot be ignored. A review of various government announcements, policies, roadmaps, targets, and scenarios forecast leads to the belief that while the Indian government has set goals and announced targets towards a low carbon future, and made some progress in that direction, there still remains a lack of clarity on both the path(s) and the means of achieving these. Alternate pathways to a low carbon future for India would be a combination of three generic policy approaches which are progressively disruptive of existing technological systems, namely focus on end-of-pipe solutions without too many changes to the source of carbon emissions; modify selected components or processes of the system, but maintain the overall system architecture, that is, fortify the fossil fuel–based backbone of energy systems with incremental improvements and efficiency based interventions; and replace the energy systems entirely with alternative sources of energy such as renewables. Transition has to be systemic, involving people, technology, and finance. Ensuring sustainability in the energy mix is particularly challenging when it is not directly in consonance with energy security, affordability, and access. There are many pathways to achieve India’s nationally determined contribution commitments, and there has been a lot of research and discussion on the role of coal in shaping these paths. Intellectual and policy contributions on the state of extant power transmission and distribution companies on how to price and promote solar and wind energy and on the concerns of a just energy transition abound. What this volume seeks to do is to employ a cross-cutting approach to weave together occasionally divergent lines of specialised thought into a tapestry that demystifies the challenges of and approach towards moving on to a more sustainable energy path (mix) for India. It takes stock of the current knowledge in this area and identifies the research gaps. It does not intend to replicate existing work but has brought together scholars and policy practitioners working in the area to deliberate on how to go forward and build on each other’s research. It has been successful in bringing 57 researchers, policy advocates, and practitioners from 30 different institutions to sit across the table and discuss their perspectives and finally put them together as contributions to the volume. Most of the contributions in this volume are collaborative efforts of two or more institutions, demonstrating the specialised, yet interdisciplinary nature of both the issue at hand and their own work. It is this cross-cutting, interdisciplinary, and plural approach to conversations around energy transition which we think differentiates this volume from the many excellent offerings available in this area. We hope that the volume will inform deliberations of the G20 as they focus on the decarbonisation challenges of the global south and will be useful to policymakers as they ideate how to fashion India’s transition pathway to meet its net-zero goal by 2070. Introduction 3 As climate history tells us, energy transitions are not new to India (or to the world). The move away from bio-mass as the primary source of fuel to coal and oil and gas was a result of demand-side technologies that improved the quality of human life. The transition from gas lights to electrification was also disruptive and demand driven. The current energy transition away from fossil fuels is different for two reasons. First, the transition, driven by concerns over climate change, will be driven largely by policy rather than pulled by demand. The role of policymakers could ensure a more orderly transition, one where the ramp-down of highCO2 emitting assets is carefully coordinated with the ramp-up of lowCO2 emitting ones and which is supported by the appropriate redundancy and resiliency measures. However, there is a fear that in the process it could also decelerate the process resulting in graver economic damage from climate change. Second, from the very beginning, both the notion of and focus on a Just Transition have been built into the process, which was lacking in any of the past energy transitions. Ensuring that the impact of the energy transition on people, both directly and indirectly associated with or affected by it, is considered and ameliorated as part of the transition process is one of the fundamental principles enshrined in any energy transition policy followed today. In that spirit, besides being cross-cutting and plural, the other defining feature of the volume is that the concept of Just Transition runs as a common thread through each of the four sections, rather than being addressed in an independent section. Chapters In the first section (A Macroeconomic Analysis of Alternate Pathways) of the volume, in Chapter 1 (India's coal and coal-fired electricity needs by 2030) Dahiya et al present a macroeconomic analysis of the multiple pathways towards a sustainable energy mix for India and argue that India’s coal needs have been consistently overestimated. After an analytical assessment of India’s energy needs and the availability of extant coal to address it, in Chapter 2 (India’s Energy Trilemma and Coal-based Power Generation) Basu and Nayak address the challenges of the trilemma of energy access, affordability, and security faced by India and its impact on transition choices. In Chapter 3 (Energy Transition and Centre-State Priorities) Tirthankar Mandal explores the role of federalism and conversations between central and state governments in initiating and enabling the transition, its macroeconomic impact, and specifically the social costs involved. Ray et al discuss the macroeconomic implications of a coal phase down in Chapter 4 (Macroeconomic Impacts of Coal Transition). Sharma and Loginova draw on international experience to understand the social costs of a coal phase down in Chapter 5 (The social costs of India’s energy transition). In Chapter 6 (Deep Electrification in India), which concludes Section 1, Shukla et al discuss the state of play with respect to deep electrification as a complementary strategy to be implemented alongside the movement away from fossil fuel–based energy. The next section (Governance and Policy Perspectives) brings together discussions on transition from a policy perspective, both normative and positive. Grover et al take a normative view in Chapter 7 (Governance Principles for a Just Energy Transition) and propose broad principles for a people-centred transition within India’s constitutional framework and India’s development paradigm. This is followed by Shukla and Pachauri’s positive analysis in Chapter 8 (Policy Framework for Energy Transition in India) of the extant policy landscape in terms of its objectives, governance mechanisms, tools of regulation. Mohanty et al in Chapter 9 (Industrial Policy 2.0) discuss the resurgence in the use 4 Mritiunjoy Mohanty and Runa Sarkar of industrial policy in the context of new evidence about its effectiveness both in terms of technological catch-up, as well as technological change, and its key role therefore in adapting to climate change. Joshi and Dsouza draw on international experience to outline lessons for India in charting a just energy transition in Chapter 10 (International Experiences on Just Energy Transition Planning and lessons for India). The section closes with Chapter 11 (Grounded Perspectives on Energy Transition) where Pai et al give us a grounded perspective from Jharkhand, a mineral-rich state of India, making a case for a bottom-up approach by including the voices of the local communities in this discourse. Systemic transitions will always create opportunities for some industries while presenting challenging circumstances for others. Section three (Industry: Opportunities and Challenges) explores some of these. Given the size and impact of the coal-fired power sector in India, which will be at the receiving end of a coal phase-down, the first three chapters of the section analyse how to improve the efficiency of these power plants and their retrofits and repurposing. Chapter 12 (Retrofit decarbonisation and Reutilization of Thermal Power Plants) opens this section with an analysis by Bhattacharjee and Sen on the possibilities of reuse of resources formerly used by decommissioned thermal plants. In Chapter 13 (Future-proofing India’s coal PSUs) Khurana et al assess diversification strategies of two of India’s largest state-owned enterprises, Coal India Limited and NTPC, in terms of their future readiness to continue to dominate in the energy sector where coal may not be the most prominent fuel. Sabuj Mandal carries out a state level analysis of thermal power plants in terms of their energy efficiency in Chapter 14 (An evaluation of energy and environmental efficiency of the Indian Thermal power plants). In Chapter 15 (Energy storage and its potential role in electricity transition) Thakare and Sreehari explore the role of and opportunities for the energy storage industry in a successful transition to renewable energy use. Finally, the section closes with Majumdarr et al analysing in Chapter 16 (International Experiences) experiences and best practices of other large conglomerates from across the world both in transitioning away from coal as well as renewable energy generation. Concerns around the availability of finance are a recurrent theme in almost all the previous discussions, and the last section (Investors and Shareholders) addresses just that. In Chapter 17 (Financing India’s 2030 NDC targets and beyond) the first chapter of this section, Singh and Kumar point out that of the four major debt financing engines, domestic banks, domestic bond markets, foreign institutional funding, and international green bonds, only domestic banks and international bonds are responsible for the flows of funds for the energy transition. Sovereign wealth and pension funds dominate the equity side. In Chapter 18 (Transition Finance) Sikka et al explore financing transition technologies from the perspective of financial institutions, identifying the lack of an enabling environment, innovative financial instruments, and a high cost of capital as inhibiting flows. These challenges, and possible solutions, are then explored further in the context of domestic institutional investors in Chapter 19 (Role of Domestic Institutional Capital in Funding India’s Energy Transition) by Shantanu Srivastava. In Chapter 20 (Operationalising Just Transition in India) Kumar and Tandon take a pragmatic approach to managing and augmenting public and private financial flows by mapping issues arising from Just Transition, and its impact across the financial sector, firms, and people. The section ends with Chapter 21 (International Climate Financing and Just Energy Transition) where Swarnakar and Shukla explore the potential of climate financing to deliver distributive and procedural justice in the Just Transition process. Each section also has its own introduction, introducing chapters contained. Introduction 5 What the Volume Does Not Cover When embarking on a quest on a subject as ambitious as the role of coal in a sustainable energy mix for India, it is to be expected that there would be many matters that are germane to the area but which may not have been adequately covered in this volume. Given below is a listing of a few important areas, in our understanding, which needs to be debated and discussed as we chart out a transition path to a sustainable energy future. For example, while there is some discussion on how large corporate India is doing its bit, benchmarked with the companies from the rest of the world, there is little-to-no discussion on what is happening to the MSMEs or to the proverbial missing middle of India’s industry. CDEP’s own interaction with MSMEs suggests that this is not necessarily because they are unaware of the challenges or lack interest. MSMEs need to be incorporated into this discussion for two different reasons – first, MSMEs contribute a significant portion of non-agricultural value-added and the bulk of employment, raising the salience of their success (or otherwise) in transition; second, in adopting transition paths, MSMEs will have very different requirements and constraints as compared with large corporates, necessitating a different institutional response. Further, we are aware that an ever-greater number of companies are recognizing how shifting investor preferences, as well as changes in technology, regulation, and consumer behaviours, are changing the basis for competition and are calling for an altogether greater level of global and local collaboration. We have been unable to delve into these aspects in this volume, although there is a rich literature available in this area and several Indian firms have taken commendable strides towards changing their energy mix because of such drivers. Despite significant declines in poverty levels as a result of rapid growth, in India, a substantial proportion of the population still lives below the poverty line. Using the extended Tendulkar poverty line and NSSO’s Employment and Unemployment Surveys for 2011–2012 and 2019–2020 and making appropriate adjustments to ensure comparability, Santosh Mehrotra and Jajati Parida estimate that in 2019–2020 India’s headcount poverty ratio stood at 20.8% (‘Poor Economics: Has India’s Poverty Really Fallen?’ Santosh Mehrotra and Jajati Parida, Financial Express, 30.04.2022). Ideally, over the next decade or so India has to grow fast enough not only to ensure that this poverty is wiped out but also that consumption levels, which even after crossing the poverty line remain abysmally low, rise substantially. That is to say, at the lower deciles, consumption should grow faster than GDP, implying a decline in inequality. The implications for CO2 emissions for a growth path where consumption inequality falls have not been addressed in this volume. Ideally what we should aim for is a decline in the carbon intensity of consumption even as the consumption levels of the poor increase in both relative and absolute terms, allowing CO2 emissions to decline even as consumption rises. Another area that has not been touched upon at all in this volume is the linkages of a transition to a sustainable energy mix to climate change adaptation measures. Reliable and affordable renewable energy services could provide a ‘greener infrastructure’ for the most climate-vulnerable countries or sectors. Specific adaptation needs and potential renewables-based solutions in water, food, agriculture, and forestry; natural disaster response; oceans, coasts, and small islands; and human health, have been explored in a global context, but there is room for further work contextualising this research for India. On a related matter, there are interventions on the demand side that involve behavioural changes to reduce the extent of consumption of energy. Important as these be, 6 Mritiunjoy Mohanty and Runa Sarkar this volume, however, does not deliberate on demand-side energy management ranging from making more energy efficient equipment to responsible consumerism but limits its focus to the supply side. Keeping the objective of raising consumption levels intact, there are several actions that can be taken to shape the “quality of consumption.” Questions such as can overall consumption be decarbonised and how to reduce inequality of energy intensity of consumption across different income deciles have not been addressed in the volume. Discussions on other CO2-releasing activities such as land use and land use change, or transport, or other industry are restricted to only ways in which thermal power plants would be affected by such activities. India’s current savings–GDP ratio is around 30–31%. For India’s GDP to grow at a sustained rate of 7.5–8% (and assuming declining carbon intensity of production and consumption), an average investment ratio of around 35% and a savings ratio of around 33% would be needed. This would imply an increase in the savings ratio of about 2–3% from current levels. Assuming that the financial savings ratio grows in tandem with the gross savings ratio, this would imply an increase in household financial savings as well and therefore increasing intermediation through the banking system, potentially increasing the level of resources available to finance decarbonisation strategies and pathways. We feel adequate attention has not been paid to this aspect in discussions around resource mobilisation for decarbonisation. There is also very little discussion on what is the appropriate social discount rate at which we, collectively as a society, discount the future. This is critical for inter-generational equity. The lower the discount rate, the more we care about future generations; the higher the discount rate the more we value the current generations. For example, the Biden Administration used a social discount rate of 2% to justify clean energy subsidies granted under the USA’s 2022 Inflation Reduction Act (The obscure calculation transforming climate policy, Ula Chrobak, 12.06.2022, Knowable Magazine). The social discount is a policy variable, and it is important to have a transparent debate around it because it will critically shape the transition path we adopt. Detailed discussions on the proverbial elephant in the room – the distribution grid – has been deliberately avoided. Delving into these debates could fill an entire volume and, equally importantly, we ran the risk of losing focus by getting lost in the intricacies of the challenges faced by distribution companies. There is a lot to learn from international experiences of energy transition in South Africa, the USA, and the EU, and only limited examples have been touched upon in the chapters for similar reasons. Finally, and perhaps most importantly, we have not devoted enough discussion to the increasing costs of delaying or slowing the pace of the transition. While it is important to have a deliberated time horizon for transition, taking all stakeholders into account, it is also important to stress the need to act and commit now to a decarbonisation path so as to avoid an unrelenting accumulation and compounding of physical risks in the future. This would require a different time horizon and discount rate from those currently guiding decisions. Actions to secure the transition are often perceived as costs incurred today, rather than investments in humanity’s collective future. Taking the Discussion Forward The volume is an attempt to create a knowledge base by putting together findings from extant literature and practices under a common framework to facilitate collective reflection and work towards making the research on decarbonisation in its various dimensions Introduction 7 more mainstream. Achieving net zero is, in its essence, solving an equation that balances sources and sinks of emissions by reducing GHG emissions as much as possible while increasing GHG stores to remove any remaining emissions from the atmosphere. This is not a single equation but a system of equations. The emissions equation is coupled with a capital and a labour equation. The demand for capital and labour in a net-zero economy must match with supply, over time and across regions. And these equations must be solved simultaneously or concurrently while pursuing economic development and inclusive growth. Moreover, a lot depends on what is happening in the rest of the world. Enablers to arrive at a sustainable energy mix include technological innovation that can be scaled up, creation of supporting supply chains and infrastructure, availability of necessary natural resources, effective capital reallocation and financing structures, compensating mechanisms to address socioeconomic impacts, governing standards and effective institutions, political commitment, and support from citizens both as producers and as consumers. As eminent historian Peter Frankopan establishes in his recent book on climate history (The Earth Transformed: An Untold History, 2023, Bloomsbury and Knopf) civilisations past have faced both exogenous as well as man-made climate shocks. Some adapted while some didn’t. There are lessons to be learned from the past and, if we put our collective energies into it, we can successfully adapt too. What Professor Frankopan’s work underlines very clearly, however, is that there is no room for complacency. Business as usual is not an option. We hope this volume contributes towards taking the options forward. As we examine the role of coal in a sustainable energy mix for India in the context of a global push towards transitioning away from it, one has to recognise the systemic, interlinked, and complex nature of how coal is intertwined with the political economy of the country. In addition to powering the nation, coal is the source of direct and indirect employment for millions of people, responsible for a huge contribution to the public finances of the country through tax and other measures and responsible for being the largest customer segment for critical transportation infrastructure. In addition, the need to continue to focus on India’s growth cannot be disputed. Hence, any discussion on balancing the energy mix of the country away from coal must first take a macroeconomic view of the implications of such a change. The remit of this section is to first understand the needs of India’s power sector, keeping in mind its priorities, examine the implications and necessity of a transition away from coal, and identify the changes required to enable a just energy transition. There are few disagreements over the global imperative of a transition to a cleaner energy mix over time. However, there are divergent views on the pace and nature of the transition for India, given the need to balance the need for economic growth which, historically, has been carbon intensive, and decarbonisation strategies. It is in this context that the contributions in this section view India’s transition pathways. Thus, while an assessment of how accurate India’s projected coal needs are for the near future is viewed from a technology lens, a more pragmatic approach is taken to balance the national priorities of equitable growth with India’s international commitments of decarbonisation. A political economy lens is then used to situate the energy transition within India’s federal system, balancing central priorities with those of individual states. From a purely economic view point, one must be able to make a judgement of the impact of a transition away from coal on macroeconomic parameters such as GDP, employment, and public finances. The spatial impact of a transition away from coal on certain geographies of the country and the uneven manner in which different strata of society would get affected also has to be addressed. A Just Transition, that respects social identity and dignity, is the only humane way of initiating a tectonic change in the energy mix of the country. The transition would be incomplete if it was not concomitant with a deep electrification of all the sectors of the Indian economy, and this aspect is considered in the last chapter of this section. In the first chapter, Dahiya, Lolla, Gupta, and Sivalingam clear the haze over India’s projected energy requirements till 2030 to arrive at a realistic assessment of India’s need to mine additional coal. The authors demonstrate that India’s electricity demand has, for Part 1 A Macroeconomic Analysis of Alternate Pathways: an Introduction Mritiunjoy Mohanty and Runa Sarkar This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-2 10.4324/9781003433088-2 16 Sunil Dahiya et al. This further substantiates recent studies which have shown that if India delivers on its RE targets, its coal-fired generation will likely peak by the end of this decade (CREA, 2021), (EMBER, 2021a), (IEEFA, 2021). The estimated level of coal-fired generation in FY 2030 would mean that India may not even need to build any more coal power capacity beyond what is already under construction, even after the planned retirement of older units. India currently has an operating gridconnected coal fleet of 211 GW, which is already running at a low plant load factor (PLF) of 54% (in FY 2022). Further, India’s overall coal power PLF has been falling year-on-year in the last decade (70% in FY 2012 to 54% in FY 2022) (MOP, 2022). This is unlikely to significantly improve in the future too as India has about 27 GW of new coal power plants under different stages of construction (CEA, 2022c), which is more than enough to meet the additional coal-fired generation expected by the end of this decade. What is clear is that India is building new coal power capacity only to ensure it has sufficient capacity to meet peak (instantaneous) demand and any new capacity addition over the current level wouldn’t change the overall coal-fired generation and coal requirement by FY 2030. Increasingly, studies are showing that a better way to plan for peak demand for a few hours a day would be to invest in various RE and storage options and grid modernisation providing more flexibility and better utilisation of increasing RE capacity (EMBER, 2021b). Implications for the Coal Mining Industry India’s coal-fired generation in FY 2030 for different scenarios of average annual demand growth rates of 4.5%, 5%, 5.5%, and 6% from FY 2022, would be 1017 TWh, 1099 TWh, 1185 TWh, and 1273 TWh, respectively. The above projections for 2030, assuming 0.65 kg/kWh specific coal consumption with 1% loss during transportation, would translate into approximately 668 MT, 722 MT, 778 MT, and 836 MT of coal requirement for power generation, respectively. Contrary to this, Coal India Limited’s (CIL) draft Coal Vision 2030 in 2018 predicted a minimum thermal coal demand of 1150 MT if 85% (977 MT, based on past trends) of it is assumed to be consumed for electricity generation. That would translate to greater than 1500 BUs (much higher than the most conservative estimate of 1248 BUs2) including 1% coal loss during transportation. Non-power sector coal demand (coking + non-coking coal) is expected to grow at a higher rate than the coal demand in the power sector. CIL, Coal Vision 2030, predicts that non-power sectors will contribute to nearly 30% of total coal demand in the year 2030. Assuming a coal requirement of 358 MT for the non-power sector (30% of total coal consumed in 2030 at the most optimistic 6% growth), the total coal requirement in India will be 1194 MT in 2030. CIL is the biggest coal miner in India and is responsible for mining more than 80% of domestic production. This is followed by approximately 10% production both by Singareni Collieries Company Limited (SCCL) and captive producers. From a compilation of environmental clearance granted capacity data for individual coal blocks (producing), it is estimated that the total mineable capacity with CIL as of FY 2020–2021 was over 1040 MT compared to the total production of 596 MT illustrating a surplus minable capacity of 444 MT (MOC, 2021). Apart from the existing operational mining capacity, 68 mines with a total additional minable capacity of 350 MTPA (868 MT/year total capacity through enhancement of current operational mines; i.e., 518 MTPA and opening up of new mines) are under different stages of development India’s Coal and Coal-Fired Electricity Needs by 2030 17 with CIL according to monthly statistical reports of the Ministry of Coal (MOC). On top of these, six additional mines were auctioned to CIL which have a total annual minable capacity of 144 MT. If all the capacity comes into operation by 2029, CIL alone will have a minable capacity of more than 1500 MT.3 CIL is the largest coal producer and has a total mineable/environmental clearance capacity of more than 1040 MT in 2020–2021, but coal production for the same year stood at 596 MT, indicating around 60% utilisation of the mines. Figure 1.3 Specific coal consumption by coal-based power stations in India. Source: Authors based on data from CEA (2021) Table 1.1 Electricity demand, coal-based power generation, and total coal requirement under different growth rate scenarios in FY 2030 in India S. No. Annual power demand growth rate for FY 2022-2030 (%) Total power requirement in FY2030 (TWh)6 Coal-fired generation in FY2030 (TWh) Total coal requirement (MT)7 1 4.5% 2122 1017 668 2 5.0% 2204 1099 722 3 5.5% 2290 1185 778 4 6.0% 2378 1273 836 5 Coal Vision, CIL estimate for 2030 1500813009 Source: Authors’ own, compiled from various sources. 18 Sunil Dahiya et al. Table 1.2 Coal production by CIL subsidiaries from 2016–2017 to 2020–2021 and permitted Environment Clearance (EC) capacity for FY 2020– 2021 (MTPA) Company 2016–2017 2017–2018 2018–2019 2019–2020 2020–2021 Permitted production (FY 2020–2021) % Utilisation ECL 40.52 43.57 50.16 50.40 45.03 122.00 37% BCCL 37.04 32.61 31.04 27.73 24.66 128.00 19% CCL 67.05 63.41 68.72 66.89 62.59 84.00 75% NCL 84.10 93.02 101.50 108.05 115.05 128.00 90% WCL 45.63 46.22 53.18 57.64 50.27 129.00 39% SECLa140.00 144.71 157.35 150.55 150.60 226.00 67% MCL 139.21 143.06 144.15 140.36 148.01 222.00 67% NEC 0.60 0.78 0.78 0.52 NA 1.60 CIL 554.14 567.37 606.89 602.13 596.21 1040.60 57% SCCL 61.34 62.01 64.40 64.04 50.58 68 (Coal-India, 2018) aThis includes total production by captive and others. ECL, Eastern Coalfield Limited; BCCL, Bharat Coking Coal Limited; CCL, Central Coalfield Limited; NCL, Northern Coalfield Limited; WCL, Western Coalfield Limited; SECL, South Eastern Coal Field Limited; MCL, Mahanadi Coalfield Limited; NEC, North Eastern Coalfields; SCCL, Singareni Collieries Company Limited. India’s Coal and Coal-Fired Electricity Needs by 2030 19 Apart from this, SCCL also has about 68 MTPA mining capacity and approximately 120 mines with 640 MTPA capacity were allocated/auctioned to captive/private companies/state sector entities since March 2015 under various coal auction/allotment trenches.4 Out of the 120 mines auctioned since 2015 only 27 are operational and 995 still remain non-operational. If we add all operational and mineable reserves with CIL and captive operational reserves with private and other public sector entities, India will have a cumulative coal mining capacity of more than 2200 MTPA by 2030. This is higher than even the most conservative estimates of 1194 MT coal requirement at a 6% average annual electricity demand growth rate, which form the outer limit. Our estimates incorporate the effects, if any, of marginal impacts of mine closures. There are 49 big mines under CIL, captive, and others (FY 21) with a joint minable capacity of more than 720 MT (612 under CIL). Of these more than 35 mines with a total production capacity of 571 MTPA have more than nine years of life left at the current rated capacity. Further investigation of the retirement potential of the existing mines found that mines with an existing capacity of more than 500 MTPA are already planned to go for capacity extensions, leaving very few big mines with a relatively small total mining capacity to opt for shutdown till 2030. Figure 1.4 Minable coal capacity in India for FY 2030 from operational and in-pipeline coal mines. Source: Ministry of Coal. 20 Sunil Dahiya et al. Discussion Based on the estimates of future coal-powered generation capacity and coal requirements, it is evident that a substantially higher coal mining capacity has already been allocated to meet the medium-to-long-term demand even in the most conservative case. Yet, on 3 November 2022, the Finance Minister launched the biggest-ever coal mine auction of 141 coal mines that, if operationalised, would add another 305 MTPA of coal-mining capacity (PIB, 2022b). The continued focus on allocating new coal mines implies that there is likely to be more than 50% surplus mining capacity relative to foreseeable demand. Presumably, the surplus mining capacity will likely account for any delays, terminations or withdrawal of coal mines once allocated – as has been the fate with the mines allocated between 2015 and 2019 where only 27 of the 80 coal mines (approximately 33% – Table 1.3) accounting for ~15% peak rated capacity could be operationalised as of March 2022 (RTI, 2022). The continued focus on allocating new mines beyond the requirement could have important ramifications for (i) delay in India’s pace of energy transition; (ii) influence widespread changes to the industry structure sending a confusing signal to the industry, public, and international stakeholders; (iii) exacerbate pile-up in the stressed mining assets; and (iv) adversely affect environment and social justice. An analysis of the trajectory of allocation of subsidies to the coal sector in India as compared to those allocated to renewables over time is also not in line with the publicity around India’s commitments of a net zero target by 2070. Tracking Government Support to the Coal Sector in India Swasti Raizada, Balasubramanian Viswanathan, and Christopher Beaton (International Institute for Sustainable Development) Historically, government support at the central and state level has played a crucial role across the coal value chain, making it a powerful tool in shaping India’s future energy mix. Based on 18 subsidies that could be identified and were provided by the central government to both coal mining and coal consumption, predominantly in power generation, government subsidies for coal amounted to Rs. 15,933 crores (USD 2.1 Table 1.3 Status of Operationalisation of Coal Blocks Allocated since 2015 (as of 31 March 2022, MOC) Allocation Route Production Status 201510 201611 2017–2020 After 2020 Total AllotmentaOperational 11 2 – – 13 Not Producing 25 14 5 – 44 Auctions Allocated 31 – 6 43 80 Terminated 9+3b– 2 – 14 Operational 14 – – – 14 Non-producing 5 – 4 43 52 Total Operational 25 2 00 27 Non-producing 30 14 9 43 96 Note: a Data for terminated coal blocks via the allotment route is not available b Termination underway; matter sub-judice. India’s Coal and Coal-Fired Electricity Needs by 2030 21 billion) in FY 2022 (Raizada et al., 2022). Provided through GST concessions on coal sales, coal subsidies have largely stagnated. Other fiscally smaller policies cover a range of objectives, including regional exploration, conservation and safety of coal mines, exploration in difficult areas, and special benefits to employees. Direct budgetary transfers accounted for less than 4% of the total subsidy amount in FY 22. Also, government subsidies for coal continue to be higher than RE subsidies in FY 2022. Further, state actors like coal-dependent SOEs – namely CIL, SCCL, NLC India Limited, and NTPC Limited – play a critical role in channelising government support to the coal sector (Viswanathan et al., 2022). In FY 2022, the combined capital expenditure for these SOEs was at least Rs. 42,500 crores (USD 5.2 billion). Government support can also take the form of concessional financing and state guarantees. Known international public finance for coal projects in India totalled Rs.7,356 crores (USD 987 million) between 2019 and 2021 (Oil Change International, 2022). Data on domestic public finance for coal remains sparse with only one coal power project known to have received a standby credit facility of Rs.1,024 crores (USD 0.1 billion) from three banks in 2021. Domestic state-owned financiers are increasingly emerging as the lenders of last resort for the coal sector in India (Centre for Financial Accountability & Climate Trends, 2022). References Centre for Financial Accountability & Climate Trends. (2022). Coal vs Renewables Investment Report 2022. https://www .cenfa .org /wp -content /uploads /2022 /12 /COAL -VS -RENEWABLES -INVESTMENT -REPORT -1 .pdf Oil Change International. (2022). At A Crossroads: Assessing G20 and MDB International Energy Finance Ahead of Stop Funding Fossils Pledge Deadline. https://priceofoil .org / content /uploads /2022 /11 /G20 -At -A -Crossroads .pdf Raizada, S., Laan, T., Manish, M., & Viswanathan, B. (2022). Mapping India’s Energy Policy 2022, December 2022 Update. International Institute for Sustainable Development. https://www .iisd .org /story /mapping -india -energy -policy -2022 -update Viswanathan, B., Raizada, S., Bassi, A., Pallaske, G., & Beaton, C. (2022). India’s State-Owned Energy Enterprises, 2020–2050. International Institute for Sustainable Development. https://www .iisd .org /publications /report /india -state -owned -energy -enterprises 0 5,000 10,000 15,000 20,000 25,000 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 INR crore, real 2022 Others Concessional excise duty on coal producon Non-compliance of coal washing Concessional custom duty on import of coal Concessional GST rates on coal producon Figure 1.5 Total coal subsidies in India, FY 2014–2022 (real 2022). Source: Mapping India's Energy Policy 2022, December 2022 Update (2022). International Institute for Sustainable Development. 22 Sunil Dahiya et al. Potential Delays in Energy Transition Even as India has announced significant energy transition targets at COP 26 from coal to a majority share of renewables in power generation, the excess coal-mining capacity may threaten to put a spanner if the entire capacity were to come onboard. Given that state PSUs (mostly state power generation companies and mineral development corporations that are usually responsible for ensuring adequate power supply in the states and also own large thermal power plants) command nearly 40% of the peak rated capacity (PRC) of mines allocated between 2015 and 2022 (Figure 1.5), these companies may also face a vexed dilemma – should they repurpose existing thermal power plants: (see Chapter 12 in Section 3 for a discussion on repurposing) and invest in renewable power sector which would leave their coal mines as ‘stressed assets’ OR continue to utilise mineral resources from the already allocated mines which in turn would delay their energy transition? Needless to say, if they choose the latter, much of India’s energy transition might get delayed. Further, many of these state PSUs have entered into Mine-Developer-cumOperator (MDO) agreements with private companies that have specific contractual performance agreements wherein the PSUs cannot vary their coal purchase quantities beyond a certain amount, lest they incur default and potential litigation (Figure 1.5). Such contractual conditions are likely to further bind the state PSUs to onboard and sustain significant coal production volumes, potentially increasing the share of thermal power in the production mix. Changes to the Industry Structure It is evident that after 2015, the newly allocated coal mine capacity and the capacity embarked for allotment are larger than the current mining capacity with CIL, and the Figure 1.6 Illustrative clause from MDO agreement. Source: Ministry of Coal. India’s Coal and Coal-Fired Electricity Needs by 2030 23 total allocated capacity stands approximately three times the current annual production volume. Further, the hitherto dominant CIL has been allocated less than a quarter of the new mining capacity, while state PSUs have taken up the lion’s share of new mine allocations. Given the surplus mining capacity present in India, not all of these newly allocated/ auctioned mines are likely to become operational given the projected demand. It remains to be seen which of the mines will become operational and which ones will be likely scrapped. Depending on the dilemmas of operationalisation of these new mines, the coalmining industry structure can undergo a radical transformation from being dominated by a central PSU (CIL and its subsidiaries) to being led by private mining or state PSUs along with their private MDO operators. Such radical transformation of the industry structure in periods of uncertainty (owing to uncertainty around the pace of energy transition) can throw up significant challenges. The state could have substantially less control on the production and distribution of coal resources to power plants across the country. There could be significant price volatility in the interim period leading to abandonment of select coal mines, jeopardising investments in them and associated businesses dependent on them. The planning for a Just Transition of mine-affected workers and communities would require including specific plans for transitioning from new assets beyond CIL and would look very different when the responsibility for transition shifts from the public sector to the private sector. This uncertainty is also likely to send confused signals to the stakeholders and market participants – including mining companies, thermal power producers, banks and investor community, and state and local government. This is already manifesting in the tepid Figure 1.7 New captive coal mines allocated between 2015 and 2022. Source: Ministry of Coal. 24 Sunil Dahiya et al. response to coal mining auctions where only a few bids were received for the newly auctioned coal mines i.e. Tranche 11–14 of the coal mining auctions that took place during the period 2020–2022 (Table 1.4). Twenty-eight per cent of the auctioned blocks saw less than 3 bidders while 18% saw only 3 bidders. Piling of Stressed Assets The surplus mining capacities may likely become stressed assets as was seen in the case of thermal power plants allocated between 2008 and 2014, much of which became stranded as thermal power demand failed to keep pace with capacity. This had widespread consequences as the investments become non-performing assets (NPAs) for the banking sector and result in distress sale of stressed assets at a significant economic loss. The overcapacity became critical in 2018 when the government identified 34 power stations with a total capacity of 40 GW and bank exposure of 1.7 lakh crore as stranded/ stressed assets. These assets were put up for insolvency under the bankruptcy code through the National Company Law Tribunal (NCLT) later. After four long years of trying to resolve these stranded assets through the insolvency process, there are at least 10.5 GW or 25% of these assets which stand at the juncture of being sold as scrap as of date because they did not find any buyers and couldn’t be resolved (ET, 2022). In the case of coal mines, this problem could become even more acute given that the lion’s share of new mine capacity lies with state PSUs that typically have relatively weaker financial health. Adverse Environmental and Social Justice Consequences It is clear that not all of the allocated coal mines are likely to get operationalised. However, given the lack of clarity around which of the mines may fail to come under production, a much larger set of mines is likely to pursue mining clearances (environmental clearances and social consent), acquire land and cut forests (wherever mining area includes forest cover), and even set up mining infrastructure – only to become redundant. Not only is this likely to result in financial stress to the mining companies, but it is also likely to be a deadweight loss to the economy diverting precious economic and natural resources from other pressing requirements. At the same time, any unnecessary social and environmental costs incurred will threaten India’s commitments to environmental and social justice and the agenda for Just Transition. This is particularly critical given the recent attempts to move towards faster clearances for coal mines (News-Click, 2022). Table 1.4 No. of bidders for successfully auctioned mines – Tranche 11–14 Successful auctions (# of blocks) 1 2 3 4 >4 Total 11th Tranche – 3 5 6 5 19 11th Tranche– 2nd attempt 1 – – – – 1 12th Tranche - 4 2 1 1 8 12th Tranche– 2nd attempt 2 1 1 – – 4 13th Tranche – 2 3 2 3 10 14th Tranche – - 2 – 3 5 India’s Coal and Coal-Fired Electricity Needs by 2030 25 Conclusions and Recommendations Ostensibly, the rapid expansion in coal-mining capacity over the past decade has proceeded on the pretext of implications of India’s energy security and imperative for sustaining rapid economic growth (MOC, 2022). However, as the analysis presented in this chapter indicates, India can be confident that current coal power capacity and coal mining capacity are more than adequate to serve the country’s growing electricity demand needs. Even as there remain repeated thermal power shortages and outages across the country leading to questions on the adequate supply of coal in the country (The-Hindu, 2022), it is clear that there is surplus capacity currently in the coal-mining sector. The same is even averred by the Coal Minister’s statement in the parliament where he mentioned that In 2022-2023 (April, 2022 to June, 2022), all India average gap between the Energy Requirement and Energy Supplied was only 1%. Gap between energy demand and supply is generally on account of factors other than inadequacy of power availability in the country, e.g. constraints in the distribution network, financial constraints, commercial reasons, forced outage of generating units, etc. There is no shortage of coal in the country. (PQ-MOC, 2022) In a separate analysis, the Centre for Research on Energy and Clean Air highlighted that the coal shortages in the first half of 2022 weren’t a shortage of coal-mining capacity but a lacuna in managing the resources, supply, and aligned infrastructure to be able to supply to the predicted needs of coal for the period (CREA, 2022). The analysis found that the coal shortage at respective power stations occurred due to mismanagement in mining, coal evacuation from coal mines, lack of stock build-up by the power stations, and the regulator failing in ensuring the efficient function of the coal supply chain. It confirmed that India has more than enough domestic mining capacity to meet the existing demand comfortably. Thus, the continued allocation of new coal mines does little to add to India’s energy security, rather it delays the transition to renewables sending a mixed signal to the market on the pace of India’s energy transition. It must be noted that the timely implementation of renewable power is critical, even for energy security, since diversification indemnifies against energy risk. At the same time, the allocation of excess capacity threatens a potential situation of stressed assets and significant avoidable economic, environmental, and social costs to the economy. There is, thus, a need for revisiting the coal mining allocations and bringing them in line with the mediumto long-term demand projections. There is also an opportunity to look at a Just Transition from the lens of social and environmental justice in the opening of new mines wherein considerations of justice can permeate the opening of new mines in densely forested, ecologically sensitive areas. Rather than investing in a sunset industry, it will be beneficial to focus on things like grid modernisation, better infrastructure for RE integration, and real-time demand management and ensuring that the country meets its commitment of 500GW non-fossil energy capacity by 2030. Notes 1 Ex-bus demand doesn’t include auxiliary consumption. 2 Billion Units. 3 Mineable capacity from SCCL and captive mines is excluded from this figure. 32 Sambit Basu and Soumya Prakash Nayak procuring wind turbines and solar modules at competitive prices. The average price of solar modules has increased by about 35%9 and is likely to remain high as raw material costs are skyrocketing. This would impact the RE developers and domestic manufacturers alike and would be a major hindrance in achieving the targets. 3. Financial health of the State and Electricity Distribution Company (DISCOMs) The viability of RE in the face of rising raw material and input costs is contingent on developers’ ability to secure modules within budget and raise debt fund at reasonable costs (say less than 8.5%). However, the risks faced by the developers, particularly with high amounts of receivables from DISCOMs, impact their costs of borrowing. The overall dues of DISCOMs to RE independent power producers was about Rs. 21,000 crores (as per PRAAPTI portal) putting pressure on the working capital and debt servicing of the developers. This is true for most of the RE-rich states, including Andhra Pradesh, Rajasthan, Madhya Pradesh, Karnataka, and Telangana, which have high revenue deficits, large outstanding liabilities, and large outstanding contingent liabilities. These make the states suspect in terms of extending credible counter guarantees for RE development. Moreover, DISCOMs are stressed for liquidity, arising from operational inefficiency, revenue cost gaps arising from inadequate tariff revisions, outstanding subsidy receivables from the government and receivables from government departments for electricity consumed. All of these add to commercial risk and costs of borrowing for the developers (also see chapter 3). 4. True cost of RE The cost of RE also depends on the location of the generation and utilisation, as the landed cost of RE at place of use may be very high after all transmission costs and losses are stacked up. Thus, it is not just the RE potential that indicates the cost, but also location and use. Discovered tariffs through bidding process do not reflect the true cost of RE, which may burden power procurement costs if RE is mandated to be a must run. 5. Conflicting policies The impact of Basic Custom Duty (BCD) of 40% on modules and 25% on solar cells, while protecting domestic manufacturing will adversely affect the tariffs offered by the developers10 and would slow down the process of capacity addition in the solar sector. Apprehensions on the applicability of BCD have been expressed by manufacturers housed in the Special Economic Zones (SEZs), as they are regarded as international territory for trade and commerce, given that local raw materials bought by producers are treated as exports and goods produced in the SEZs and sold in Domestic Traffic Area are regarded as imports. Nearly 40% of module manufacturing and 60% of the cell manufacturing capacity is in SEZs. 6. Increasing penetration of variable RE renders the grid unstable RE (without storage) poses a huge challenge to the grid operator, as compared to dispatchable fossil fuel plants, owing to their variable and intermittent nature. There is always an element of uncertainty in the output of solar and wind availability forecasts and is very location specific. The capacity utilisation factor of renewables (for solar: 18% and for wind: 22%) is substantially lower than that of conventional power plants. Moreover, with solar and wind plants having a must-run status, the plant load factors for conventional power plants are on a downward trend, leading to higher generation costs. Variable RE, in the absence of cost-effective and adequate energy storage systems (also see chapter 3), poses a challenge in ensuring grid stability. India’s Energy Trilemma and Coal-based Power Generation 33 7. India is predominantly a coal-dependent economy India’s growth aspirations cannot be achieved through RE and energy efficiency alone. Even battery storage and emerging technologies, like green hydrogen and fusion, are neither cost-effective nor commercially ready yet. Therefore, fossil fuels would have to power India to fulfil its development objectives. While environmental sustainability and emission intensity will be addressed through the continued deployment of renewables and increasing penetration of new clean technologies as well as energy storage, coal will continue to play a major role along the energy transition landscape. While we do not have enough gas and harnessing nuclear energy in a densely populated democratic country can be slow, we sit on huge reserves of coal. Besides, we are locked into coal-related infrastructure and investments. Thus, in view of the above and as discussed below, phasing down of the coal-based power generation will be extremely difficult considering the role of coal in India’s socio-economic development and its energy resource availability. It is time to recognise that energy transition is not the same as technology transition. Technology penetration can be disruptive and rapid, but energy transition is a gradual process that should balance socio-economic and environmental implications in an equitable manner11. Importance of Coal in India’s Energy Transition It took an uncertain and disruptive event like the Russia–Ukraine war to demonstrate the importance of energy security for a country. Energy security implies adequate and reliable supply, and this entails looking inward for energy resources reducing external dependence across the entire value chain. The recent events underscore that the importance of fossil fuels, and nuclear energy cannot be wished away easily in favour of clean and safe energy, even for the developed countries like Germany, UK, France, and the USA. Many of these countries, particularly the European nations that have been vociferous against environmentally dirty fossil fuels, and stopped expansion of nuclear power capacity after the Three Miles Island accident (1979), the Chernobyl disaster (1986), and Fukushima nuclear calamity (2011), are once again trying to revive mothballed thermal plants and re-plan nuclear power development. Reality has dawned on all nations, developed and developing alike, that rapid decarbonisation through phase-out or phase-down of coal plants is an unachievable dream. The recent attempts across the globe to revive conventional power generation seals the discussion on whether coal should continue to figure amongst the transition fuel mix along India’s development trajectory, despite having declared ambitious renewable energy targets. The challenges of expanding variable RE (VRE), as discussed above, are compounded by its adverse impact on energy security. Thus, the onus of energising development in India with reliable and affordable energy rests on conventional fossil fuels, major hydro, and nuclear. Major hydro and nuclear development in India have been quite slow so far, with their share in total generation remaining stagnant for decades. India does not have enough gas which has resulted in 14.3GW of stranded gas-based capacity across 31 plants, out of a total installed gas-based capacity of 24.82 GW (Baruah, 2023). However, now with increased penetration of RE in the grid and resulting grid instability and the need to meet a rapidly growing peak demand during high-demand seasons, experiments are being explored to use the stranded gas plants using imported liquefied natural gas 34 Sambit Basu and Soumya Prakash Nayak (LNG) to meet the demand and balance the grid. This may be financially manageable considering that during the peak season of summer in India the global gas prices are relatively cheaper and medium-term future contracts may yield attractive deals. Studies have observed that even with volatile global LNG prices, gas-based power generation as a relief to peaking requirement during summer season may be more economical than short-term market options, including purchases over power exchange, bilateral trade, and deviation settlement mechanisms (Baruah, 2023). Thus, blessed with large domestic coal reserves and the importance of electricity to balance India’s energy trilemma, coal will play a critical role in its development trajectory over the next couple of decades with additional support from other conventional fuels. A coal transition exposure index introduced by International Energy Agency (IEA) taking into consideration a country’s coal – (i) energy dependence, (ii) development gap, (iii) lock-in, and (iv) economic dependence, indicates that Indonesia, Mongolia, China, Vietnam, India, South Africa, and Botswana have very high indices of coal exposure in transition (Tachev, 2022). India’s exposure is high on account of the development gap, lock-in, and coal dependence. India’s coal consumption has doubled since 2007, growing at an average annual rate of about 6% and is led by electricity generation. Coal-based electricity generation accounts for more than 73% of India’s electricity needs and is likely to remain the major source over the next couple of decades. Coal-based capacity at about 204 GW accounts for more than 50% of the overall grid-connected power generation capacity, with a notable additional coal-based capacity under construction. According to a CEA Report,12 of the total 53.24 GW of thermal power plants (TPP) in the pipeline, about 24.4GW of the TPPs have been put on hold or are unlikely to be constructed and about 28.87GW TPPs are likely to be included in the national capacity between 2022–2023 and 2026–2027. The TPPs unlikely to be constructed are mostly in the private sector (about 23.21GWs) and are not finding financing or going through liquidation. The private sector has been facing difficulty in financing coal-based projects as banks and financial institutions around the world are staying away from coal mining and coal TPP projects. The public sector, however, has been able to raise finance from government finance companies. State and central sector projects account for the entire 28.87GW of the projects under construction and likely to be added. Over the next decade the coal demand by TPPs, operating at relatively low utilisation levels in recent years, around 58.87% in 2021–22 when in 2008–2009 it was 77.7%, due to rapid penetration of RE, is likely to go up substantially.13 Thus, despite no new capacity of coal TPP being added, coal shall continue to dominate electricity generation and the energy scenario in the short-to-medium term. Further, phasing out of existing coal TPPs and rapidly replacing them with clean energy resources is not a likely strategy in the immediate future. This is because the Indian power sector is locked into a basket of young coal-based power plants, where the average age of a plant is just about 13 years, while its economic life is 40 years.14 Compared to this, the average age of coal plants in South Africa is 30 years, and 41 years for Russia and the USA. The locked-in investment of the Indian TPP portfolio exceeds Rs. 8 trillion,15 and TPPs under construction would further add to the locked-in investments. If coal production, transportation, and associated infrastructure to coal TPPs are considered, then the investments locked into would be massive and it would be very costly to phase out much before the completion of their economic life. India was the world’s second-largest producer of coal in 2017, according to the IEA, while China topped the list. India produced about 780–800 million tons of coal in 2022, India’s Energy Trilemma and Coal-based Power Generation 35 according to the Ministry of Coal (MoC), but consumption still exceeded by about 200 million tons that was imported from Indonesia, South Africa, and Australia. Around 87% of India’s proven coal reserves of nearly 150 billion tonnes is non-coking coal, yet, a fifth of the thermal coal requirement is imported. In comparison, China, which consumes four times more coal than India, also imports about 200 million tons annually. Considering that various studies conclude that the future of coal is secure in India for another 20–30 years, even as VRE proliferates, large coal imports is a matter of concern given its vulnerability to high global prices16 and energy security issues. BP Energy Outlook 201917 projected the coal’s share in India’s primary energy consumption to be 48% in 2040 despite a decline from 56% in 2017. Likewise, IEA (in India Energy Outlook 2021) has observed that coal in the power sector will be 67% (in MTOE18 terms) of share in 2030 and 50% in 2040 under a Business-as-Usual scenario. Further, according to the MoC, the requirement of coal by 2029–2030 has been estimated at about 1.45–1.5 billion tonnes, for which domestic production will have to go up substantially to meet the demand and bring down coal imports, although it may remain about 170MT.19,20 Thus, the coal companies in India will be ramping up coal production to meet the MoC’s projected 63% higher targets of about 1.5 billion tons of coal by 2030. In view of this, the MoC has been amending mineral concession rules, introducing policies and guidelines and carrying out auctions for coal mines, which include commercial and captive mines. Supply to the power sector, at about 85% of total dispatches, remains very high and will grow as demand from coal-based TPPs remains high to meet India’s electricity needs. Opening of new mines and rise in production will lock into coal as a fuel source for a long time. Notwithstanding the expected growth in coal production, coal demand is likely to outstrip domestic supply, though the share of imports is likely to substantially reduce over the next couple of years. The gap between domestic demand and supply of thermal coal cannot be bridged as India has very limited reserves of highgrade thermal coal and imported coal blending is required for efficient combustion and reduced ash generation. Besides, thermal coal imports will continue to cater to imported coal-based coastal thermal plants for the entire economic life of these plants. India’s socio-economic dependence on coal is extremely high (also see chapter 3). Several states are extremely dependent on coal, particularly 6 states covering 33 districts of the 284 coal-dependent districts as estimated by a study (Pai, 2021). A study finds that more than 3.6 million people are either directly or indirectly employed in the coal mining and power sectors in 159 districts in India. Of the 3.6 million people, nearly 80% of the jobs are linked to coal mining located across 51 districts, while the rest of the jobs are linked to coal power plants (Aggarwal, 2021). Coal is a source of huge revenue for the States and Centre through taxes, royalties, District Mineral Foundation (DMF) funds and Corporate Social Responsibility (CSR) funds. Most of the States having large coal resources are economically disadvantaged and underdeveloped, making them extremely vulnerable to the revenues from the mining sector and dependent for creation of livelihood and infrastructure both physical and social. Further, Indian Railways (IRs), which is one of the largest employers in the country with daily passenger traffic of more than 20 million and an annual freight loading exceeding 1400 million tons, has coal transport making up more than 47% of the IRs freight revenues and has even higher share in its profits (Khan, 2022). Therefore, the importance of coal sector for the socio-economic imperatives and development of the country is well recognised and deeply entrenched. 36 Sambit Basu and Soumya Prakash Nayak Coal Strategy for India’s Decarbonisation Trajectory As discussed earlier, energy transition along a decarbonisation trajectory in India is extremely complex on two counts – (i) balancing the energy trilemma to secure high economic growth and sustainable development with universal energy access at affordable rates and (ii) difficulty of moving away from coal given its abundance, affordability, lockin and deep socio-economic dependence. Transition is mainly about people, technology, finance, and environment and is systemic in nature. While there is no debate that India will stay committed to a sustainable energy transition with characteristic green, clean, and efficient energy use, the key issue is about the pace of this transition defined by the challenges and context discussed earlier. India will continue to push for RE and several emerging clean energy technologies, but the importance of coal in the energy basket is likely to remain significant for another two decades. NITI Aayog and IEA assessed that even around 2035–2040 the overall demand for coal remains strong, although there may be a drop in the share of coal in primary energy supply (Niti Aayog, 2022). A well-planned strategy for coal-based development, particularly over the next two decades, would nudge the economy on a desired sustainable growth path. So, in the transition strategy proposed next, any phase out or phase down in coal is not envisaged both in the short and medium term. Rather, it considers the opening of new coal mines to meet energy and coal demand. Under-construction coal TPPs will come on-stream and existing old inefficient coal TPPs will be renovated, modernised, and receive economic life extension. Although India’s climate commitments could mount pressure on coal TPPs for early retirement, techno-economic considerations and the need for economic growth would dominate decisions. Also, in the long term, there may be significant coal demand for projected adoption of clean coal technologies such as coal gasification, coal liquefaction etc. Further, one has to find ways to equip coal-based and other technologies for maintaining grid balance being threatened by greater penetration of variability in the system and energy demand management and conservation. Figure 2.1 presents a schematic of the coal strategy for India’s decarbonisation trajectory in a phased manner. The immediate requirement is to improve the operational and financial performance of the DISCOMs (see chapter 3). Efforts at reforming the distribution segment of the electricity sector have been continuing for a long time, but despite some improvements in several areas the sector continues to be the weakest link. DISCOMs performance improvement help mitigate the commercial risk and financial position along the entire value chain, as the financial performance of coal TPPs and coal producers ultimately depend on the financial health of DISCOMs. DISCOM initiatives to bring down operational losses and demand management would also have significant implications for electricity and hence coal demand. Besides ensuring resource adequacy, supporting generation companies for renovation, modernisation, efficiency improvement and flexibilisation of plants, and supporting hybridisation of coal TPPs with renewables as well as repurposing of plants, are all linked with the financial and operational situation of the DISCOMs. Considering that 28.87GW of under-construction coal TPPs are likely to be added to a young portfolio of thermal plants over this decade and that the capacity utilisation of the plants will rise significantly with rising demand, it is imperative to ensure that all the new plants are highly efficient, with state-of-the-art emission mitigation equipment, both in situ and end-of-pipe. To this effect, the draft National Electricity Policy 2021 lays down a vision of a financially viable and environmentally sustainable power sector furthering India’s Energy Trilemma and Coal-based Power Generation 37 energy security and providing reliable 24 × 7 power at a reasonable price. Stringent emission norms have been notified by the Ministry of Environment, Forest & Climate Change (MoEFCC) for SO2, NOx, mercury and water, which are required to be achieved within a specified time schedule and have cost implications on the operation/design of coal-based plants. In addition to the equipment cost, they also entail auxiliary electricity consumption. The policy proposes that efforts must be made to meet the compliance norms in the most cost-effective way to minimise cost to the consumers. It further suggests that the regulator should allow this under sections 62 and 63 of the Electricity Act 2003. The draft policy also provides that all future coal-based plants should deploy ultra-super critical less-polluting technologies or other more efficient technology. Indian coal is of very low grade having very high ash content (30–45%), which produces large quantities of fly-ash and bottom ash in coal TPPs, the disposal of which poses an environmental challenge. As coal combustion in TPPs over the short to medium term grows, the need to prioritize utilisation of ash and byproducts of combustion is paramount. The MoEFCC has issued a notification on 31 December 2021 mandating all TPPs to utilise 100% fly-ash in an environmentally friendly manner for making construction material, reclaiming low-lying areas, mine filling, agriculture and wasteland development, etc. While the focus so far is on known areas of commercially viable applications, in the long term more value-added use of emerging applications and technologies would gain importance. Recognizing strong growth in electricity demand, the Ministry of Power (MoP) has recently issued an advisory, through the CEA, asking power generation utilities to not retire coal-fired power plants till 2030, and also ensure availability of units through renovation and modernisation (R&M) activities.21 With appropriate spending on maintenance, R&M and life extension (LE) plants can operate for 35–40 years. This comes Coal Strategy for India’s Decarbonization: A Three Phase Approach ◾Besides continuing with RE, it would be essential to continue with coal-based generation while finding ways to greening the sam e, focus on improving efficiency, accelerate adoption of demand management, energy storage and new clean energy technologies ◾The strategy for India’s decarbonization is based on a three phased approach Short Term •Discom reforms •Coal-based plants under construcon •Rering inefficient plants •R&M life extension •Green Coal –blending with Biomass •Preparing for Just Transion Medium Term •DSM •Flexibilizaon to beer harness RE •Repurposing exisng plants and projects •Mainstreaming BESS and other storage technologies (including hydrogen) Long Term •Carbon Capture and Ulizaon Systems •Coal Gasificaon •Emerging technologies in generaon and storage Figure 2.1 Coal strategy for India’s decarbonisation trajectory in a phased manner. Source: Author’s own. 38 Sambit Basu and Soumya Prakash Nayak close on the heels of an MoP advisory that coal-based power plants older than 25 years should be closed as part of the country’s decarbonisation strategy a few years back and a recent slowdown in RE capacity addition. This was on the basis of plant life assessments that about 58% of the capacity of the 204 GW coal plants in operation are less than a decade old and another 21% of the capacity is 11–20 years old. The remaining 9% of the capacity is about 21–30 years old, 11% is about 31–40 years old, and 2% of the capacity is more than 40 years old.22 It was assessed that about a fifth of the total coal TPPs (mostly sub-critical) capacity could be taken out for decommissioning immediately. However, the recent MoP advisory disallows the previously estimated retirement of about 50–60 GWs coal TPPs over the next eight years and needs to revisit expected retirements of TPPs from 2031 onwards.23 Responding to environmental concerns of coal generation expansion, CEA has issued revised guidelines for R&M to facilitate compliance with environmental norms, facilitate biomass co-firing, lower water consumption, and enhance flexibility in addition to achieving higher efficiency levels, life extension and raising operative capacity. The MOEFCC issued stringent emission norms and notified “Environment (Protection) Amendment Rules, 2015” for thermal power stations on 07.12.2015, the timeline for meeting which has been revised (vide gazette notification dated 31.03.2021, with extensions ending in December 2024) along with compensation for non-compliance. The draft NEP proposes that regulators recognise these costs and allow them to be recovered through tariffs. Greening of coal or co-firing biomass pellets blended with coal in TPPs in the short to medium term has a dual importance of a net reduction of the greenhouse gas (GHG) from coal burning and curtailment of environmental pollution due to burning of crop residue. India has been harnessing biomass-based electricity generation, using diverse feedstock like bagasse, rice husk, straw, cotton stalk, coconut shells, soya husk, coffee waste, jute wastes, groundnut shells, sawdust, etc, and has exceeded the target installed capacity of 10GWs. The MoP, in 2017, notified “Biomass Utilisation for Power Generation through Co-firing in Pulverised Coal Fired Boilers, and this was followed by CEA in 2018 issuing an advisory “Technical Specification for Agro Residue for Agro Biomass based Pellets (Non-torrefied/Torrefied) for Co-firing in Coal Based Thermal Power Plants.” The Government of India (GoI) has made it mandatory for thermal power plants to use a 5% blend ofbiomass pellets andcoal, with a requirement to increase the blend to 7% within two years.The co-firing policy will be in effect for 25 years or till the useful life of the thermal power plant, whichever is earlier. Biomass pellets may have equivalent calorific value to that of Indian coal, based on estimates from the CEA. However, there are presently some challenges that should be addressed. The first challenge is with the bio-pellet supply chain – production, collection, processing, transportation, and storage. Second, the distributed nature of the biomass arising from diverse agro-climatic regions and hydrology, soil, and cropping patterns could be a problem for pelletisation. Third, all types of TPP technology is not compatible with biomass pellet co-firing and the chemical composition of the biomass (with high silica content) may also pose problems requiring TPP R&M to make it suitable. Yet, another challenge is the landed cost of pellets compared to coal prices. Landed cost of bio-pellets (3800 KCal/Kg) is Rs. 7193/MT, while coal (3600KCal/Kg) is Rs. 4560/MT therefore significantly pushing up cost of power.24 The transition away from coal along the decarbonisation trajectory may happen over decades, with some coal mines closing down in the short-to-medium term due to exhaustion of reserves, while others may take a very long time. Similarly, over the medium to long term, once the economy has sufficiently developed and alternate fuel India’s Energy Trilemma and Coal-based Power Generation 39 technologies in the supply basket are large enough to meet the demand requirements, the sufficiently old, inefficient and costly coal TPPs will also be decommissioned. Such closures and decommissioning, whether over short-to-medium term or long term, will impact the livelihood and health of the community, create social disruptions, adversely affect physical and social infrastructure, raise concerns for repurposing the resources to restore environment and ecosystem, and severely impact public finance. Repurposing of retired coal TPPs may have an important role in harnessing emerging energy technologies like production of hydrogen, as the plant site provides for land, water availability, logistics, and connectivity. Workforce can be reskilled, and repurposing could provide an opportunity for harnessing emerging fuels at a reduced cost. A coal TPP could also be used for solar energy development, as the electricity evacuation infrastructure is also present and could be a source for green hydrogen as well. However, the question remains if the country has the necessary preparedness at present to close down coal mines and decommission large-capacity coal TPPs while ensuring a just outcome for the environment, land, labour and all dependent communities. While the transition cannot happen in an ad hoc manner, a comprehensive closure framework is missing. The existing legal and regulatory mechanisms in India dealing with land, labour, environmental, and finance issues are not adequately equipped to address the issues of a coal mine or power plant decommissioning.25 While the transition may take multiple decades, it is imperative to immediately lay down a Just Transition framework and ensure its implementation (also see Appendix 5B). Over the years, with faster and larger deployment of RE capacity, concern for grid instability has increased. Wind energy is largely seasonal and the solar plants peak in the afternoon, but both may not coincide with daily and seasonal system peaks. With massive commitments for RE, mainly solar and wind, made by the government over the coming decades, grid instability will increase unless balancing and ramping requirements are present in the system. Measures that will enable better integration of renewables into the grid include overcoming congestion issues in transmission infrastructure to enable better exchange of RE from surplus region to deficit regions, having resource adequacy for balancing grid instability arising from intermittent nature of RE and co-ordinated scheduling and dispatch at country level in a developed power market. Amongst these, the most important requirement is to have resource adequacy for balancing, which can best be provided by battery and energy storage systems (BESS). Battery systems could be charging during system off-peak and supply energy during peak periods, but commercial viability and uncertainty around its large GW scale adoption remain. Other storage and flexible supply systems, like pumped hydro projects (PSP) – on and off-river, hydro storage system, and open cycle gas plants could also provide the required balancing and ramping privilege to the system having large RE variability. However, the falling share of hydro generation, shortage of domestic gas, and expenses associated with PSP, the existing coal TPPs are required to provide the flexibility of smoothening the load curve. The flexibility of a plant can be broadly characterised by the technical minimum at which the plant can operate, permissible ramp-up and ramp-down rates that define the time taken by the plant to respond to demand, the number of times the plant can be shut down and restarted, and start-up time or time taken by a plant to start from a no-load situation. Measures to achieve these features of flexibilisation typically include procedural changes, equipment retrofits, and/or combinations of both. A TPP must be retrofitted with steam extraction and thermal energy storage that allows for power output adjustment without changing firing rate in a boiler to fulfil the role of flexibilisation. Investments towards this 40 Sambit Basu and Soumya Prakash Nayak should be allowed by the regulator to be recovered through the tariffs and considered a mandatory expense for the development of RE. Finally, in the long run, clean coal technologies (CCTs) and application of coal combustion byproducts, which are being presently researched for bringing them to the level of commercial acceptability, would be available. CCTs reduce the environmental impact of coal power generation by using coal more efficiently or by removing undesirable pollutants after combustion. Coal washing is the most commonly prevalent CCT in India that can reduce CO2 emission by 2–3% using washed coal having 34% ash coal as against unwashed coal with 42% ash content. Cost of washing is offset by reduced cost of transportation for low ash coal, lower plant operation and maintenance cost, and higher power generation efficiency. While different approaches to coal washing is well established, other CCTs include a variety of technologies that reduce air emissions and other pollutants in electricity generation. Efficient coal technologies like ultra-supercritical, advanced ultra-supercritical, integrated gasification combined cycle (IGCC), etc would be gradually introduced for the generation of electricity at commercially acceptable rates with extremely limited emissions. Other CCTs that are being explored for a long time are coal gasification and coal liquefaction at the coal mines to produce cleaner and highly efficient fuels. GoI has put in place the National Coal Gasification Mission with the goal of 100MT coal gasification by 2030. Further, coal gasification technologies are also fast evolving for downstream production of hydrogen and chemicals like methanol, ammonia, etc, and for combined cycle power generation. Possibly the most important CCT from the perspective of coal use in power generation is carbon capture, utilisation, and storage (CCUS) technology. CCUS, if commercially viable, provides immense opportunity for India with large coal reserves to continue to use coal and strategically balance energy trilemma. Carbon capture and storage (CCS) is the process of removing CO2 from industrial processes such as power plants that burn fossil fuels. CO2 can be transported and stored in underground geological formation or the carbon captured can be used as a by-product. Prototypes of emerging applications of by-product coal combustion in power plants include production of zeolites from fly-ash and carbon nano-tubes from carbon capture are being developed to assess commercial viability and applicability. Zeolites find use in detergent, elimination of toxins and carcinogens, removal of water pollutants, catalytic cracking, production of medical oxygen, etc. Carbon nanotubes have immense potential including applications in energy storage and space programmes. Conclusion Energy transition in India, along a decarbonisation trajectory, is fraught with the challenge of ensuring energy security, access, availability, and affordability as the economy has to prioritize its growth and socio-economic development objectives. While India has committed to substantial power generation capacity from non-fossil sources, coal will continue to dominate the energy landscape for multiple decades due to fuel security, reliability, and cost advantage. Besides, the challenges are many for large-scale harnessing of renewable and non-fossil energy sources, even with RE sources that have achieved commercial maturity. In fact, non-fossil sources of energy can be quite dirty if the entire supply chain of these less-polluting energy sources are traced. For many of the RE sources that are extremely material intensive, India has neither the resource control nor processing control over the supply chain. On the contrary, coal supports India’s development agenda sans the India’s Energy Trilemma and Coal-based Power Generation 41 associated damage that pollution from coal production and combustion causes. Further, in India, the socio-economic dependence of community, industry, and government is very deep, and any ad hoc transition away from coal will be economically, socially, and politically disruptive and unjust. Thus, accepting that India has to tread a sustainable and environmentally benign development trajectory, it would be prudent to find ways to use coal to fuel its growth and development in an environmentally less-polluting manner. It is important to recognise that coal is not replacing the less-polluting options like RE, hydro, nuclear, emerging non-fossil sources like hydrogen, etc. Instead, coal is moving towards a low energy use circular economy characterized by reduce, recycle, and repurpose of materials. The role of (greener and cleaner) coal is to coexist with alternate fuel forms, provide support to facilitate greater penetration of VRE, and serve as a bridge energy source to pave the way for more efficient technology options. Sooner, our policymakers accept that coal shall continue to be India’s primary fuel energising its journey towards becoming a developed country, the better it will be to synchronise technology development, direct investments and government expenses, design policies, and plan implementation frameworks. Notes 1 World Energy Outlook 2022 (STEPS Scenario). 2 Power sector at Glance-2012-2022, CEA. 3 CEA; Executive Summary on Power Sector; Ministry of Power; Government of India; November 2022. 4 CEA. Report on Optimal Generation Capacity Mix For FY2029/30. January 2020 5 Garg, Vibhuti; Renewable Energy Investment Surges in India; IEEFA; June 2022; https://ieefa .org /resources /renewable -energy -investment -surges -india (accessed 28-01-2023). 6 Power Foundation of India and BloombergNEF, Financing India’s 2030 Renwables Ambition, June 2022 7 SECI and NVVN being mandated to act as Bid Process Coordinator to carry out the e-reverse bidding. 8 Compilation of discovered price through competitive bidding. Various sources 9 https://asian -power .com /power -utility /in -focus /solar -module -prices -surged -35 -amidst -inflated -costs -raw -materials ; accessed on 15-12-2022. 10 https://mercomindia .com /bcd -favor -solar -manufacturers/; accessed on 15-12-2022. 11 To illustrate, even with the most determined, deliberate, and costly shift achieved through Germany’s Energiewende the shift away from fossil fuels was an average decline of 0.3%/year. In 2000, when Energiewende began, Germany derived 83.7% of primary energy from fossil fuels that in 2015 was 79.4%. 12 CEA, Broad Status Report of Under Construction Thermal Power Projects, November 2022. 13 CEA, Growth of Electricity Sector in India from 1947-2022, June 2022 14 https://www .iea .org /data -and -statistics /charts /average -age -of -existing -coal -power -plants -in -selected -regions -in -2020; accessed on 16-01-2023. 15 Assuming Rs. 4 Crore/MW. 16 Recently, global coal prices have been on an upward trajectory due to geopolitical tensions, which have caused significant price fluctuations. 17 https://www .bp .com /content /dam /bp /business -sites /en /global /corporate /pdfs /energy -economics /energy -outlook /bp -energy -outlook -2019 .pdf (accessed on 28-01-2023) 18 MTOE: Million Tons of Oil Equivalent. 19 https://coal .gov .in /sites /default /files /2021 -01 /coal -demand -projections20052022 .pdf (Accessed on 21 November 2022). 20 https://www .livemint .com /industry /energy /indias -coal -production -to -touch -900 -million -tonne -this -fiscal -report -11671701931819 .html; accessed on 16-01-2023. 21 https://www .reuters .com /business /energy /india -asks -utilities -not -retire -coal -fired -power -plants -till -2030 -notice -2023 -01 -30/. 48 Tirthankar Mandal Disconnect between State and Centre Priorities: Physical Capacity Addition of RE Between 2010 and 2014, growth in the use of solar energy was 10%, which accelerated to 17% (Shetty 2021) between 2016 and 2020 and then further to 22% by 20223. While these absolute growth rates are impressive, the challenge lies in how they have been achieved. There are seven or eight states in India which have the maximum solar resources. The MNRE has allocated targets for each state to meet India’s goal of achieving a capacity of 175 GW of RE by 2022, without consultations with respective state governments. Moreover, many state governments had their own policies with regard to solar energy independent of the MNRE allocations. Table 3.1 provides a comparison of targets allocated by the MNRE with the goals for capacity addition adopted by the respective RE resource-rich states. One of the reasons for such divergence in targets was competing priorities between the centre and the states. A 2018 news article stated that the requirement from West Bengal to install 5 GW of solar power by 2022 to be aligned with the national target was rejected officially by the CM, citing issues with the availability of land (Majumdar 2018). In other solar resource-poor states, the target set by the MNRE simply did not make economic sense to pursue, and it was easier to purchase RE from available sources using existing mechanisms (NITI Aayog; PWC, Deloitte 2017). Policies at Cross-Roads Between the announcement of the target of 175 GW of RE by 2022 by the central government in 2014 and 2020, almost all states in India came up with their own RE or solar policies, demonstrating a political alignment towards RE adoption, driven by falling prices of solar generation. Favourable import policies, 100% FDI in solar industries development in India and other such measures ensured that large volumes of solar capacities were added. However, the distribution side, which was mainly controlled by state agencies, saw inconsistencies. The central government’s “open access” rules, such as Feed-in-Tariff, Net-metering, and Must-run for higher RE uptake, were seen by the DISCOMs as hindrances to their own revenue generation. Therefore, they kept on increasing cross-subsidy surcharges, banking charges, and open-access charges for RE consumers, as the larger issue of the financial health of DISCOMs (interlinked with higher RE procurement) was not addressed by the centre. It was left to the state governments to address the situation. Schemes like UDAY were Table 3.1 Central allocation vis-à-vis state goals on solar in the context of 175 GW In MW Target set by MNRE State policy-based target Maharashtra 22,000 7,000 Gujarat 17,000 6,672 Karnataka 15,000 7,400 Rajasthan 14,000 6,200 Andhra Pradesh 14,000 6,000 Madhya Pradesh 12,000 3,600 Telangana 6,500 1,500 Source: https://www .niti .gov .in /sites /default /files /energy /Executive -Summary .pdf Energy Transition and Centre–State Priorities 49 floated time and again, almost as a knee-jerk reaction, rather than a structured and systematic approach to address DISCOMs problems with managing finances. In addition, there is a need to rethink policies such as Feed-in-Tariff, Net-metering, Must-run etc. in light of RE prices having fallen enough to be at par with that of conventional fuels. An active central role in this regard could have created a situation wherein the financial health and RE uptake could be simultaneously addressed for the troubled DISCOMs. It is to be noted here that even though the state government did not control the DISCOMs directly, they were responsible for appointing the DISCOMs officers. The Regulatory Commissions passing orders for raising tariffs and surcharges were also part of the state government machinery. It is not surprising then to expect that the DISCOMS would follow the lead of the state energy departments and state political interests. Thus, we see that Maharashtra has the highest open-access surcharge, and other RE resource-rich states, such as Karnataka, Andhra Pradesh, and Telangana have also issued open-access surcharges which work as disincentives to consumers opting forRE. At the central government level, there was a push for rooftop solar through the Rooftop Solar Phase II programme, where DISCOMs are the nodal agencies for implementation. With generation prices of new RE falling and the growth of rooftop solar, the DISCOMs had to make way for consumers who opted for net-metering opportunities. Implementation of such schemes is fraught with challenges such as paying back the customers and balancing the grid. No surprise then that the DISCOMs resorted to delaying tactics for giving permissions and installing metres, although that may not be the only reason that the adoption of rooftop solar has not grown. According to the existing rules, the DISCOMs have to pay penalties for deviation, which could (theoretically) happen due to more and more RE getting injected into the system (CERC INDIA 2022). However, while there is no clarity around how these penalties would be adjusted against incurred costs by the DISCOMs, the regulators do not allow them to pass the costs on to the consumers. There could have been further growth had there been consumer-centric distributed RE policies put in place. Evolution in Decision Making: Role of States and Central Government As already discussed, during the decades of development prior to RE, the central government controlled the generation and transmission side of the system, while the state governments managed distribution (Swain, Dubash and Bhatia 2019). In this framework, the growth of the sector was co-terminus with gigantism – big dams, ultra-mega thermal power plants, and multi-crore investments, all driven by the central government. The state governments, on their part, put emphasis on grid expansion, sometimes at the cost of the state exchequer (Kale 2014). These trends changed with the rapid growth of RE in recent years, with state governments now involved in generation also, as evident from the recent declarations on the state solar targets. The functions of institutions in the power sector are also being “re-imagined.” In the recent past, the NTPC started big solar project investments (Mint 2021). New institutions were formed like the Solar Energy Corporation of India (SECI) to deal with the tendering process and bidding of solar energy projects. Older institutions, like the DISCOMs, were made the nodal agencies for the promotion of solar schemes (MNRE 2020), in addition to their roles in procuring and distributing power. These changes impact the balance between the states and the centre in power sector policymaking. 50 Tirthankar Mandal Attempts to Squeeze the Space for States on Electricity-Related Decision Making One of the most important challenges of the concurrent nature of policymaking in the power sector is maintaining the balance between the central government and the states. However, the rapid growth of RE has affected this to some extent. The Electricity Amendment Bill 2022 (Bill) introduced in the Parliament recently is a case in point. It has suggested some fundamental changes, which experts believe will alter the balance of power between the centre and the state. First, the Bill suggests the introduction of a DISCOM franchise model across states. This will replace the current models and will allow customers to choose their DISCOMs, in effect introducing competition for distribution. This is despite past experience where the idea of introducing multiple DISCOMs has not succeeded in Uttar Pradesh, Bihar, and Madhya Pradesh. In Odisha, the notion succeeded only in 2020 on the third attempt. Further, it proposes a centrally administered body which will appoint regulators for the State Electricity Regulatory Commissions (SERC) across the country. These would curtail the decision-making power of the state as it would not be able to nominate the SERC members independently. The SERC would then give primacy to issues promoted by the central government rather than their states. Second, under the Bill, the National Load Despatch Centre (NLDC) is being envisaged as a body to schedule power allocation to the states based on payments. While this was a well-meaning attempt to solve the issue of long-standing dues from the DISCOMs to the generators, this arrangement is likely to cause unequal distribution of power. Financially rich states will get power at their time of need, while financially poor states would be likely to fall into the trap of indebtedness. With this indebtedness, their autonomy to schedule and buy power from the market will be seriously constrained. Thirdly, while the cross-subsidised consumers will remain under the governmentowned DISCOMs and the cross-subsidising consumers (industry and commercial) will be part of the private DISCOMs. This will inevitably pave the way for structural change in the DISCOMs and invite tariff-related alterations. Since the extant Fiscal Responsibility and Budget Management Act will ensure that subsidies for state governments don’t increase, the space for financial autonomy is further restricted for the state governments, who would have to foot the bill for the consumers under government DISCOMs. Attempts to Reshape Decision-making in Power Sector Apart from the Electricity Bill 2022, there has been a constant attempt to tinker with the balance of power vis-à-vis state-level electricity entities. The Energy Conservation Act 2022 (amended recently) proposes a reduced number of state government representatives vis-à-vis share of representatives from the central government. In such situations, it becomes easier for the centre to push future directives whereas states might see this as a problem from their perspective. The Act also proposes that a carbon credit mechanism will be established by the Central Government, to reap the benefits of domestic markets for emission reductions. While there are several ways to establish such mechanisms, the Act remains silent on what these could be and is aimed to create a single mechanism for carbon credit markets in the future. This potentially limits the state governments to take independent decisions on which market mechanism to follow (Munjal 2022) based on their own contexts and priorities. Energy Transition and Centre–State Priorities 51 The attempt is to centralise the decision-making is evident in the Electricity Bill 2022 and the Energy Conservation Act 2022 with a view to enhancing energy efficiency and conservation. It appears that in the electricity sector, the bigger and more formidable long-term impactful decisions taken at the central level in recent times often have sidelined and/or overlooked (some might say encroached) the states’ domain of decision-making. Therefore, not only is there a change in the technology of generation of electricity, from fossil fuel to RE-based resources, but simultaneously, the structures of concurrent policymaking are also being tinkered with. Existing concerns such as DISCOM finances, stability of these DISCOMs vis-à-vis fiscal deficit of states, tariffs etc. will be exacerbated with a higher uptake of RE, which is why any reforms must be backed by states’ context and that of the region as well (Dubash and Rajan 2001) (Dubash, Kale and Bharvirkar 2018). The current trend to trespass the decision-making domain of the states would lead to further weakening of the management of the sector, rather than addressing the extant systemic issues. Conclusion Recent developments around RE have disrupted the power sector in India – physically, structurally, and institutionally. The de facto and de jure alteration of centre–state relationships that existed over the years are built on a narrative of ushering in efficiency and effectiveness in the power sector while maintaining the fundamental objectives of the sector to improve accessibility and affordability. These changes, which were gradual earlier, are now accelerating at the same pace as the falling prices of RE generation in the country. However, there are inflexion points observed during this period, in the overall policies of the government, which forces us to consider the original balance of decision-making powers between the state and the centre. We demonstrated that from the standpoint of the states, the shifts that have been made in the policies to adopt RE and scale it up were less than optimal. The huge subsidy burden arising out of the agriculture sector and the DISCOMs’ financial loss are the largest sources of inefficiency in the electricity sector. The approach of the Central government to take charge of DISCOMs’ operations and decision-making, as if that were the root-cause of inefficiency may be flawed. The issues are deeper and more complex. Neither the centre, nor the state governments, acting alone, can solve them. Even after the reforms and proposed amendments, the concerns related to the agriculture subsidy remain. While the centre could have provided and set basic principles for assessment, it chose the current technical initiative of segregating the feeders, but this mechanism is also prone to political influence. In addition, policy measures around making India’s energy mix more sustainable must be updated to recognise the current generation costs of RE and take into account that they are on a declining trend. More pragmatic policies will create options for DISCOMs to balance the issues like high-cost old RE-based PPAs and newer RE which are low cost to bundle. There is also a need to design policies for retiring inefficient and old thermal power plants which continue to operate due to PPAs obligations. The social contract of the power sector in India, that is, providing affordable power to the residential and agriculture sector while making power accessible to industry, and commerce is adversely affected as we strive purely for efficiency and bringing more RE into the energy mix. Due to the distributed nature of RE, the narrative has been that cross-subsidy has been a disincentive for industrial and commercial consumers, and they 52 Tirthankar Mandal choose to migrate out of the grid, thereby making the grid economically unsustainable. Instead, the distributed and low-cost nature of RE must be harnessed to meet the needs of the residential and agriculture sector, and the central government, together with the states, could design policies to utilise this avenue effectively. At present the implementation plan for the overarching political and economic goal to decarbonise is too centralised. The importance of using the plurality and diversity of states in this journey cannot be emphasised enough. While the role of the centre is paramount, the state governments should not be left out of the process of planning and strategic thinking. Including them could have a multiplier effect in meeting the overarching goals that the country has set for itself. Notes 1 The data support in this chapter has been provided by Abhinav Sharma who was recently awarded his Phd from IIT Bombay 2 A maximum of eight to nine states have high solar potential, meeting over 90% of the total solar installed capacity in the country currently, and three to four states in the country meet most of the wind potential. Distribution of RE resources in India is highly skewed. 3 IEA, World Renewables and Waste Energy Supply, April 18, 2023, Paris, retrieved from https:// www .iea .org /data -and -statistics /data -product /renewables -information References Agarwal, Dhruvak, Harsha V Rao, and Disha Agarwal. 2022. How Can DISCOMs Optimise Power Procurement Cost? The Case for Delhi to Exit the Power Purchase Agreement with NTPC Dadri Stage-I. New Delhi: CEEW. CERC India. 2022. Central Electricity Regulatory Commission. New Delhi, March. Dubash, Navroz K, and Sudhir Chella Rajan. 2001. Politics of Power Sector Reforms in India. Washington DC: World Resources Institute. Dubash, Navroz K, Sunila S Kale, and Ranjit Bharvirkar. 2018. “Mapping Power in Comparitive State Context.” In Mapping Power: The Political Economy of Electricity in India’s States, by Navroz K Dubash, Sunila S Kale, and Ranjit Bharvirkar. New Delhi: Oxford University Press. Gambhir, Ashwin, and Shantanu Dixit. 2018. Powering Agriculture via Solar Feeders. Hindu businessline, December 20. https://www .the hind ubus inessline .com /opinion /powering -agriculture -via -solar -feeders /article25791629 .ece Kale, Sunila S. 2014. Electrifying India: Regional Political Economies of Development. Stanford: Stanford University Press. Khanna, Ashish, Daljit Singh, Mudit Narain, and Ashwini K Swain. 2015. Transforming Electricity Governance in India: Has India’s Power Sector Regulations Enabled Consumers’ Power? Policy Research Working Paper No. 7275, World Bank, Washington, DC http://hdl .handle .net /10986 /22009 License: CC BY 3.0 IGO.” Majumdar, Arkomoy Dutta. 2018. “Bengal Govt Won’t Chase Centre’s 2022 Solar Target.” Mint, July 8. Mint. 2021. NTPC wins 1.9 GW solar power project contract, September 26. Accessed December 5, 2022. https://www .livemint .com /companies /news /ntpc -wins -1 -9 -gw -solar -power -project -contract -11632652298331 .html. MNRE. 2020. Ministry of New and Renewable Energy. New Delhi, January 30. Munjal, Diksha. 2022. The Hindu. December 18. Accessed January 13, 2023. https://www .thehindu .com /news /national /explained -what -are -carbon -markets -and -how -do -they -operate / article66260084 .ece. Narayan, Subhash. 2019. “Govt Devises Warehousing to Restructure Power Sector NPAs.” Financial Chronicle, February 5. Energy Transition and Centre–State Priorities 53 NITI Aayog, PWC, Deloitte. 2017. State Renewable Energy Capacity Addition Roadmap. New Delhi: NITI Aayog. Ramanathan, A R. 2001. “Rationalising Electricity Tariffs.” Economic and Political Weekly 1508–1510. Ramesh, M. 2022. Solarisation of Agriculture through Feeder Separation. Hindu businessline, September 8. https://www .the hind ubus inessline .com /specials /clean -tech /solarisation -of -agriculture -through -feeder -separation /article62199010 .ece Regy, Prashanth, Rakesh Sarwal, Clay Stragner, Garrett Fitzgerald, Jagabanta Ningthoujam, Arjun Gupta, and Nuvodita Singh. 2021. Turning Around the Power Distribution Sector: Learnings and Best Practices from Reforms. New Delhi: NITI Aayog; RMI. Shetty, Sangeeta. 2021. “India’s Solar Energy Market Outlook 2022.” Solar Quarter, December. Smith, Thomas B. 1993. “India’s Electric Power Crisis: Why Do the Lights Go Out?” Asian Survey Vol. 33(4), 376–392. Srinivasan, Ganesh. 2022. A Narrative of the Indian Power Sector since Independence. ET-Energyworld, August 16. https:/ /energy .economictimes .indiatimes .com /news /power /opinion -a -narrative -of -the -indian -power -sector -since -ind ependence /93580873 Swain, Ashwini, Navroz K Dubash, and Path Bhatia. 2019. “The Disruptive Politics of Renewable Energy.” The India Forum, May 22. Tongia, Rahul. 2003. The Political Economy of Indian Power Sector Reforms. Program on Energy and Sustainable Development, Working Paper #4, Center for Environmental Science and Policy, Stanford Institute for International Studies, Stanford University, Stanford, CA. https:/ /pesd .fsi .stanford .edu /publications /political _economy _of _indian _power _secto r _reforms _the 4 Introduction The IPCC has recommended phasing out coal-based power plants, hence transitioning away from coal. The implications of the coal transition will be different for different countries. The importance of coal in the Indian economy is undeniable – it supplies 44% of India’s primary energy demand (which is up from 33% in 2000) (IEA, 2021). India accounts for 7.1% of total emissions and has 17.7% of the global population. The per capita emissions of the country stand at 2.47 TCO2e compared to the global average of 6.45 TCO2e (Joshi and Mukhopadhyay, 2022). Emissions from coal have risen from 500 MT in 2005 to 1000 MT in 2015. The share of coal in the energy mix has not changed since 2015, but India has added 58 GW of coal thermal capacity between 2015 and 2019 (compared to 49 GW for solar and wind) (IEA, 2021). Not only is coal an important sector of industrial activity, but it is also used as primary energy in many industries. Many livelihoods are directly and indirectly associated with coal. Coal is also linked to regional development and contributes to the build-up of transport infrastructure (particularly railways) historically. This chapter links with the other chapters in the volume, for example, Chapter 3 by Mandal on centre–state priorities and alignment of policies and several other chapters (also see chapters 5 and 10) that address Just Transition. The chapter is organised in the following manner: in Section 2, we discuss the macroeconomics of the coal transition in the Indian context with a focus on some key macroeconomic variables like GDP, revenue, resources, and livelihood. Section 3 discusses the importance of coal for the Indian industry. The spatial dimension of the coal transition is discussed in Section 4. In Section 5, we briefly discuss the costs of phasing out coal and bringing in renewables and Section 6 concludes. Section 2: Macroeconomic Implications of Coal Transition Table 4.1 provides a snapshot of the importance of coal for India, in terms of production, consumption, reserves, and imports. As is evident from the table, in terms of production and consumption, India ranks second in the world. In terms of coal reserves, it is fifth in the world. Despite this, India needs to import coal (mainly non-coking coal). We discuss this below. Electricity generation from coal power plants stood at 71.3% of total generation in 2019–2020. Coal accounts for 55% of the country’s energy needs (Economic Survey 2020–2021). Many of the sectors of the Indian economy, directly or indirectly, are dependent on coal (Deshmane, 2021). 4 Macroeconomic Impacts of Coal Transition Saon Ray, Piyali Majumder, and VasundharaThakur This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-6 10.4324/9781003433088-6 Macroeconomic Impacts of Coal Transition 55 Macroeconomic Impacts of Coal Transition GDP The importance of mining and coal to the Indian economy is undeniable. The contribution of coal and lignite is 0.7%. All India’s coal production in the year 2021–2022 registered a growth of 8.6% compared to the level of production in the year 2020–2021. Coal production increased to 778.19 million tonnes (MT) in 2021–2022 from 716.08 MT in the year 2020–2021. Over the last ten years, coal rents (the difference between the value of both hard and soft coal production at world prices and their total costs of production) contributed on average 0.9% of India’s total Gross Domestic Product (GDP) indicating its importance in the economy. This is shown in Figure 4.1. Revenue India’s coal dependence is also reflected in the fiscal aspect with coal being a source of government revenues (taxes and royalties) (Deshmane, 2021). Coal India Ltd. (CIL) produces 83% of coal in the country (Ministry of Coal (2020) Annual Report 2019–2020). CIL accounted for 80% (622.63 MT) of the total coal production in India in the year 2021–2022. Singareni Collieries Company Limited (SCCL) is one of the major sources of coal in the southern region of the country accounting for 50.6 MT of coal production in the year 2021–2022. Other companies like TISCO, IISCO, and DVC are contributing very small quantities to the total production of coal in India. For Indian Railways, coal constitutes 44% of its freight revenue. 87% of coal is transported by the Indian Railways (Tongia and Gross, 2019). Table 4.1 Coal statistics Parameter Value Rank in the world Share in world Coal production 728.7 MT (in 2018-19) 2nd 9.5% (in 2017) Coal consumption 968 MT (in 2018-19) 2nd Coal reserves 326.5 billion tonnes 5th Coal imports 235.2 MT (in 2018-19) Coal-fired power plants 208 GW 3rd 10% Source: Compiled by Authors from various sources. Note: Coal production data from IEA 2021. Coal share percent and coal reserves from Indian Bureau of Mines (2019) Indian Minerals Yearbook, Coal and Lignite. Coal consumption data from https://www .carbonbrief .org /the -carbon -brief -profile -india. Coal imports data is from Bhushan et al. (2020) Just Transition in India. Data on coal-fired power plants are from the Ministry of Power (2021). Data on the share of coal-fired power plants are from https://endcoal .org /global -coal -plant -tracker/ Table 4.2 Emissions from coal for India Emissions (total) Emissions (per capita) 2.47 tonnes of CO2 equivalent 7.1% Source: Compiled by Authors from various sources. Note: Data for emissions and data from emissions per capita from IEA (2021). 56 Saon Ray, Piyali Majumder, and Vasundhara Thakur Bhandari and Dwivedi (2022) document that there are 16 taxes (combining Central and State levels) that are imposed on coal. These include excise duty, clean energy cess, royalty, and contribution to the district mineral fund (DMinF). Coal mining royalties are 14% of the basic price, while the National Mining Exploration Tax (NMET), which is charged for funding exploration by state governments, is 2% of the royalty. The payment to the government from CIL in 2020–2021 included Rs. 96.9 billion as royalty, Rs. 29.9 billion as DMinF, and Rs. 2.1 billion as NMET. The total was Rs. 419.9 billion including Rs. 225.1 as GST compensation cess. Reserves Data on total assessed geological coal resources as on 01.04.2021 is 352,125.97 million tonnes (Ministry of Coal, 2022). India has the fifth-largest coal reserves in the world after the United States of America, Russia, Australia, and China. Imports India is one of the largest importers of coal in the world. Indonesia, Australia, and South Africa constituted 34%, 31%, and 12% of the total import of coal into India in the year 2021–2022, respectively. Despite increased domestic production, coal power plants and iron and steel manufacturing companies in India are also engaged in the import of coal largely from Indonesia, South Africa, and Australia (Powell et al., 2022). India’s import of coal has declined by 10.8% over the last three years i.e., 234.35 MT in 2018–2019 to 208.93 MT in 2021–2022. Non-coking coal constitutes the bulk, approximately 70% of the total coal imported into India. Imported high-quality coal is majorly used for industrial uses. In 2018–2019, according to the annual survey of 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 0 100 200 300 400 500 600 700 800 2017-18 2018-19 2019-20 2020-21 COAL RENT (% OF GDP) DOMESTIC PRODUCTION AND IMPORT (IN MILLION TONNES) YEAR Domestic Production, Import and Coal Rent Total Domesc Producon Total Coal Import Coal Rent (%GDP) Figure 4.1 Domestic production, import, and coal rent from 2017–2018 to 2020–2021. Domestic Production and Import data from Ministry of Coal. Coal Rent (%GDP) data. Source: World Development Indicators (WDI). Macroeconomic Impacts of Coal Transition 57 industries data, the intensity of use of imported coal is found to be high in chemical products manufacturing and manufacturing of coke oven products. Primary Energy Needs Coal is the most easily available and affordable source of energy in India accounting for 55% of the total energy demand. Transitioning away from coal will have implications for the economy. Coal is used as a fuel in industry and other sectors. Despite the growth in renewables, coal dominates India’s power generation mix, and will account for a large proportion of power sector emissions even by 2040 (IEA Data Services). According to projections, renewable energy consumption can surge from nearly 20 Mtoe in 2019 to nearly 300 Mtoe by 2040 but will be concentrated mainly in the power sector and driven by growth in solar capacity (BP, 2022). Livelihoods There are also implications for livelihoods and jobs as we transition away from coal. Fifteen million people are directly or indirectly employed in this sector. The coal sector directly accounts for the employment of 1.2 million workers in India (Pai and Zerriffi, 2021). Further, the impact falls disproportionately on the most vulnerable members of the workforce as is illustrated in the Appendix 4B on the Kota Super Thermal Power Station. Given the dependency of the Indian economy on coal, phasing out coal and transitioning to alternative/renewable energy sources for affordable power generation and its use in various other processes, thereby sustaining livelihoods for all is a herculean task for the policymakers. Especially, the major coal-producing states – Jharkhand, Chhattisgarh, and Odisha – may find it challenging to implement the structural change and generate jobs in the alternative sectors. Regional Development Coal is also linked to regional development and contributed to the build-up of transport infrastructure (particularly railways) historically (O Rourke and Williamson, 2001). The regional and spatial dimensions of the importance of coal have been documented (e.g. for Britain by Turnbull (1987) and also regions like Pennsylvania by Latzko (2011)). Emissions Coal-based power plants are one of the major contributors to the rising concentration of PM 2.5 in the air and the emission of other harmful gases into the atmosphere. Global coal use continued rising for the second consecutive year in 2018 with China, India, Indonesia, and some other South and Southeast Asian countries, as the main consumers. While India contributes to 7.1% of total emissions globally, in per capita terms India contributes far less than most major developed countries. According to the International Energy Agency (IEA), currently, India’s per capita emissions are 1.6 tonnes of CO2, much lower than the global average of 4.4 tonnes and India’s share of global total CO2 emissions is only 6.4%. In the mid-1990s, India’s carbon intensity of consumption had surpassed that of China and was about one-third higher than China’s by 2005 (Birdsall and Subramanian, 2009). India’s coal consumption is also expected to grow at a faster rate than Chinese coal consumption between 64 Saon Ray, Piyali Majumder, and Vasundhara Thakur as depicted in Figure 4.4f. Contrastingly, it is evident from Figure 4.4e) that renewable energy sources are dispersed across the state. Renewable energy sources (including solar, hydro, biomass, and waste-to-energy) constitute 3% of the total installed energy capacity in Chhattisgarh. Biomass power plants have the potential of reducing CO2 and presently there are 13 such plants in Chhattisgarh with a total installed capacity of 274 MW. The Chhattisgarh State Renewable Energy Development Agency (CREDA) has allowed for the exemption of electricity duty to the solar power-generating plants for auxiliary consumption or captive consumption within the state till the year 2027. Moreover, as a part of the Solar Policy, it has been emphasised that along with facilitating the installation of solar power projects through single window clearance, improving road connectivity, and creating the land bank, the state government will also be engaged in the development of human resources through institutional Sahibganj Kodarma Godda Pakur Giridih Palamu Chatra Hazaribagh Devghar Dumka Jamtara Dhanbad Latehar Lohardaga Garhwa Ranchi Bokaro Ramgarh Gumla Khunti Pashchimi Singhbhum Saraikela Kharsawan Simdega Purbi Singhbhum Coal Power Plants Biomass Power plants Small Hydro Power plants Solar Power Plants Captive coal Mines Underground Mines Open Cast Mines Mixed Mines (f) Figure 4.4 f Distribution of coal mines. Source: Energy map, Niti Aayog. Macroeconomic Impacts of Coal Transition 65 training for the alternative energy adaptation. The detailed district-wise installed capacity of renewable energy sources is depicted in Table 4.A.2 of the Appendix of the Chapter. Financing the Coal Transition “By 2025, 78 percent of coal plants globally will be more expensive to operate than building new renewable energy with storage” (Grbusic et al., 2019). This observation is further supported by the waning viability of coal plants (Grbusic et al., 2019; Wang et al., 2022). While there are push factors for the transition such as the declining viability of coal plants, there are also pull factors for transition. These pull factors are the ones making the transition attractive. One of these pull factors is the net gain to be reaped as a result of the transition. Adrian et al. (2022) estimate the costs of implementing this transition and they find a net gain resulting from this transition. Their estimates peg a net gain of around $78 trillion due to phasing out coal. Calhoun et al. (2021) underscore five principles for designing financing mechanisms for avoiding the risk of using finance for financing the coal transition. These five principles are as follows: “Just and equitable; Additional; Managed; Transformational; Scalable.” Sharan and Saran (2021) note finance as the key factor for facilitating the transition away from coal and moving towards green sectors for India. Singh and Sharma (2021) estimate the cost of decommissioning 130 power plants accounting for 95 GW of installed capacity. They use tariff orders of individual plants to calculate the costs of decommissioning. The costs are estimated to be between Rs. 2.31 lakh crores to Rs. 3.50 lakh crore, while the pay-out to workers is estimated at Rs. 57,490 crores. Coal subsidies were at Rs. 150 billion in 2020. Coal has been brought under the ambit of 5% GST plus a compensation cess of Rs. 400 (Bhandari and Dwivedi, 2022). Conclusion India has announced its intention to decarbonise its economy and become net zero by 2070. Given the importance of coal in India’s energy mix, the macroeconomic implications of decarbonisation will be enormous. The objective of this chapter was to examine the implications of this transition for India, in terms of broad macroeconomic indicators.India’s possible gains from the transition to a net zero-carbon growth path could be significant. However, there will be direct and indirect impacts of the transition on the economy. Many sectors in India are directly or indirectly connected to coal; these sectors are likely to be affected as well. In this chapter, we examine all such linkages with coal and underline the spillover effect of the transition into other sectors. Also, little attention has been paid to examining the spatial dimension of the transition process across Indian states. The present chapter attempts to study the detailed energy composition of the two major coal-producing states of India viz. Jharkhand and Chhattisgarh. Further, it also tries to identify the potential alternative energy sectors across these two states. As we see from the ensuing discussion, many factors will contribute to the transition of each state – most of these factors are well-known and documented (including the resource base, the topography, or other factors like whether power is surplus or not). Two factors that have to be kept in mind and are not frequently discussed include the linkage of coal in the economy of the state and the political economy of each state. For the former, this chapter has tried to give an overview of the differences between the two states that have been 66 Saon Ray, Piyali Majumder, and Vasundhara Thakur discussed in the paper. More research is needed to extricate the linkages since only then the true impact of the transition can be captured. The political economy factor is beyond the scope of this present chapter, but extant literature can be referred to shed light on this aspect for it will determine the path of the transition in each state. References Adrian, T., Bolton, P., and Kleinnijenhuis, A.M. (2022). How Replacing Coal With Renewable Energy Could Pay For Itself. IMF Blog. How Replacing Coal With Renewable Energy Could Pay For Itself (imf .o rg). Bhandari, L. and Dwivedi, A. (2022). India’s Energy and Fiscal Transition. Task Force on Climate, Development and the International Monetary Fund. Bhushan, C., Banerjee, S., and Agarwal, S. (2020). Just Transition in India: An Enquiry into the Challenges and Opportunities for a Post-coal Future. Sustainable and Advisories Pvt. Ltd., New Delhi. Birdsall, N., and Subramanian, A. (2009). Energy needs and efficiency, not emissions: Re-framing the climate change narrative. Center for Global Development Working Paper 187. BP Statistical Review of World Energy. (2022). https://www .bp .com /content /dam /bp /business -sites /en /global /corporate /pdfs /energy -economics /statistical -review /bp -stats -review -2022 -full -report .pdf Calhoun, K., Chen, P., Einberger, M., Kansal, R., Matsuo, T., and Varadarajan, U. (2021). Financing the Coal Transition. Pragmatic Solutions to Accelerate an Equitable, Clean Energy Future. RMI. Deshmane, A. (2021). How a Just Transition can Make India’s Coal History. Towards Net Zero. BBC. https://www .bbc .com /future /article /20211103 -india -how -a -just -transition -can -make -coal -history. DPIIT. (2022). FDI Factsheet, June 2022. https://dpiit .gov .in /sites /default /files /FDI _Factsheet _June _2022 .pdf. Government of Jharkhand (2022) Jharkhand State Solar Policy 2022. https://www .jreda .com /api / all -uploaded -img /img /6360e972de5e0 .pdf Government of Jharkhand (2015) Jharkhand State Solar Power Policy 2015. https://api .jreda .com /all -uploaded -img /img /6360e845c73c7 .pdf Grbusic, T., Calhoun, K., and Bodnar, P. (2019). Financing the Transition from Coal to Clean Energy. PPCA Insights. IEA. (2021). India Energy Outlook 2021. IEA, Paris. https://www .iea .org /reports /india -energy -outlook -2021 Joshi, S. and Mukhopadhyay, K. (2022). Cleaner the Better: Macro-economic Assessment of Ambitious Decarbonisation Pathways across Indian States. Renewable and Sustainable Energy Transition, 2, 100027. Latzko, D. (2011). Coal Mining and Regional Economic Development in Pennsylvania, 1810– 1980. Economies et Sociétés (Serie ‘Histoire Economique Quantitative’), Association Française de Cliométrie (AFC), issue 44, 1627–1649, September. Ministry of Coal. (2022) Details of Coal Reserves in India, PIB. https://coal .nic .in /sites /default /files /2022 -04 /Pre ssRe leas ePag edet08 .pdf Ministry of Coal (2020) Annual Report 2019–2020. https://coal .gov .in /en /public -information / reports /annual -reports /annual -report -2019 -20 NITI. (2023). Geospatial Energy Maps of India. https://niti .gov .in /edm/. NITI Aayog (2021, October 18), NITI Aayog Launches Geospatial Energy Map of India [Press Release] https://pib .gov .in /PressReleasePage .aspx ?PRID =1764738; https://niti .gov .in /geospatial -energy -map -india Macroeconomic Impacts of Coal Transition 67 Table 4A.1 Jharkhand: District-wise installed capacity of renewable energy-based power plants Installed capacity in MW District Solar Wind Small hydro(<25MW) Biomass Waste to energy Dhanbad 0 0 0 3.1 (2) 0 Ramgarh 0 0 4 (1) 1.2 (1) 0 Ranchi 31.9 (9) 0 0 0 0 Paschimi Singhbhum 3 (1) 0 0 0 0 Note: Numbers in the parentheses indicate the number of plants. Source: https://vedas .sac .gov .in /energymap /view /powergis .jsp Office of Economic Advisor, Government of India (2022, November 22). Press Release Index of Eight Core Industries (Base: 2011–12=100). https://eaindustry .nic .in /eight _core _infra /eight _infra .pdf. O’Rourke, K. and Williamson, J. (2001). Globalization and History: The Evolution of a NineteenthCentury Atlantic Economy. Cambridge, MA: MIT Press. Pai, S., and Zerriffi, H. (2021). A novel dataset for analysing sub-national socioeconomic developments in the Indian coal industry. IOPSciNotes, 2 014001. Powell, L., Sati, A., and Tomar, A.K. (2022). Imported Coal: Source of Energy Security for India? Terra Nova, June 6. https://www .orfonline .org /expert -speak /imported -coal -source -of -energy -security -for -india/#:~ :text =Indonesia %2C %20Australia %2C %20and %20South %20Africa ,percent %20of %20India’s%20coal%20imports. Press Trust of India. (2022). Production from Captive, Commercial Coal Mines Rises 79% in June Quarter. https://www .business -standard .com /article /markets /production -from -captive -commercial -coal -mines -rises -79 -in -june -quarter -122070701035 _1 .html. Ray, S. and Bandyopadhyay, K. (2020). Energy Challenges for India: Transitioning to a Low Carbon Economy. ICRIER Policy Brief no. 1. Ray, S., Majumder, P., Thakur, V., and Patel, A. (2022). A Sectoral View of Conceptualising Macroeconomics of a ‘Just Transition’ in India. Indian Public Policy Review, 3(5)(Sept–Oct), 22–48. Sharan, V. and Saran, S. (2021). India’s Coal Transition: A Market Case for Decarbonisation. ORF Issue Brief No. 505. Observer Research Foundation. Singh, V.P. and Sharma, N. (2021). Mapping Costs for Early Coal Decommissioning in India. New Delhi: Council on Energy, Environment and Water. Steckel, J.C. and Jacob, M. (2021). The Political Economy of Coal: Lessons Learnt from 15 Country Case Studies. World Development Perspectives, 24, 100368. Tongia, R. and Gross, S. (2019). Coal in India: Adjusting to Transition. Brookings India. Paper 7. Turnbull, G. (1987). Canals, Coal and Regional Growth during the Industrial Revolution. The Economic History Review, 40(4), 537–560. Wang, C.N., Yue, M., and Volz, U. (2022). Global Practices for Financing of Early Coal Retirement for Accelerated Green Energy Transition. Green Finance and Development Center at FISF Fudan University, Shanghai and SOAS University of London. Appendix 4A RE Power Installed Capacity in Jharkhand and Chattisgarh 68 Saon Ray, Piyali Majumder, and Vasundhara Thakur Appendix 4B Transition Impact on Workforce: A case study of Kota Super Thermal Power Station (KSTPS) Simran Grover and Naini Swami The Kota Super Thermal Power Station (KSTPS) was established in 1983, with two units of 220 MW capacity each. Owned by Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL), the power station has a current capacity of 1240 MW with seven units in operation. The plant’s average age is 27 years as of March 2022. Units 1, 2, 3, and 4 are past their useful life of 25 years, and they are proposed for decommissioning after December 2022. Over the years, KSTPS has been among the key drivers for the growth of the local economy. The plant creates direct employment and transacts with many associated businesses and service providers. It facilitates a thriving ecosystem of allied livelihoods, such as local transport, real estate, and consumer goods and services, primarily helmed by local small businesses. The power station is deeply integrated with the local economy. This includes full-time employees of RVUNL, contractual employees and labour, service providers, big and small business owners, and various informal workers in the unorganised sector. Table 4A.2 Chhattisgarh: District-wise distribution of renewable energy–based power plants District Solar Wind Small hydro (<25 MW) Biomass Waste to Energy Korba 0.4 (7) 0 7 (1) 0 0 Surajpur 0 0 0 16 (2) 0 Surguja 0.1 (2) 0 24 (2) 0 0 Bilaspur 3.8 (52) 0 1 (1) 18 (2) 0 Raigarh 5.1 (9) 0 0 37 (3) 0 Baloda Bazar 18.9 (3) 0 0 7.5 (1) 0 Janjgir-Champa 0.3 (3) 0 0 49.8 (4) 0 Mungeli 3.8 (52) 0 1 (1) 18 (2) 0 Kabirdham 0.3 (5) 0 0 20 (2) 0 Bemetara 50.2 (3) 0 0 0 0 Durg 87 (44) 0 0 8 (1) 0 Raj Nandgaon 5.7 (16) 0 0 11.5 (2) 0.3 (1) Balod 0 0 0 3 (1) 0 Kanker 0.3 (7) 0 0 0 0 Narainpur 0.1 (2) 0 0 0 0 Bastar 0.4 (7) 0 0 0 0 Bijapur 0.1 (2) 0 0 0 0 Dantewara 0.8 (2) 0 0 0 0 Sukma 0.1 (1) 0 0 0 0 Dhamtari 0.3 (5) 0 11 (3) 8 (1) 0 Gariyaband 0 0 7 (1) 0 0 Mahasamund 37.2 (7) 0 0 16.5 (2) 0 Note: Numbers in the parentheses indicate the number of plants Source: https://vedas .sac .gov .in /energymap /view /powergis .jsp# Macroeconomic Impacts of Coal Transition 69 The aforementioned livelihood landscape encompasses many marginal workers and groups. Understanding their vulnerabilities in the context of energy transition, particularly repurposing (including decommissioning) the thermal units, requires a nuanced understanding of vulnerabilities at the intersection of caste, class, gender, and employment location. KSTPS and Livelihoods Landscape For a qualitative understanding, livelihoods dependent on the plant are classified based on the statutory responsibilities KSTPS bears towards respective individuals or entities. This includes direct livelihoods (permanent and contractual workers), associated livelihoods (entities exchanging goods and services, including the fly-ash brick industry and its wage workers), and allied livelihoods (informal workers and other local businesses that thrive on the economic contribution of KSTPS). In terms of organisational structure concerning direct livelihoods, KSTPS is divided into 15 administrative departments. Officials (the plant's permanent employees) oversee the work carried out by the permanent and contractual workers in their respective departments. Presently, KSTPS has around 656 permanent employees and 2012 contractual workers (Bask Research 2022). With the increase in their numbers over time, the contractual workers also perform tasks previously reserved solely for permanent technical workers. Despite the similar nature of their work, there is a high wage disparity between permanent and contractual workers. There is also considerable heterogeneity among contractual workers based on their wage categories: skilled, semi-skilled, or unskilled. Broadly, the tasks performed by the plant's labour fall into civil, electrical, and mechanical works. Most skilled workers at the plant are engaged in electrical works, whereas primarily semi-skilled and unskilled workers are involved in civil and mechanical works. The Factories Act classifies power generation plants as an industry involving hazardous processes because of the perilous nature of the work involved. However, working conditions and exposure to hazards differ as per the location of workers inside the plant. The plant’s boiler and turbine management sites entail working in proximity to high temperatures and heavy machinery. Loss of life and limb due to accidents is common at such sites. Given the presence of high-voltage power operations, electrical work at the plant is critical, albeit not physically taxing. In contrast, work at the coal handling operations that deploy the highest concentration of unskilled contractual workers is highly strenuous. Workers in the department are continually exposed to coal dust and a poor work environment without adequate cooling facilities. As a result, skin diseases and deterioration (and eventual loss) of eyesight are reported as routine consequences. In the context of the associated livelihoods, the condition of the fly-ash industry workforce is particularly concerning. Prolonged exposure to fly ash is known to increase the risk of asthma, inflammation, respiratory diseases, and cancer. The industry workers report a frequent occurrence of many such health concerns. A majority of the workforce (mostly daily wage labour) in the fly-ash industry is 70 Saon Ray, Piyali Majumder, and Vasundhara Thakur informal, and the sector is unorganised, given the small size of the fly-ash brickmaking units. As a result, safety provisions for workers in the units are poorly implemented or absent, and no social security is provided to cope with the health consequences of their work. Vulnerability of Workforce and Potential Impact of KSTPS Closure India's labour market, shaped by substantial and procedural aspects of labour laws, accords differential employment status to permanent and contractual workers, significantly limiting rights and entitlements for the latter category of workers. Contract workers account for nearly 75% of the workers employed in the thermal power generation sector (Bask Research 2022). This principal section of the workforce is inherently more vulnerable in the context of repurposing of an associated thermal power plant and the potential loss of employment. In general, workforce compositions are diverse, comprising individuals with differentiated skills, capabilities, and socio-economic backgrounds. The legal classification of skilled, semi-skilled, and unskilled workers is a commonly used stratification for the contractual workforce. However, this stratification, which primarily signifies wage difference, doesn’t fully represent the differential capabilities of workers across respective skill groups. A meaningful understanding of the capabilities of workers to deal with employment loss may be gathered by measuring (or mapping) some of the fundamental factors that shape their opportunities and provide tools for resilience against the impact of employment loss. Their capabilities and hence resilience to deal with the stress of livelihood loss in the context may be explored as a function of their inherent capitals, that is, economic, human, social, and political capital. The resulting capabilities and resilience of a worker (and their household) are likely to define their ability to deal with the loss of livelihood, navigate its perils, and ultimately seek opportunities for income substitution. Using the above approach, the table below presents a qualitative mapping of the different forms of capital of the skilled, semi-skilled, and unskilled contractual workforce at KSTPS, along with workers of the associated fly-ash brick industry. The parameters used for evaluating economic capital include current income sources, assets, savings, and credit access. Human capital is evaluated based on educational and professional qualifications, skill level, well-being, and occupation co-relations. Social capital is defined as a function of caste position and related networks, neighbourhood, and community relations. Political capital is evaluated based on the degree and nature of participation in local politics and associations, including engagements through labour unions. A qualitative mapping of capital cross the landscape of particularly vulnerable workers associated with thermal power plants Macroeconomic Impacts of Coal Transition 71 Category of workers Economic capital Human capital Social capital Political capital Skilled (mechanic fitter, electrician, light and heavy vehicle drivers, operators, supervisors) Minimum daily wage of Rs. 283 as specified by GoR. • Better positioned to access opportunities for additional income through other means of livelihood such as small shops, working in other industries. • Indicate a higher degree of asset ownership, including houses and lightweight vehicles. • Insured under the ESI scheme. • EPF deposit serves as the primary saving. • Both formal sources, such as banks and microfinance institutions, and informal sources, such as relatives or colleagues, are utilised to access credit. Typically hold at least matriculation, with most recent recruits holding ITI diplomas. • Conditions of work are harsh with high occupational hazard risk. • Relatively less prolonged and direct exposure to hazardous materials. • Better positioned to receive alternative employment at current wages as skills and experience are ratified through experience certificates. • Provided with required safety gear such as helmets, gloves, and shoes. Includes a mix of persons from different caste backgrounds, including Brahmins, Rajputs, Scheduled Castes, and Other Backward Castes. • Most are locals or migrants from nearby areas such as Kota, Tonk, and Newai. Hence likely to have mature social networks. Members of labour unions, visible and vocal participation in union activities. • As local residents or residents of nearby areas, have some political voice in local decisionmaking. Semi-skilled (Helper, junior fitter, welders, gardeners) • Minimum daily wage of Rs. 271 as specified by GoR. • Access to opportunities for additional income is curtailed due to strenuous work shifts. • Many possess local housing with a high degree of informality in tenure. Some workers possess marginal agricultural land in places of origin. • Insured under the ESI scheme. • EPF deposit serves as the primary saving. • Credit is secured through informal sources such as relatives, neighbours, employers, or colleagues. Express aversion to formal sources of credit. Typically middle school graduates. • Under-recognition of skill level gained through hands-on work experience. • Degree of direct and prolonged exposure to hazardous materials is high, impacting physical and mental well-being. • Access to alternative employment at existing wages is curtailed due to a lack of formal recognition of skills and experience. • Provision of safety gear such as helmets, gloves, and shoes is not adequate and timely. Primarily includes workers belonging to Other Backward Castes and Scheduled Castes. • The majority are locals or migrants from nearby areas such as Tonk, Newai, and Jhalawar and hence, likely have mature social networks. Members of labour unions. However, active and vocal participation is not uniform across the category. • As local residents, may exercise some say in local decisionmaking. However, capacity for active participation is curtailed due to the informal nature of their settlements. (Continued) 72 Saon Ray, Piyali Majumder, and Vasundhara Thakur Category of workers Economic capital Human capital Social capital Political capital Unskilled (labour, cleaning, and sanitation workers) • Minimum daily wage of Rs. 259 as specified by GoR. • Access to opportunities for additional income is significantly reduced due to the physically strenuous work. • Many possess local housing with a high degree of informality in tenure. Few indicate none to marginal agricultural land holding in places of origin. • Insured under the ESI scheme. • EPF deposit serves as the primary saving. • Credit is secured through informal sources such as relatives, neighbours, employers, or colleagues. Express high aversion to formal sources of credit. • Generally comprise primary school graduates. • Perform physically arduous manual labour, including civil construction and maintenance work, as well as cleaning and sanitation work. • Opportunities for professional growth are usually stagnant. • Poorly positioned to gain alternative employment due to highly informal nature of work and limited opportunity to gain skills. • Provision of safety gear such as helmets, gloves, and shoes is not adequate and timely. • The majority belong to Scheduled Castes and Scheduled Tribes, with sanitation and cleaning workers being predominantly Dalits. • Accounts for significant participation of female workforce across the overall livelihood spectrum. • Mainly locals or migrants from nearby areas such as Tonk, Newai, and Jhalawar. Hence likely to have mature social networks. Members of labour unions. Participation in union activities is minimal. • The participation of women is virtually absent. • As local residents, may exercise some say in local decisionmaking. However, capacity for active participation is curtailed due to the informal nature of their settlements. Fly-Ash Brick Industry Workers • Determination of wages for workers is based on productivity (units of bricks produced or loaded/unloaded). (Rs. 180/190) • The majority of workers are migrants and do not possess any local assets. Some indicated small to marginal agricultural land holding in their places of origin. • Not insured under the ESI scheme, limiting access to healthcare. • Not covered under the EPF Act. Formal savings are absent. • Credit is secured through informal sources such as relatives, neighbours, employers, or colleagues. Express high aversion to formal sources of credit. • Majority were primary school graduates. • High and prolonged exposure to hazards at the workplace. • Poorly positioned to gain alternative employment due to highly informal nature of work and limited opportunity to gain skills. • Not provided with required safety gear such as helmets, gloves, shoes or masks. • The majority belong to Scheduled Castes and Dalit communities. • Most are migrant workers from MP, UP, Bihar, and other parts of Rajasthan. As a result, mature local social networks are likely to be absent. Participation in local politics is virtually absent. • Organised workers' associations are absent. Macroeconomic Impacts of Coal Transition 73 The capability and resilience of a worker to deal with the impact of the loss of livelihood is a function of their economic, human, social, and political capital. Similarly, a worker is exposed to intersectional vulnerabilities of caste, class, and gender. The observations surfacing during this qualitative research highlight how intersectionality affects workers of thermal power plants. We argue that interventions for “Just Transition” need to take cognizance and be sensitive towards the intersectional vulnerabilities of TPP workers. The wage and economic differential between the skill-based workforce groups is apparent. The disparity is further aggravated by systemic challenges such as capability reflective skill recognition, ability to pursue additional economic opportunities, and access to finance. Semi-skilled and unskilled workers were observed to be more exposed to hazardous environments and employment-associated risks. This includes exposure to thermal discharge, coal dust, fire, and explosion hazards, etc. Notably, it is primarily the unskilled workers who occupy hazardous locations such coal and ash handling. Such exposure is observed to have long-term detrimental impact on the health and well-being of the concerned workers. For instance, many workers who have spent their lifetime in coal handling complain of degradation of eyesight and blindness. Similarly, workers involved in fly-ash brick industries (allied jobs) are directly exposed to hazardous waste. Both groups of workers reported high instances of skin and respiratory issues, including silicosis. Such employment locations, while being low-paid, carry high long-term risks for the workers and high financial costs associated with chronic health issues. The associated degradation of health and well-being may severely impact their ability to work and sustain themselves. Exploration of the social configuration of worker groups associated with the TPP further highlights their intersectional vulnerabilities. Skilled workforce displays a heterogenous social composition, and includes persons from the General Category, Other Backward Castes, and Scheduled Castes. However, social configuration becomes increasingly homogenous as we move to semi-skilled and unskilled workers. Semi-skilled workers primarily belong to Other Backward Castes and Scheduled Castes; unskilled workers are primarily from Scheduled Castes and Scheduled Tribes. The disadvantages which arise from social position reflect in community support systems and collective vulnerability. Large groups of marginal workers from disadvantaged backgrounds serving the TPP have high collective vulnerability. Consequently, this reduces their resilience to deal with the impact of an event such as decommissioning of a thermal plant because of high exposure at the community level. It may be noted that the vulnerability is being discussed in the context of the spatial coordinates and social composition of the workforce. Furthermore, the ability of workers to voice their challenges and demand safeguards for a Just Transition through policy intervention is a function of their political capital. Observably, political capital drastically diminishes as we move from skilled worker groups to unskilled worker groups. While skilled workers are active and vocal members of labour unions, the participation and engagement among semi-skilled workers are inconsistent. Further, the participation of unskilled workers in union activities is tokenistic and their representation in 80 Vigya Sharma and Julia Loginova the last decade. Despite the second-largest farmland area globally, the outlook for India’s food and water security remains bleak as much of this farmland remains highly vulnerable to climate-induced changes to weather patterns (Kulanthaivelu et al., 2022). India’s perilous climate and poverty/hunger nexus was observed most recently in the Global Food Policy Report (International Food Policy Research Institute, 2022) which highlighted that by 2030, India will have 17 million people facing hunger, the highest globally (Basak, 2022). Despite just under half of India’s working-age population being employed in agriculture, the impact of climate change on the sector is further pushing millions of people out and into urban regions in search of better livelihoods and employment opportunities (Kulanthaivelu et al., 2022). These decisions exacerbate resource pressures on cities, leading to a cyclical process of displacement and disadvantage. Energy remains central to this conversation on urbanisation and rising energy demand. Interruptions to affordable and reliable energy supply threaten to reverse much of the socio-economic progress achieved amongst the urban middle class. iii) A fast-emerging economic powerhouse Harvard University’s Growth Lab recently declared India (alongside China, Uganda, Vietnam, and Indonesia) as one of the fastest-growing economies by 2030 (Centre for International Development at Harvard University, 2022). It has already overtaken the UK as the fifth largest economy, driven by significant consumer demand – a sign of its expanding middle class and consequent demand for energy (Farrer, 2022). The Indian government has a vision to capitalise on this outlook through its “Make in India” ambition and become a world-leading design and manufacturing hub. India’s rich demographic dividend further supports its potential to become a strong economy. Over the next two decades, India will have its highest workingage ratio ever with a fifth of the world’s youth population already in India (MoSPI, 2017). The potential to harness this dividend is contingent upon ongoing investments in health, education, female workforce participation rate, skills and vocational training, and long-term reforms to build its human capital. A secure supply of energy is fundamental to achieving positive outcomes in many of these areas. Equally, there is scope to design smart, forward-looking policies that invest in areas where future growth and jobs are likely to be as India shifts from a fossil-dependent to a green economy. iv) A history of socio-economic disadvantage and marginalisation Nearly 50 million people are expected to be living below the poverty line in India by 2040. While advances have been made across all sustainable development goals, tens of millions of people remain socio-economically marginalised under growing inequity. India also suffers from significant socio-economic disparities across states, with coal-rich states consistently performing poorly on HDI. Out of 36 states and Union Territories (UTs), Odisha (rank 29), Chhattisgarh (rank 32), and Jharkhand (rank 33) are India’s top three coal-producing regions. This inter-state inequity needs to be considered in how India approaches its transition out of fossil fuels. Most recently at COP 27, India’s Environment Minister acknowledged the significance of socio-economic development needs, calling SDGs ‘an overriding priority for the developing world’ (Yadav, 2022). Consider the case of the SDG 7. Over the last decade, India has been able to streamline its energy policies to address energy poverty, defined as the lack of access to affordable, reliable, and secure energy supply. Despite several Indian states The Social Aspects of India’s Energy Transition 81 declaring 100% electrified villages, rural electricity supply lacks reliability, particularly in remote regions. This has, in turn, led to limited opportunities to capitalise on energy access to create productive livelihoods. Similarly, for clean cooking, while LPG access has improved, subsequent uptake and use remain slow and sporadic. SE4ALL suggests although ‘only’ 14 million people in India currently lack access to electricity, this merely points to an electricity connection (Tracking SDG 7, 2022). A much larger number of people (in 2018, over 300 million (Mukherji, 2018)) face unreliable and poor quality access to electricity, and over 440 million lack access to clean cooking technologies (Tracking SDG 7, 2022). Social Costs of Coal Phase-out For most of the last seven decades, coal has been the centrepiece of India’s energy story. Coal has strengthened the narrative on nation-building through its contribution to employment and livelihoods, shaping cultural identities, and a strong industrial footprint (Lahiri-Dutt, 2016). Through vested interests between coal, local and regional politics, and the private sector, India’s coal economy demonstrates the perils of ‘carbon entanglement’ (Gurría, 2013). For these reasons, in the contemporary discourse on energy transitions, coal remains a sensitive topic. This has been evident in the Indian government’s back-and-forth position on coal. From Paris Agreement in 2015 to COP 27 in 2022, India has pushed to make incremental changes to its Nationally Determined Contributions and, has sought agreement from other nation-states to underscore its position on a) phasing down, not phasing out, coal and b) calling for a phase-down of all fossil fuels – oil, natural gas, and coal. Tensions around coal phase-down in India are driven by the traditional positioning of coal as the panacea for pressing development outcomes. This is also reflected in an overdependence on coal producers for public goods and service delivery, otherwise state responsibilities. An institutional will to foster a fossil-free pathway to development over the medium-to-long term is only just emerging. As such, the distributional impacts likely to emerge from a low-carbon shift, particularly on India’s poor, have not been part of the national discourse until recently. In the absence of adequate policy support and social protection, the local and regional socio-economic costs of moving away from coal will hit those at the bottom of the development ladder the worst. This leads to a second, important procedural aspect. Decision-making about lowcarbon transition at the highest policy level excludes communities on the ground that are likely to be at the most risk of disadvantage from a technocratic green policy shift. Considering India’s unique multiple coal economies, the rank and file-level dependencies on coal for livelihoods extend beyond those who work informally across India’s coal mines. The coal ecosystem supports large-scale industrial activity, along the full value chain comprising scores of small and medium enterprises. The footprint is enormous and wide-ranging both spatially and temporally – from large bauxite mining and smelter plant operators to iron and steel plants to small service providers in industrial regions through to transportation providers, including road and railways (Sharma, 2021). A full assessment of the social costs of a coal phase-down – or an eventual phase-out – is impossible without comprehensively characterising the strengths, aspirations, and 82 Vigya Sharma and Julia Loginova limitations of the human and social capital present in regions and communities along this value chain. Their exclusion in the governance and decision-making processes has already been brought into focus by questioning the state’s moral and ethical obligations towards its citizens (Munro et al., 2017; Pierik, 2004). The Just Transitions principle builds on critical questions of rights, consultation, and negotiation to ensure energy transition outcomes lead to co-benefits across economic, environmental, and social aspects of long-term development (OECD, 2017). It highlights the role of institutional responsibility in designing public policies that are fair and equitable across class, caste, gender, race, and ethnic divides (Heffron & McCauley, 2018). In a society such as India facing deepening inequity and a dismal track record in addressing impacts on the marginalised, these questions warrant further deliberation (Aggarwal, 2020). These social costs are likely to be complicated by the presence of several additional factors: India has had a poor track record of, or focus on, planned closure (Dsouza & Singhal, 2021). Nearly 300 mines are either closed or abandoned in India. This is a pressing challenge with the number expected to grow significantly over this decade as older mines become economically unviable. For the first time nationally, social costs of mine closures have been considered under the purview of the government’s closure policy, which in and of itself remains poorly implemented, having only been formally introduced in 2009 (Reuters, 2022). Global literature on mine closure has established that for positive outcomes post-mining, social aspects in closure planning are best initiated at the start of a mine with human, technical, and financial resources committed to ongoing stakeholder engagement and consultation (Bainton & Holcombe, 2018; Owen & Kemp, 2018). Decisions concerning post-mine land use, economic transition pathways, and regional service provision are particularly critical in India which faces deep-seated heterogeneity in stakeholder perspectives and a culture of top-heavy decision-making. To address closure impacts fairly and equitably, time and financial commitments alongside national and regional political will are necessary (Roy & Schaffartzik, 2021). Social Costs of the Green Energy Transition India’s energy transition extends well beyond a one-dimensional narrative about the social and institutional costs of, and impacts from, transitioning out of coal. Since the early 2010s, India has rapidly accelerated green energy projects, mostly large-scale solar and wind. As shown in Figure 5.5, the spatial distribution of India’s energy systems is not uniform. While coal mining is mostly located in the east, renewable energy (RE) projects, mostly solar and wind, are in the country’s western and southern regions. Academic research on the social aspects of clean energy developments has mostly been focused on contestations in the Global North. Studies that explore energy injustices, patterns of consultation and conflict, and risks to natural resource-dependent groups in the Global South are few and far between. The scale and pace of RE development is pushing India as a champion of clean energy within developing regions. But the shift to these new systems is raising several Just Transition challenges, including the nature of community consultation and engagement that need sustained scrutiny (Yenneti et al., 2016; Sovacool, 2021). The aggressive expansion of the clean energy sector suggests a reproduction of what disadvantaged communities in the eastern resource-rich belt have experienced in the past: land dispossession, agrarian marginalisation, and abuse of rights over decision-making particularly amongst indigenous and ethnic minority groups. According to Stock (2022, The Social Aspects of India’s Energy Transition 83 p. 3), “green grabbing for large-scale solar installations are justified through moralistic discourses of ‘saving the world’ and countenanced by institutions of global climate governance.” Two additional aspects are worth noting in this context. Although structural, their impacts are exacerbated by the “greater good” appeal underpinning green energy development. India is rapidly pivoting to strong private sector engagement not only in coal mining but also in the roll-out of large-scale renewable energy projects. This is noteworthy considering the private sector has so far operated in a limited capacity in the energy space (mostly in relation to reform and privatisation of electricity in some states, and that too with irregular success) (Ghosh et al., 2021). Since the early 2000s, the private industry has actively sought to harness economic opportunities in “new energy” generation and production, fuelled by comprehensive policy support in the form of incentives and capital subsidies by both central and regional governments (Lakhanpal, 2019; Yenneti Figure 5.5 Geographical distribution of India’s large-scale energy systems (coal, solar, and wind). Global Energy Monitor, 2022 84 Vigya Sharma and Julia Loginova etal., 2016). However, there is an underlying note of caution here: unlike the traditional fossil fuel-driven public sector undertakings that have had an implicit responsibility to contribute to India’s development agenda (Viswanathan & Aggarwal, 2021), and provide for public goods and services, the new cohort of home-grown corporate players are profit-driven enterprises. There is an inherent lack of sensitivity to the socio-economic development aspirations of hundreds of millions of people whose lives intersect with corporate interests over access to land, water, and other natural resource wealth (EJAtlas, 2015; Lakhanpal, 2019; Rajvanshi, 2022). According to India’s ex-environment minister, Jairam Ramesh, “The corporate lobbies are just too powerful and in the name of ease for businesses, environment has become the biggest casualty” (quoted in (Ellis, 2020)). A second critical – but under-researched – aspect concerns the potential of increased resource extraction to secure the supply of critical minerals necessary for the clean energy transition. There are currently no known reserves of ETMs including, nickel, cobalt, molybdenum, and heavy rare earth elements in India (see Figure 5.6). The Indian Figure 5.6 An overlay of India’s coal mines and ETMs reserves and resources. Source: Global Energy Monitor, 2022; S&P Capital IQ Pro, 2022. The Social Aspects of India’s Energy Transition 85 government recognises its dependence on ETM imports over the short-to-medium term to build its clean technology manufacturing capabilities whilst ‘acting quickly (emphasis added) on the exploration and mining of critical minerals and setting up investments in the downstream value chains [domestically]’ (Chadha & Sivamani, 2022). Recent research has highlighted that caution is warranted as rising ETM demand will inevitably either lead to expansions of current mining leases or the development of new projects (Lèbre et al., 2020). Where institutional capacity is limited, the pace of mining intensification may lead to exacerbating social and environmental externalities. There is also evidence to support that ETMs are spatially located in some of the most sensitive landscapes, including fragile, remote, and climate-vulnerable ecosystems, that host a significant proportion of the world’s indigenous and other land-connected peoples (Owen, Kemp, et al., 2022). India’s poor record in upholding environmental and social safeguards across past extraction activities does not lend much confidence to future mining projects, particularly when there are likely to be competing economic, strategic, and geopolitical drivers. A recent study of over 5,000 ETM mining projects globally found that nearly 70% of all ETM projects are on or near land that qualifies as Indigenous Peoples’ or peasant land (Owen, Lebre, et al., 2022). The study sample included20 projects from India covering seven primary commodities.1 All projects were identified to be in jurisdictions with inadequate permitting, consultation, and consent measures. Fourteen of the 20 projects operated on or near Indigenous Peoples’ lands and within 50 km from a violent mining-related conflict over access to land, water, and/or natural resources. All projects existed on or near peasant lands. These are astonishing findings in and of themselves. More importantly, though, they offer a timely indication of the potential social costs of a clean energy transition if mining activities intensify in a context facing concurrent challenges from climate change, poverty, food insecurity, weak governance, and increasing marginalisation. Three Areas of Interventions for India’s Energy Transitions – Drawing on International Experiences Several world regions have planned and undertaken transitions away from coal since the early 1980s. While the underlying drivers and motivations for these transitions were different from the contemporary conditions propelling India towards low-carbon development, they offer important pointers, nonetheless. Comprehensive research on these past experiences has been widely published elsewhere (Caldecott et al., 2017; Diluiso et al., 2021; Walk et al., 2021). This section briefly reflects on these international experiences to identify relevant lessons for India. As discussed earlier, India’s transition challenge is uniquely complex and local. Yet these lessons can guide early planning and resource allocation to build strong institutional structures over the next few decades that ensure transition outcomes are sensitive, fair, and equitable. Table 5.2 draws together key lessons from various international transition experiences to inform India’s approach to a Just Transition. Drawing on these collective experiences, three areas of planned intervention are proposed below. When implemented concurrently, these allow a nuanced understanding of the underlying costs of transition. 86 Vigya Sharma and Julia Loginova Table 5.2 Summary of international experiences with coal phase-out and relevance for India Regions Drivers Governance Successes Failures Relevance for India Germany (transition from 1982) (Arora & Schroeder, 2022; Oei et al., 2020) Continuous planned and controlled coal decline Coal Commission with a multi-level, multi-sector focus on identifying and managing transition impacts. Complemented by substantive financial commitment Promotion of new identities and economic opportunities in coal regions to offer sustainable and long-term alternatives Policy interventions were not able to prevent externalities of structural change, including negative impacts on the labour market, demographic decline, and outmigration Setting up a non-partisan transition authority that drives polycentricism, devolving decision-making power to regional and local authorities; enabling action on the ground through funding commitment; holistic approach to local/ regional development postcoal; inclusive transition planning Poland (transition from 1987) (Brauers & Oei, 2020; Śniegocki et al., 2022; Szpor & Ziółkowska, 2018) Shift to market economy and associated sectoral shifts, high costs of coal production, poor economic viability (high production costs, poor labour productivity) Financial compensation for the coal industry, coal regions and workers; training programmes Support from municipalities Negative experiences of insufficient support, causing structural breakdowns. Widespread fear and institutional distrust leading to strong opposition against upcoming coal transitions; lack of focus on environmental remediation in coal regions Localised place-based planning for orderly mine closures; avoiding social conflicts through miner-specific structural support; building social capital to enable bottom-up initiatives; importance of the trade unions; ties between coal and politics causes vested interests to disrupt planning The Social Aspects of India’s Energy Transition 87 The US (transition from 1998) (Bainton & Holcombe, 2018; Greenberg, 2018) Competition from alternative energy sources (shale gas, renewable energy); anticoal calls from pro-climate groups State-driven attention to just and peoplecentred transition planning Focus on economic diversification led by local champions and rooted in community ties Lack of attention to environmental governance and land rehabilitation. High levels of socioeconomic decline persist in ex-coal regions Local champions/ advocates from within the community; focus on quality – not only quantity – of jobs; poor importance to environmental restoration lends to long-term socio-economic decline and legacy challenges The UK (transition from 1981) (Brauers et al., 2020; Campbell & Coenen, 2017; Gillard, 2016) Coal decline in primary consumption led to poor economics of coal, ageing infrastructure, and the emergence of climate action Stringent regulation on coal industry Local approach to and communityled design of regeneration interventions Top-down implementation of large funds failed to address vulnerabilities of those most at-risk, leading to further marginalisation and inequity Programmes likely to be successful when responsive to community needs; alignment between media/ public discourse and decisive policy intervention can expedite transition decisions; entrepreneurship building on existing skills; redeploying social and infrastructure capabilities along the value chain Australia (transition from 2012) (Edwards et al., 2022; Jotzo et al., 2018) Increased operating costs, concerns over public and environmental health, ageing infrastructure, government’s demand for increased coal royalties State (province)-based decision-making Focus on local infrastructure development, and economic diversification Insufficient time invested in stakeholder consultation Align transition plans with regional strengths and local priorities; instability in national policymaking is disruptive; design transition plans in consultative dialogueorientated process; focus on regulating closure Adapted from Sharma et al. (2023). 88 Vigya Sharma and Julia Loginova i) Knowledge base commensurate with the pace and scale of development India’s energy transition is bound by heterogeneity and complexity that is unprecedented in its economic history. As a first step therefore, governments need to work with locally based civil society groups and researchers to characterise impacted stakeholders across communities and industry groups (along coal and renewable energy value chains) and build a knowledge repository that underlines future change management strategies. The inclusion of researchers will bring a high degree of rigour needed in these characterisations. At the outset, this would include large data collection and mapping expeditions with a census-like precision about the human, natural, and social capitals present within millions of India’s communities at the forefront of the impending energy shift. This knowledge will, in turn, inform the nature, timing, and extent of structural support needed for transition planning over the next few decades. Financially supported by the central government, overseen by a dedicated state government agency, and managed by local NGOs, it will foster bottom-up ownership of the task, and inclusive engagement, thus ensuring sensitivity to local challenges. A baseline repository is critically missing in India; robust data is either dated or difficult to locate or unavailable. Although a daunting exercise (for cost and time reasons), the value of data-driven policy decisions on resource allocation as transition plans are drawn up regionally is indispensable. ii) Social dialogue, with a focus on consensus building Considering that energy systems are essentially socio-technical systems, the impacts of large-scale transitions on people and their socio-cultural ecosystems need both acknowledgement and accountability (Miller & Richter, 2014). The value of collaboration and social dialogue in planning for energy transitions has been a significant pillar of the Just Transition narrative (Molina Romo, 2022). It fosters consensus building, trust, greater ownership of the challenge amongst various stakeholder groups – communities, governments, and the industry, as well as a diversity of input in policy formulation (ILO, 2022). Dialogue is critical not only to address grievances but, in the first instance, to identify triggers that could turn into long-term grievances. An inclusive dialogue-orientated approach allows early recognition of pressure points that – if ignored – may lead to disagreements, even ending in violent conflict. South Africa’s NEDLAC and Germany’s Coal Commission are examples of national agencies accountable for ensuring stakeholder consultation and engagement on an ongoing basis as a driving force for successful transition outcomes (IEA, 2022b). Another positive example of embedding social dialogue within the broader approach to Just Transitions is evident in the Taranaki region of New Zealand. Homed within the Ministry of Innovation, Business and Employment, the Just Transition unit has meaningfully engaged with partner representatives from across government, worker groups, employers, Māori communities, (non-Māori) local communities, and civil society groups to create a Just Transition blueprint, subsequently leading to the adoption of a series of sectoral roadmaps. Community marginalisation and lack of inclusion and transparency are widely reported in energy project developments across India (Kaur, 2022; Menon, 2022; Paltasingh & Satapathy, 2021). Improved mechanisms of social dialogue will be critical to ensure impacts of government and industrial policy on local communities at the forefront of the transition are minimised, if not avoided. iii) Holistic interventions, to extend transitions thinking beyond jobs The Social Aspects of India’s Energy Transition 89 India’s energy transition planners are already confronted with the challenge of pace. Given the unprecedented nature of the scale of the transition, pace without adequate preparedness may lead to long-term legacy issues. An important aspect of this preparedness is to consider a policy that is all-encompassing in design and outlook. Most past transitions have focused mainly on job creation. Whilst not unimportant, economic opportunities are seldom equitably accessed in the absence of social stability and ecological integrity of local ecosystems (Wilgosh et al., 2022). There is evidence that poor attention to environmental rehabilitation played a critical role in the lasting socio-economic decline still noted across ex-coal regions in Appalachia (Engle, 2019; Greenberg, 2018). Announcements of the Just Energy Transition Partnerships in South Africa and Indonesia acknowledge these past failures and have thus offered a comprehensive transitions agenda including livelihoods security, infrastructure repurposing, protection of at-risk groups, and engagement with actors across the coal value chains (European Commission, 2022a, 2022b). In relation to environmental restoration for India, interventions will be needed on both circular economy and closure mandates, including revisiting closure-related financial assurance, planning timelines, and regulating penalties for inaction. Equally, inflection points for social conflicts in India’s energy systems need better mapping and planning. The intersection of energy and gender is one notable aspect (Fathallah & Pyakurel, 2020; Tsagkari, 2022). In the coal sector, for example, studies have highlighted the disproportionate impact on women and young girls manifesting in a decline in women’s participation in the labour force (Lahiri-Dutt, 2012). Policies that can directly address structural and social barriers to manage the gendered impacts of Just Transition (Braunger & Walk, 2022) in India are urgently needed. A sound knowledge base complemented with a bottom-up consultative process can enable broad-based, but regionally relevant, transition planning. Conclusion India has proclaimed its stand on climate change on the global stage. It has committed to an ambitious agenda for climate action but has equally sought to highlight gaps in action from the developed world on technology exchange, climate financing, and responsible consumption of all fossil fuels. India has – perhaps most assertively of all developing regions – also made clear its ongoing reliance on coal over the medium term to meet its urgent development priorities, while it continues to scale up renewable energy production and uptake. This chapter has highlighted four aspects of the uniquely complex character of India’s energy transitions. These factors help make sense of the dichotomy underlying India’s current and future choice of energy systems. These are rightful choices but require careful, proactive planning and governance to ensure impacts – and their outcomes – particularly for nearly 600 million Indians (The World Bank, 2022) living in poverty do not cause further marginalisation and inequity. The chapter identifies three interventions to help design robust long-term energy policy that builds on the principles of justice and fairness over the long-term. These offer a credible pathway towards an inclusive future, one that is not antithetical to India’s growth and development ambitions. The first speaks directly to the enormous gap in 96 Vigya Sharma and Julia Loginova capacity and 810 MW of solar power capacity (RVUNL, 2022). We explore the transition scenarios for RVUN and evaluate the macro impact on jobs. Transition Scenarios for RVUNL We develop three scenarios for RVUNL for the period 2022–2030 based on differentiated rates of decarbonisation. The respective transition pathways aid us in arriving at RVUNL’s power generation portfolio mix until 2030 and analyse plausible employment creation (and loss) in the commissioning and operations of different assets. Employment creation for decommissioning thermal assets is not considered. Scenario 1 – Business As Usual (BAU): Here, the proposed coal power capacity of 2.2GW is considered to be commissioned by 2027, with an addition of 810 MW of Solar capacity in 2024 (announced in the FY22 budget). Considering Transition Scenarios • Decommissioning of coal power plants at 35 years • Commissioning of proposed new coal power plants 2.2 GW by 2027 • Commissioning of the proposed solar capacity of 810 MW by 2024 Business as Usual Redirecting Capital for Accelerated Transition • Decommissioning of coal power plants at 30 years • Commissioning of the proposed solar capacity of 810 MW by 2024 • Capital of the proposed new coal power plants is redirected to solar power • Additional solar capacity shall be commissioned by 2030 Aggressive Decarbonization • Decommissioning of coal power plants at 25 years • Commissioning of the proposed solar capacity of 810 MW by 2024 • RVUNL’s generation in 2030 as share of RJ energy requirement shall remain at 2022 level (50%). • Req Add. Generation, post decommissioning shall be from solar commissioned by 2030 Figure 5.A.2 Methodology for assessing the impact on jobs. Source: Author’s compilation and analysis. - 10,000 20,000 30,000 40,000 50,000 60,000 BAU RCAT AD BAU RCAT AD BAU RCAT AD BAU RCAT AD BAU RCAT AD BAU RCAT AD BAU RCAT AD BAU RCAT AD BAU RCAT AD 2022 2023 2024 2025 2026 2027 2028 2029 2030 Year-wise jobs available for three transition pathways between 2022 and 2030 Coal Jobs Solar Jobs Figure 5.A.3 Year-wise jobs available for three transition pathways between 2022 and 2030. Source: Author’s compilation and analysis. The Social Aspects of India’s Energy Transition 97 a realistic decommissioning trajectory based on historical trends, existing coal assets past 35 years are considered for retirement. Scenario 2 – Redirecting Capital For Accelerated Transition (RCAT): Here, we assume zero thermal capacity addition with the equity capital budgeted by GoR redirected towards solar PV capacity addition. The solar PV capacity addition in this scenario is in addition to the planned 810 MW of Solar capacity simulated in Scenario 1. Further, the retirement of coal assets past the age of 30 years is considered. Scenario 3 – Aggressive Decarbonisation (AD): This scenario involves aggressive decarbonising by shelving the current plans to add new coal capacity and retiring the existing coal plants at 25 years. The share of Rajasthan’s energy requirement met through RVUNL’s generation in 2030 shall remain at the current level of 35%, which is achieved through an accelerated addition of solar PV capacity. Table 5.3 Snapshot of the RVUNL transition under the three scenarios  2023 2030  BAU RCAT AD RVUNL generation capacity (MW)     Coal 7,830 9,435 6,730 5,535 Gas 604 604 604 604 Hydro 164 164 164 164 Solar 0 810 4,842 10,754 Total 8,597 11,012 12,340 17,056 RJ peak demand (MW) 17,206 RJ Peak Demand (MW) - 20th EPS 23,534 23,534 23,534 RVUNL generation (MU) Coal (R) 42,621 51,358 36,634 30,129 Gas (R) 2,518 2,518 2,518 2,518 Hydro 196 196 196 197 Solar 0 1,419 8,484 18,841 Total 45,335 55,491 47,831 51,685 RJ energy requirement (MU) 95,172 RVUNL generation vs RJ energy requirement (%) 1,49,063 1,49,063 1,49,063 Additional capital investments (Rs., crores) 19,683 19,683 43,715 Emissions (million tonnes of CO2) Released in the year 49.363 53.533 38.579 31.972 % Change from 2022 to 2030 (+/-) 8% -22% -35% Total emission saving b/w 2023-30 5.67 62.50 87.08 Impact on Jobs Number of Job years as on 2022 13,295 Change in Coal Job years by 2030 2,254 -2,247 -4,145 Pre-Comm. Solar Job years on 2030 0 2,857 6,345 Post-Comm. Solar Job years on 2030 405 2,421 5,377 Total Solar Job years on 2030 405 5,278 11,722 Total Jobs Years Available on 2030 15,955 16,326 20,872 Jobs Created b/w 2023 and 2030 19,672 15,601 33,416 Coal and gas generation(R) is based on rated capacity and normative PLF, and availability adjusted for auxiliary consumption. Source: Author’s analysis. 98 Vigya Sharma and Julia Loginova The impact on jobs is estimated for each transition scenario based on estimated jobs created for the addition of solar and coal power capacity and adjusting for the loss of jobs against the decommissioning of coal power plants. For a comparative analysis, we estimate equivalent job years per megawatt per annum for solar and coal power generation. A job-year is defined as the ratio of time an employee spends on a particular project/task in a given year to the standard total working hours in that particular year. The analysis is carried out for pre-commissioning, post-commissioning, and decommissioning stages, as shown below. Analysis for Pre-commissioning, Post-commissioning, and Decommissioning Stages The costs of transition are estimated based on available benchmarks for the commissioning of power plants Rs. 7.3 Cr per MW (GoR, 2022) for coal and Rs. 4.07 Cr per MW (IEEFA, 2022) for solar. The BAU scenario results in the augmentation of thermal capacity and solar capacity by 2030, resulting in an increase in annual CO2 emissions of the utility by 8% from its 2022 levels. In the RCAT, the annual CO2 emissions of the utility level shall reduce by 22% by 2030 from the 2022 levels. The third scenario (AD) is ambitious, wherein the RVUNL, while maintaining its share in the Rajasthan energy landscape, aggressively pursues early decommissioning of thermal assets. This shall demand an investment of Rs. 44,000 Cr2, save 87 million metric tonnes of CO2 between 2023 and 2030, and reduce annual emissions by 35%. A summary of the analysis follows. Impact on Jobs As can be seen from the table, in the AD (accelerated decarbonisation) scenario, RVUNL is likely to create 33,000 jobs between 2023 and 2030. In comparison, the BAU and RCAT scenarios shall create 19,000 and 15,000 jobs, respectively. Net jobs created are a function of jobs lost due to decommissioning thermal assets and jobs created in the renewable energy industry. It may be noted that additional jobs may be created by repurposing thermal power plants and prioritising adoption of more job-intensive technologies such as distributed solar, but the same are not considered in our analysis. Energy transition in electricity generation will not simply replace coal jobs with renewable energy jobs as the transition presents a significant spatial shift in the loci of energy generation from the eastern to the western region in Rajasthan. This raises concerns for both direct employment and allied jobs. The nature and quality of jobs is also a concern. The deployment of renewable energy assets creates a majority of jobs in the construction and pre-commissioning phases, whereas the job intensity for operations and maintenance is very low. The pre-commissioning jobs for solar PV assets include business development, design and pre-construction, and construction and commissioning, typically lasting less than a year. The majority of the jobs are created during the construction and pre-commissioning phase (2.7 job-year per MW), with 65% being unskilled and semi-skilled (electricals and panel installation) and 35% skilled (site engineering The Social Aspects of India’s Energy Transition 99 related) in nature. The jobs in the business development phase are 100% skilled, and the design and pre-construction phases require 62% skilled workers. At the same time, in the post-commissioning, the solar plants employ – semi and lowskilled workers, with the majority – 86% of the jobs from unskilled (50%) and semi-skilled (36%) categories (Kuldeep et al., 2017). The thermal power industry offers long-term jobs, and the majority of personnel employed belong to unskilled and semi-skilled categories. The condition of workers employed for coal handling can be particularly grievous, while their wages do not reflect their risk exposure. Although the clean energy industry has relatively less hazardous conditions, the wages of the labour force and the short-term nature of the clean energy jobs may impact the long-term sustenance and growth of the associated labour. References Government of Rajasthan (GoR) (2022). Annual financial statement. Jaipur. Budget Speech, Rajasthan Budget, 2022-23,Available at https://finance.rajasthan.gov.in/docs/budget/ statebudget/2022-2023/Budget2022-23English.pdf IEEFA (Institute for Energy Economics and Financial Analysis). (May, 2022). Solar tariffs projected to increase by one-fifth over the next year. Kuldeep, N. (2017) Greening India’s Workforce. Available at https://www .ceew .in /sites / default/files/CEEW-NRDC-Greening-India-Workforce-report-20Jun17.pdf RVUNL (2023) 22nd Annual report FY 2022-23, Available at http://103.122.36.131/content/ dam/raj/energy/rvunl/pdf/AnnualReport/RVUN %20AR %202021 -22 _Main _compress ed .pdf Appendix 5B How a Village in Maharashtra Sparked a New Discussion on the Transition Away from Coal Vinuta Gopal, Badri Chatterjee, and Tanmay Takle The small village of Nandgaon, which has 800 residents and is 90 kilometres from Nagpur city, in the Indian state of Maharashtra, served as the catalyst for a discourse about what could be done to lessen the detrimental effects of coal on an agrarian community. When locals’ demonstration against the illegal disposal of fly ash in their farmlands made national headlines, the-then State Minister of Environment, Aaditya Thackeray took notice. He halted the fly ash from being dumped in the area and started a process to build alternative livelihoods and a solar power plant there. This incident also sparked a more in-depth discussion on coal plant phasedown and community involvement in the state. The actions taken in Nandgaon, the difficulties encountered by various local administrations there, and the function of community involvement are all discussed in this case study. 100 Vigya Sharma and Julia Loginova Assessing the Magnitude of the Issue To meet its goal of supplying enough electricity to Maharashtra, MAHAGENCO relies on the thermal power plants at Koradi (2400 MW) and Khaparkheda (1340 MW), both of which are close to Nagpur. They haven’t, however, succeeded in raising the standard of living for people who live and work close to power plants. Coal mines, manganese mines, and brick manufacturing industries are among the other businesses in the area. Farmers in Nandgaon had been cultivating their land for decades when, without their consent, in November 2021. Maharashtra State Power Generation Company (MAHAGENCO) started dumping truckloads of fly ash from the nearby Khaperkheda Thermal Power Station (KTPS), located 40 km away. Late at night, residents of the area and Zilla Parishad members from Nandgaon started filming the fly ash disposal. Using this as evidence, they started demonstrating (Manchanda, 2021) against the illegal ash slurry dumping in their farmlands, highlighting that it was a flagrant breach of environmental laws. Most importantly, fly ash was being discharged without receiving a no-objection certificate (NOC) (Behl, 2021) from nearby inhabitants. The ash pond, which is situated in the hamlet next to the Pench river, according to Sonali Manoj Varkhade, Sarpanch of Nandgaon, was having a negative impact on the entire village (Bose, 2022). Its spread was causing air pollution, ruining crops, poisoning water sources, drinking water, and having serious health effects on the local community. Using Research, Communicating the Effects of Fly Ash Contamination A group of researchers and civil society members (CSOs), through an in-depth study, brought this village's situation to public attention. A research paper released by the Centre for Sustainable Development, Manthan, and Asar evaluated pollution and its impacts on local communities living in 21 villages, including Nandgaon, located adjacent to KTPS and Koradi thermal power plant (“POLLUTED POWER,” n.d.). The research showed significant pollution across water bodies with dangerous metals such as mercury, arsenic, aluminium, lithium, and others contaminating the surface, groundwater, and drinking water, as well as widespread contamination of air, water, and soil owing to fly ash (www .ETEnergyworld .com, 2022). Water samples failed to meet the Bureau of Indian Standards’ drinking water standards and exceeded safe limits by 10–15 times. Reporting to the State, Centre, and Outlining the Situation on the Ground Given that they were aware of the health implications and how their future was being affected, local residents began to start registering their concerns publicly, not only with local government authorities but also directly with thethen State Environment Minister, Aaditya Thackeray as well as Union Minister, Nitin Gadkari, and the Ministry of Environment Forests and Climate Change (MoEFCC). Nandgaon residents sent a slew of letters to officials at various levels The Social Aspects of India’s Energy Transition 101 of government, under the direction of their village head (block, district, and state levels) (Jog, 2022). The-then State Environment Minister called a number of meetings in the months that followed (December 2021 to February 2022). The Minister rejected the excuses being made by MAHAGENCO, saying that “the environment cannot be sacrificed at the expense of development, especially where consent from locals is not in place.” He gave the State pollution control authority instructions to visit the location and suggest solutions before deciding on the next steps. Government and CSOs worked together to achieve an overarching understanding of the problem and devised thorough solutions. Union Minister Takes Cognisance, MoEFCC Calls for Spot Inspection Nitin Gadkari, a Nagpur-native and then Union Minister for Road Transport and Highways, was prompted by people’s complaints to also call for MAHAGENCO to reduce pollution from both the Koradi and Khaperkheda thermal power plants. The Minister argued for the earliest possible action taken immediately. On February 4, 2022, in a related development, representatives from the Union Environment Ministry visited Nandgaon and neighbouring districts. The team sent a report to MAHANGENCO for compliance and asked them to form a committee with representatives from the Maharashtra Pollution Control Board (MPCB), involved NGOs, Sarpanches from impacted villages, and MAHAGENCO officials to regularly monitor the site. Series of Actions Commence: Closure of Fly Ash Dump at Nandgaon An order was issued for KTPS to stop dumping ash slurry at Nandgaon on February 1, 2022, by the MPCB. According to the notice, MAHAGENCO violated environmental standards since it did not get consent from locals. The Chief Engineer, KTPS, complied with the order and halted dumping on February 4, 2022. Residents of Nandgaon experienced great relief when the ash dumping stopped, but after learning about the detrimental effects that the fly ash already dumped at the site was having on locals’ quality of life, the local community, led by mothers and other women, banded together to write a letter to the Minister. They asked that the ash pond be permanently closed, the bund repaired, and residents’ quality of life be improved through better employment opportunities. This spurred Aaditya Thackeray to visit Nandgaon and assess the site himself while the MPCB established a comprehensive prohibition on the disposal of fly ash within three months and directions for site rehabilitation were put in place. Minister’s Visit and Community Interaction On 14 February 2022, Thackeray and his team inspected the whole fly ash dumpsite. Thackeray visited the location to make sure everything was proceeding according to plan and spoke with the locals, particularly the women. A group of mothers, led by the Sarpanch, met with Thackeray and expressed their concerns, which the 102 Vigya Sharma and Julia Loginova Minister took cognisance of. The Nandgaon ash pond will soon be permanently closed, announced Thackeray (Bhalerao, 2022). In addition, he gave the mothers and the local community the assurance that a plan will be put together for the improvement of the community and the provision of employment opportunities. Maharashtra Marks the Start of an Energy Transition Movement The Environment Department was proactive and forward-looking in response to requests from the civil society and started a series of interventions for Maharashtra’s Energy Transition, making it the first state in India to do so. On 14 February 2022, the following announcements were made public: • Putting a solar plant in operation at Nandgaon – After the fly ash was removed, the State ordered MAHAGENCO to make plans for a 20 megawatt (MW) solar power project. • Opportunities for locals in Nandgaon to reskill and find jobs were created as part of a strategy for the area’s upliftment and to maintain a balance between the needs of the community and the energy industry as it transitions from coal to clean energy (Deshpande, 2022). • Residents who lost their land or suffered health problems as a result of the fly ash were awarded a total compensation of Rs. 5 crores by the Energy Department of Maharashtra (Behl, 2022). • Study on Power Plant Phase Down – A thorough investigation into how outdated and polluting coal-fired power plants might be gradually shut down in accordance with updated nationally calculated contributions was initiated. • An audit of Maharashtra’s power plants’ pollution prevention practices would be conducted. Regulating thermal power plants that don’t adhere to the rules would be necessary. • 100% Fly Ash would be utilised for environmentally friendly and infrastructure projects and brick manufacture. Plans of a similar nature will be made for other plants in Maharashtra. Furthermore, the Environment Department’s submission to the state legislative assembly in June 2022 said that the actions to remove the Nandgaon fly ash dumpsite were the first to be taken in India since the Dadri NTPC fly ash site was ordered to close as a result of procedural issues in 2008. Current Scenario MAHAGENCO has currently (as on November 2022) removed 85% of the fly ash, and preparations for the solar facility are on with tenders filed in September 2022. Out of 150 farmers, 92 received financial aid from the Energy Department, and 83 others were given jobs by the district administration. Fly ash disposal is still not permitted in Nandgaon. But this is only one of many villages in this area that are at risk from fly ash pollution. The Social Aspects of India’s Energy Transition 103 Lessons We need ground research to provide evidence on the current state of environmental and social compliance of power plants. This needs to be shared with the local community, local administration, the management of the power plants and regulatory authorities to enable a constructive engagement between community, local leadership, and regulatory authorities. We need informed local communities to be able to engage with all the decision makers. Panchayat leaders and relevant ministers need to understand the alternatives available to them. Local CSOs could play a role in engaging with the community on a regular basis on the issues related to the transition. Most importantly, leadership must be enabled at all levels of governance and political will to provide the necessary momentum for implementing the regulatory processes and to build the dialogues required for an alternative future. References Behl, M. (2021, December 25). NGO files complaint, villagers demand closure of ash pond. The Times of India. https://timesofindia .indiatimes .com /city /nagpur /ngo -files -complaint -villagers -demand -closure -of -ash -pond /articleshow /88481635 .cms Behl, M. (2022, June 19). State to compensate Nandgaon farmers hit by fly ash. The Times of India. https://timesofindia .indiatimes .com /city /nagpur /state -to -compensate -nandgaon -farmers -hit -by -fly -ash /articleshow /92308678 .cms Bhalerao, S. (2022, February 9). Khaperkheda power plant stops dumping of fly ash in Nandgaon village. The Indian Express. https://indianexpress .com /article /cities /mumbai / khaperkheda -power -plant -stops -dumping -of -fly -ash -in -nandgaon -village -7763484/ Bose, M. (2022, February 3). Khaperkheda thermal power plant told to stop dumping ash slurry in Nandgaon. Deccan Herald. https://www .deccanherald .com /national /west /khaperkheda -thermal -power -plant -told -to -stop -dumping -ash -slurry -in -nandgaon -1077790 .html Deshpande, T. (2022, April 22). How villagers living near coal power plants lost health, water security. https://www .business -standard .com /article /current -affairs /how -villagers -living -near -coal -power -plants -lost -health -water -security -122042200164 _1 .html Jog, S. (2022). Stop disposal of ash slurry: Maharashtra govt to MAHAGENCO. Free Press Journal. https://www .freepressjournal .in /mumbai /stop -disposal -of -ash -slurry -maharashtra -govt -to -mahagenco Manchanda, D. (2021, December 25). Raising voice against unscientific fly-ash dumping in Nandgaon village. Nagpur Oranges. https://nagpuroranges .com /raising -voice -against -unscientific -fly -ash -dumping -in -nandgaon -village/ Polluted power: How Koradi & Khaperkheda thermal power stations are impacting the environment. (n.d.). Manthan Adhyayan Kendra. Retrieved March 6, 2023, from https:// www .manthan -india .org /polluted -power -how -koradi -khaperkheda -thermal -power -stations -are -impacting -the -environment/ www .ETEnergyworld .com. (2022). Joint inspections of pollution hotspots near Khaperkheda power plant—ET EnergyWorld. ETEnergyworld.Com. https://energy .economictimes .indiatimes .com /news /power /jt -inspections -of -pollution -hotspots -near -khaperkheda -power -plant /91652728 6 Introduction Energy transition has emerged as a key enabler of climate action requiring decarbonisation across the sectors of the economies. The potential of extensively electrifying the major energy-intensive sectors of any economy in realising the goals of energy transition and climate action is significant. This strategy, commonly referred to as deep electrification, is premised on tapping the potential of low-carbon and carbon-free electricity systems to decarbonise energy-related sectors including power, transport, buildings, domestic cooking, and other such energy-intensive economic activities. Deep electrification of economic sectors can provide the much-needed strategic levers to eventually assist in the decarbonisation of the economy and enable nations to approach the global and domestic climate action goals, particularly pertaining to achieving netzero carbon emissions. According to a report by the International Renewable Energy Agency (IRENA), renewable energy–powered deeper electrification of global energy systems can help in achieving about 75% of energy-related emission reductions required by 2050 (IRENA, 2018). Globally, the potential of renewable energy–powered deeper electrification has been estimated by several reports which have pegged deep electrification and fuel switching to electricity as environmentally benign strategies for achieving climate goals and carbon reduction. For instance, a study by researchers from Stanford and UC Berkeley suggests an electrification plan for all 50 states of the USA in which the incremental electricity demand is to be met by renewable energy sources (Stanford University, 2015). Similarly, the United Nations Sustainable Development Solution’s Deep Decarbonisation Pathways project contemplates the national deep decarbonisation potential and strategies through its work in 36 countries (Institute for Sustainable Development and International Relations, n.d.). The needle on electrification of key energy-related sectors is moving fast in the Indian context as well. This is evident from the concerted efforts of the Government of India and several State Governments towards electrifying sectors such as road transportation, railways, buildings and domestic cooking, amongst others. Targeted policies as well as private sector–led action in these areas are a testimony of the recognition of deep electrification as a key enabler of India’s climate commitments and energy transition strategy. At the same time, it is also widely recognised that beneficial outcomes of deep electrification will only materialise if efforts on greening the electricity grid are accelerated. For every device, appliance, product, or sector which gets electrified and connected to the power grid, every incremental achievement towards greening the grid transcends into the entire fleet of grid-connected products and sectors. Thus, deep electrification is inherently 6 Deep Electrification in India A Review of Strategies, Policies, and Sectoral Developments Sarthak Shukla, Shubham Thakare, and RaghavPachouri This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-8 10.4324/9781003433088-8 Deep Electrification in India 105 Deep Electrification in India associated with structural challenges pertaining to greening the electricity supply, along with techno-economic, social, political, and environmental issues that persist. Addressing these issues will go a long way in rolling out deep electrification plans with effectiveness and efficacy of efforts towards realising the intended objectives of energy transition and decarbonisation. Policies Supporting Deep Electrification in India The policy landscape in India is increasingly embracing and promoting the electrification drive of key sectors through a host of schemes, policies, and other such initiatives. The prominent sectors where critical policies supporting deep electrification are active include transport, buildings, industry, domestic cooking, and agriculture. Transport In the transport sector, the Union Government is implementing its flagship scheme called Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India – the FAME Scheme (Ministry of Heavy Industries, n.d.-b). This scheme was started in 2015 as part of the National Electric Mobility Mission Plan 2020, launched in 2013, which aimed at achieving national fuel security by promoting electric and hybrid vehicles in the country (Ministry of heavy industries, 2013). The FAME scheme aims at incentivising electric vehicles across all the segments namely two-wheelers, three-wheelers auto, passenger four-wheelers, light commercial vehicles, and buses through supply-side and demand-side incentives on manufacturing of these vehicles by the Original Equipment Manufacturers (OEMs) in the auto sector. Phase-II of the FAME India Scheme is being implemented for a period of three years from April 2019 with a total budgetary support of Rs. 1,00,000 million, more recently the scheme has been extended till 31 March 2024 (Livemint, 2021). In the first phase of the Scheme about 0.28 million hybrid and electric vehicles are supported by way of demand incentive amounting to about Rs. 3,590 million. Phase-II mainly focuses on supporting electrification of public and shared transportation and aims to support, through subsidies, 7,000 e-Buses, 0.5 million e-3-wheelers, 55,000 e-4-wheeler passenger cars, and 1 million e-2-wheelers for which a budget provision of Rs. 10,000 million for a period of 3 years (2019–2020 to 2021–2022) has been earmarked for the establishment of charging infrastructure across the country(Ministry of Environment, Forest and Climate Change, 2021). Apart from these initiatives, the Government of India recently approved the National Mission on Transformative Mobility and Energy Storage which aims to strategically recommend ways and means to transform the mobility sector into a low-carbon and electrified system by means of policies supporting electric vehicles manufacturing and adoption (NITI, 2019). Under this mission, a Phased Manufacturing Programme (PMP) is to be launched to prioritise local production across the E-mobility value chain. In addition to this, the Ministry of Power, Government of India, has rolled out guidelines for setting up charging infrastructure and building an enabling and supportive ecosystem for the smooth roll-out of electric vehicles (EVs) in the country (Ministry of Power, 2022a). The objective of these guidelines is to enable faster adoption of EVs, ensuring reliable, accessible, and affordable charging infrastructure and ecosystem, affordable tariffs, generation of employment and income avenues, encouraging Electrical Distribution Systems to adopt EV charging infrastructure and promotion of energy security. Furthermore, in the aftermath of the COVID-19 pandemic, the Union Government 112 Sarthak Shukla, Shubham Thakare, and Raghav Pachouri expected to be a game changer for the steel industry with the deployment of technologies predominantly hydrogen direct reduced iron production with the use of zero-carbon electricity in Electric Arc Furnace. GoI is focusing on replacing existing fossil fuel with green hydrogen and its associated feedstock. Another industry is the fertiliser industry which uses ~26% (PPAC, 2020) of the total country’s natural gas demand (with reliance on imported LNG increasing YoY). It is estimated that ~7.5 MT of green hydrogen demand (IEEFA, 2022) would be consumed by mid-century in the sector. With the provision for waiver on electricity wheeling, it would be much interesting to see its scope as well as in the decentralised production of green ammonia. As per the estimates by The Energy Research Institute, penetration of hydrogen in the key energy–intensive industries of India will spur the hydrogen demand to reach 16 Mt in the baseline scenario and over 21 Mt in low-carbon scenario with higher penetration of low-carbon technologies in the respective industrial sectors. The impact of 16 Mt of green hydrogen production translates to over 700 TWh of additional electricity being generated, which poses a significant infrastructural challenge as well as an opportunity for the renewable energy sector in India (TERI, 2021). Agriculture Sector The agriculture sector’s energy usage comes primarily from irrigation. Conventionally, diesel generator sets have been deployed on a large scale to extract water for irrigation purposes in agricultural fields. Electrification of agricultural irrigation has been the focus of several policy programmes of the Government of India, as highlighted in the previous section of this chapter. Apart from electrification of irrigation, the policy focus of the government has also encompassed upcoming technologies such as electric tractors and the deployment of renewable energy–based solutions on agricultural farms, including standalone solar plants for additional power and income generation opportunities for the farmers. Additionally, adoption of electric tractors is also another low-hanging fruit on which the government is keen on capitalising in the near future with the perspective of reducing the emission intensity of the agricultural sector in the country. At the same time, there exists crucial challenges, specifically the techno-economics of electrification alternatives vis-a-vis the conventional modes of farming. In the case of electric pumps or solar-based pumps for irrigation, the cost economics are tilted in favour of continuing diesel pumps. This is also aggravated by the lack of access to reliable power, an issue which has largely been addressed by means of electrification drives across the country and achieving 100% electrification. However, reliable supply of quality power still remains a challenge in many pockets. In the case of solar-based pumps, though there exists a targeted subsidy and incentive-based programme for enhancing the adoption of solar pumps by farmers, there are upfront costs that hinder the same. Other than this, one of the key structural and legacy challenges that hinder the adoption of clean energy electric installations in the Indian agricultural sector is the fact that landholdings are typically small and most of the farming is subsistence farming. Thus, the majority of farmers do not have the financial capital to invest in such technologies which promise to return benefits gradually after an initial upfront investment. Then there are regulatory and administrative bottlenecks in availing scheme benefits, agricultural connections, power supply, and providing documental verification for the host of approvals required. Deep Electrification in India 113 Electricity consumption in the year 2020–2021 for the agricultural sector stood at 20.24% of total electricity consumption and highlights the energy-intensive nature of the sector. With 11 major DISCOMS of the country consuming 95% of electricity consumption in agriculture and annually providing over Rs. 1 lakh crores as electricity subsidy for agriculture, there exists a significant footprint of agricultural consumption in the power sector. Additionally, nearly 80 lakh pumps out of approximately 3 crore agricultural pumps installed in India are diesel pumps. The total diesel consumption of these pumps in a year works out to 5.52 billion litres per annum along with equivalent CO2 emission of 15.4 million tonnes. India’s efforts towards solarisation of the agricultural sector are expected to result in reducing carbon emissions by as much as 32 million tonnes of CO2 per annum. This is also envisioned to result in the reduction of import bills on account of petroleum products through the reduction of diesel usage by 1.38 billion litres per annum (MNRE, 2019). Residential This sector is another enabler for adopting and implementing low-carbon electrification measures that may include cooking, heating/cooling, and energy-efficient buildings. As previously stated, cooking is predominately based on firewood and coal leaving a huge potential for green electric sources untapped. While the Indian Government is working on a mission mode to enhance the coverage of LPG connections in households, an increased usage of LPG could lead to energy security issues along with challenges including the high cost of refill and poor access to refill depots. However, the transition to LPG will likely result in a lock-in of assets as a greener transition towards induction cooking is also on the charts. Deepening the initiatives on energy efficiency in the residential and building sector can result in significant avoided emission savings. These include transitioning from airconditioning to low-carbon cooling alternatives, green buildings and energy efficiency standards being adhered to in the construction and operations phase. Some of the key challenges faced by the electrification and decarbonisation efforts in the residential sector pertain to the information gap, difficulties relating to the accessibility of existing schemes, and issues related to the administrative capacity to roll out such innovative initiatives at such a scale, especially amongst deprived and underserved communities, amongst others. If ECBC is implemented rigorously throughout India, it has the approximate potential of saving 300 billion units of energy and over 15 GW of peak demand reduction which would result in a saving of around Rs. 350 billion. Subsequently, GHG emission reduction of over 250 MtCO2 is estimated (Ministry of Environment, Forest and Climate Change, 2021). While the impact and savings through the deployment of electric induction stoves are not yet quantified in the Indian context, they are likely to spur the electricity requirement from the power sector and entail emission savings. Thus, through solarisation of agricultural pumps through PM-KUSUM and achievement of PM-UJJWALA yojana targets in the residential sector, emission savings are estimated to the tune of 32 MtCO2e per annum and 250 MtCO2e, respectively. Challenges for Deep Electrification Although electrification of energy-intensive economic sectors holds vast potential towards realising India’s climate goals of being a net-zero economy by 2070, there exist several intrinsic and extrinsic challenges that need to be addressed. 114 Sarthak Shukla, Shubham Thakare, and Raghav Pachouri The first such challenge is conceptual in nature. Deep electrification, as a standalone concept, is incomplete without the decarbonisation of the power sector. In the Indian context, it appears in many cases that electrification is the end goal of a particular initiative and decarbonisation of the power sector is a parallel side-track activity. This creates silos of separate interventions and their convergence and alignment towards the broader climate goals appears to be missing from the narrative, planning, and implementation. Second, the economic viability of available technology alternatives of electrification in many of the sectors is a deterrent to the large-scale uptake of such technologies. Most of the alternatives have a high upfront cost and they break-even after a considerable amount of time, which makes their adoption currently susceptible to incentives and subsidies. A primary cause of this, in many instances, maybe the nascency of the stage of development of these technologies which adds to the cost of operations, while the economic dividends are reaped over a longer time frame. Third, supply chains for the manufacturing and distribution of such technologies are dispersed and often fragile. A country like India with significant resource constraints, especially in critical minerals, rare earth, and semiconductors, amongst others, is heavily reliant on imports from other countries to develop and distribute these technologies. This has a ripple effect on the cost of production, and thus, the retail cost of such technologies, as well as affects the resilience of the supply chain which gets exposed to external shocks that may disrupt the supply chain. Covid-19 was one such shock which shed light on the fragility of global supply chains. The top-down approach towards deep electrification leads to an information gap around newer electric technologies. Be it EVs, or green hydrogen, or farm-level solar plants, the broad approach has been to incentivise the end users to pick up these technologies by providing fiscal and other incentives. This runs simultaneously with a target that the government has set for itself to be achieved. On many occasions, such an approach runs the risk of being perceived as an external unknown product being forced down upon the public. There appears to be a lack of participatory processes being followed at the grassroots level before the introduction of newer electric-based technologies to garner support and ensure buy-in. A related issue is that switching fuels from conventional to electric based is not just about technological shifts, but also entails behavioural shifts at the consumer end to adopt the new technologies. There are very strong social, cultural, and economic factors that inform the behavioural decision-making by any individual, household, or enterprise which needs to be captured and addressed in a careful manner before introducing newer technologies which may act as a negative disruption otherwise. Way Forward Given the potential of a deep electrification strategy to mitigate carbon emissions from the economy along with the challenges it carries, a four-pronged approach is suggested for deep electrification for India. First, instead of focussing heavily on addressing the supply-side issues for low-carbon electric-based technologies, due importance and policy emphasis must be given towards resolving demand-side bottlenecks. This implies that the hesitation amongst the end users towards the adoption of electrified technologies, including behavioural factors, needs to be adequately addressed. Conducting frequent workshops, campaigns, and events about such technologies and their benefits and information sharing through interactive and Deep Electrification in India 115 effective means of pilot studies are some of the ways through which confidence and demand can be generated from the ground-up. Additionally, the involvement of potential end users as stakeholders, instead of only having those groups that are informed already about the technologies, can prove to be extremely beneficial when it comes to scaling-up the adoption. Second, making the adoption of electrification technologies conditional upon financial incentives and subsidies can create more problems than it solves. The sustainability of efforts of deep electrification should be ensured while planning and implementing. This may be done by clarifying a subsidy phase-out plan when a policy is announced or using innovative financial mechanisms in which the upfront subsidy given is eventually recovered once the technology becomes viable. However, such ways are subject to their acceptance by the stakeholders, especially end users, and efforts should be continuously made to have them on board while such decisions are being made. Third, before a regulatory framework towards the governance of any electrification initiative is announced, it may be put to a sandboxing text which can help the policymakers identify key challenges that may come up in the implementation stage. This also provides policymakers the much-needed flexibility to go back and make necessary amends in the framework in order to make the initiative more effective on the ground. Finally, deep electrification strategies and initiatives need to be converged and aligned with decarbonisation initiatives, in letter and spirit. This implies that the initiative towards electrification of economic activity or a sector should not be limited to achieving the objective of electrification only but have concrete elements that pertain to ensuring deep decarbonisation to go along with it. Such convergence will ensure a smooth transition and better realisation of the climate goals and also provide clarity to financial and market-level stakeholders towards investing in deep electrification strategies. References Bureau of Energy Efficiency. (2022, November 22). Perform Achieve and Trade. Bureau of Indian Standards. (n.d.). National Building Code. Bureau of Indian Standards. Retrieved January 10, 2023, from https://www .bis .gov .in /standards /technical -department /national -building -code/ Clean Energy Ministerial. (2021). EV30@30 Campaign. Global Efficiency Intelligence. (2021). Electrifying US Industry: A Technologyand Process-Based Approach to Decarbonisation. IEEFA. (2022). 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Accelerating Transport Electrification in India by 2030′. https://climatetrends .in /wp -content /uploads /2022 /07 /accelerating -transport -electrification -in -India -by -2030 .pdf 116 Sarthak Shukla, Shubham Thakare, and Raghav Pachouri Livemint. (2018). 100% Railway Electrification to Double Power Demand by 2022 | Mint. https:// www .livemint .com /Companies /Sun iviC cxYR cSkG ON6v1TO /100 -railway -electrification -to -double -power -demand -by -2022 .html Livemint. (2021, June 26). Govt Extends Fame Scheme till 2024. Mint. https://www .livemint .com /news /india /govt -extends -fame -scheme -to -promote -electric -mobility -till -2024 -11624688932461 .html Ministry of Environment, Forest and Climate Change. (2021). India: Third Biennial Update Report to the United Nations Framework Convention on Climate Change. Ministry of heavy industries. (n.d.a). 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Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan. https://mnre .gov .in /img /documents /uploads /file _f -1632204688401 .pdf MORTH. (n.d.). VAHAN SEWA| DASHBOARD. Retrieved November 22, 2022, from https:// vahan .parivahan .gov .in /vahan4dashboard/ NITI. (2019). E-Mobility: National Mission on Transformative Mobility and Battery Storage | NITI Aayog. https://www .niti .gov .in /e -mobility -national -mission -transformative -mobility -and -battery -storage NITI Aayog and RMI India. (2019). India’s Electric Mobility Transformation: Progress to Date and Future Opportunities. https://rmi .org /wp -content /uploads /2019 /04 /rmi -niti -ev -report .pdf NITI Aayog and RMI India. (2022). Harnessing Green Hydrogen: Opportunities for Deep Decarbonisation in India. https://www .niti .gov .in /sites /default /files /2022 -06 /Harnessing _Green _Hydrogen _V21 _DIGITAL _29062022 .pdf PPAC. (2020). 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Retrieved November 22, 2022, from https://www .unido .org /IDDI Chapters in this section deal with two distinct but oftentimes inter-related themes: one set of chapters analyses policies or policy frameworks that shape some aspects of energy transition; a second set analyses issues related to institutional governance of energy transition, i.e., both the positive and the normative. Therefore, chapters in the section give readers an overview of extant policies and their effectiveness, as well as how they might be. Chapter 7, by Simran Grover, Naini Swami, and V. Suresh, foregrounds the lives and livelihoods of people in the context of policy commitments made to achieve low carbon pathways. It uses the Indian Constitution as a reference framework to define governance and development principles to help achieve Just Energy Transition. It argues that, given the country’s economic, social, and cultural diversity, a one-size-fits-all transition strategy would neither be feasible nor desirable. What would be most appropriate is a decentralized and participatory governance regime. It argues that in India, given the structural inequalities based on caste and gender, “procedural justice” attains great significance which cannot be delivered by decentralization alone. Therefore, it argues that a bottomup decentralized process, which includes disadvantaged and marginalised groups, would be necessary for a just energy transition. Chapter 8, by Sarthak Shukla and Raghav Pachouri, assesses the policy landscape with regard to energy transition in terms of its objectives, governance mechanisms, and tools of regulation and impact thus far. It then makes key recommendations emerging from the analysis. It argues that an important enabler of policy effectiveness will be intraand inter-sectoral coordination. In addition, measuring progress will be the key enabler of policy. Therefore, a real-time policy monitoring mechanism is of critical importance. The chapter has two associated Appendices. The first, Appendix 8A (Equitable Distribution of Market Risks – A Critique of the Electricity Act 2003), by Simran Grover, argues that a conceptual analysis of risk distribution may be critical to understanding the challenges facing the electricity sector. The second, Appendix 8B, (Untapped Scheme Convergences for Promoting Renewable Energy in India), by Sayantan Dey and Vinay Jaju, argues that a convergence between schemes will not only ensure the growth of renewable energy but also bring co-action between programmes with respect to implementation and creating sustainable assets for the community. Chapter 9, by Mritiunjoy Mohanty, Saon Ray, and Naini Swami, analyses the recent reassessment of industrial policy both in theory and practice and its applicability particularly given that decarbonisation will involve technological change. It begins by observing that industrial policy is now being widely used by both developed and developing countries, particularly in the context of green technology and clean energy. The reassessment of Part 2 Governance and Policy Perspectives: an Introduction Mritiunjoy Mohanty and Runa Sarkar This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-9 10.4324/9781003433088-9 118 Mritiunjoy Mohanty and Runa Sarkar Governance and Policy Perspectives: an Introduction industrial policy establishes that past episodes of industrial policy have been significantly more successful than earlier understood. It notes that moving beyond market failures, the state has an entrepreneurial role to play in reducing Knightian uncertainty, particularly in the context of technological change. The chapter has an associated Appendix. Appendix 9A (In-situ Power Generation in Urban Space for End Users), by Arunava Ghoshal discusses the role of policy and policy convergence in stimulating the scaling up of rooftop solar power generation and use. Chapter 10, by Madhura Joshi and Swati Dsouza, analyses challenges, processes, and pathways that have led to dialogue and legislations on coal phaseouts and Just Transitions in South Africa, Germany, Poland, and the USA. It also draws lessons from these experiences for India’s planned coal phasedown. It argues that whatever may be the short-term pressures, the phasing out of coal is inevitable. That being so, it is much better to plan for it rather than be faced with the social and economic dislocation of a steep decline in coal use and production. This is all the more so given that the experience of countries that have undergone phaseouts tells us that transition paths tend to be both long and uncertain. In Germany’s Ruhr Valley, it took more than 40 years to regain its earlier levels of economic activity. Unemployment in coal-producing regions in the UK remained higher than the other regions until 2008. In South Africa, it took more than 10 years just to arrive at a consensus on the way forward. Planning therefore is absolutely central to the effectiveness of a Just Transition. Chapter 11, by Jahnavi G. Pai, Munna Jha, and Vinuta Gopal, is a bottom-up view of energy transition, especially from that of marginalised communities whose lives and livelihoods depend on coal. It makes a case for including the voices of the local communities in the discourse around energy transition and the pathways ahead. It argues that the experience of Jharkhand and Kerala (detailed in the associated Appendix 11A) establishes that both in a poor mining state (Jharkhand) and a relatively prosperous nonmining state (Kerala), the key to effectively coping with climate change was relatively autonomous Gram Panchayats with empowered local political leaderships willing to consider alternatives better suited to their areas. Appendix 11A (Decentralised Electricity Generation Using Rooftop Solar: A Case Study of Perinjanam Village), by Hari Subbish Kumar Subramanian, discusses the village of Perinjanam, a classic example of empowered local self-governance, leading to a successful model of decentralised rooftop solar power generation at the Panchayat level. 7 Energy Transition and Justice Energy transition is not just about technological change in energy production but crucially includes and entrenches a transition in consumer behaviour, institutions, and their power, infrastructure, and cultural discourses (Williams & Doyon, 2019). The global fuel (oil and gas) crisis triggered by the Ukraine–Russia conflict has highlighted, once again, the complications of international geopolitics and its entanglements with global and regional energy security. In the present context, energy production from extractive sources and entrenchment of investments in energy assets are pressing concerns for citizens and institutions of sovereign nations. Coal mining’s deleterious environmental impact is well documented. Recent research presents compelling evidence against open-cast mining activities from multiple districts across India (Ranjan, 2019). Land clearing and mining operations remove natural vegetation and fertile topsoil, leave permanent scars on the landscape, impoverish soil quality, and drastically change ecosystems’ biotic and abiotic components (Mishra & Das, 2017). A 2016 report highlights that coal mining activities in India have caused the displacement of 87,000 people since 1973, including 14,000 Adivasis (Amnesty International, 2016). Does a clean energy transition offer an alternative development paradigm which is environmentally non-extractive and socially inclusive? The emerging evidence suggests otherwise. Renewable energy projects are reported as sites of conflict between local communities and project developers (Aggarwal, 2021). In Rajasthan, the Supreme Court’s order, to install bird diverters on the high-voltage lines and to move them underground in identified critical regions (M.K. Ranjitsinh v Union of India , 2019) when the avian population was endangered because of contact with highvoltage lines of the upcoming renewable energy power plants, is yet to be implemented. Further, a central issue at the heart of energy transition is its impact on livelihoods. The coal economy employs only 4.7 million people directly across the globe but supports a much larger number of indirect jobs and livelihoods, cutting deeply across sectoral value chains of many industries (World Bank, 2021). Clean energy transition navigates complexities at the intersection of corporate interests, state priorities, and lives and livelihoods of people; enshrining social and environmental justice in the energy transition is a matter of human decency and dignity. Chapter 20 delves deeper into the concept of Just Transition and what it means for all stakeholders. For India, clean energy transition provides an opportunity to shape new paradigms of development and growth, where the need for a “Just Transition” takes centre stage. Given the unique social, cultural, historical, and economic context of India, the consensus 7 Governance Principles for a Just Energy Transition Simran Grover, Naini Swami, and V. Suresh This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-10 10.4324/9781003433088-10 120 Simran Grover, Naini Swami, and V. Suresh on the vision of “Just Transition” and principles that may be adopted to achieve the same require a broader political recognition and acceptance. In the following sections, we deliberate on some such governance principles for a just energy transition by exploring the critical domains of labour and environmental governance. Labour Governance and Just Transition The Just Transition of the workforce is inextricably linked to the creation of decent work and quality jobs in accordance with nationally defined priorities (United Nations, 2015). The decent work agenda is a long-standing goal of the International Labour Organization (ILO) as well. Broadly, it refers to “access to full and productive employment with rights at work, social protection, and the promotion of social dialogue” (ILO). The ILO Declaration on Social Justice for a Fair Globalization recommends member states to lay down mechanisms for measuring decent work indicators (ILO, 2008). In pursuance of the same, an expert body of the ILO adopted a framework for Decent Work Indicators covering ten substantive elements relating to the four strategic pillars of ILO’s Decent Work Agenda: (i) employment creation, (ii) social protection, (iii) rights at work, and (iv) social dialogue. The ten substantive elements of decent work agenda are employment opportunities; adequate earnings and productive work; decent working time; combining work, family, and personal life; work that should be abolished; stability and security of work; equal opportunity and treatment in employment; safe work environment; social security; and social dialogue and employers’ and workers’ representation (ILO). The legal indicators for decent work cover maternity protection (including weeks of leave, replacement rate, and coverage), paternity and parental leaves, maximum hours of work and paid annual leave, and minimum wage setting procedure and level (ILO, 2013). The salience of the decent work agenda is reiterated in the guidelines for a Just Transition towards environmentally sustainable economies and societies (ILO, 2015), whose key recommendations are: • Integration of social dialogue, including adequate, informed, and ongoing consultation into the institutional framework at all levels. • Recognition, promotion, and realization of fundamental principles and rights at work. • Recognition of the strong gender dimensions of environmental challenges and opportunities and the creation of specific policies to address the same. • Coherence in economic, environmental, social, education/training, and labour policies. • Creation of a Just Transition framework for creating decent jobs, anticipating employment impacts, adequate and sustainable social protection for job losses and displacement, skill development, and social dialogue, including the effective realization of the right to organize and bargain collectively (ILO, 2015). Understanding the Indian Workforce The workforce in India is broadly classified into three categories: self-employed, regular wage/salaried, and casual workers. An analysis of the PLFS Annual Report 2019–2020 shows that amongst the three categories, the majority of India’s workforce comprises self-employed people (53.5%), followed by casual workers forming 26.3%, and only 18.2% who are regular wage or salaried workers (NITI Aayog, 2022). The labour laws Governance Principles for a Just Energy Transition 121 segment the workforce into informal and formal workers and the labour market into organized and unorganized sectors. Together, the informal workers and unorganized sectors form the country’s informal economy, where workers are excluded from the benefits of formal contracts, paid leave, and social security benefits. There is persistent conceptual ambiguity in classifying informal and formal workers and organized and unorganized sectors. The disparities arising from the absence of legal protection for informal workers are considered a fundamental governance flaw (Shyam Sundar, 2019). Evidence suggests that the coverage of social security schemes amongst economically and socially vulnerable sections has remained poor. While regular workers are largely covered by the provident fund regime, the growing segment of casual and contract workers, even in the organised sector, appear to be discriminated against. The entire selfemployed workforce is inherently excluded. Although the statutory provisions of the provident fund are supposed to be applicable universally amongst industries specified in Schedule I, the evidence clearly points to a dismal state of affairs (Sakthivel & Joddar, 2006). Seasonal and circular labour migrants form a growing segment of the informally employed. Poor and low-caste workers form a disproportionate proportion of such workers comprising the lowest rung of labour at organised sector work sites. They are segmented and fragmented by the recruitment process and along the lines of caste, sex, ethnicity, language, and region. This segmentation and fragmentation create the basis for capital to acquire low-cost, highly flexible labour, who work long hours and take up the most dangerous work. Gender-based labour segmentation builds on the culturally determined social reproduction responsibilities of female workers and other socio-cultural factors (Srivastava, 2019). As far as the coverage of social security schemes is concerned, 85% of workers from non-farm sector belonging to the category of SCs and OBCs do not have social security benefits. For the other categories, it stands at 75%. Amongst the unorganised segment of workforce, there is hardly any coverage of social security schemes. For instance, coverage of the Workmen’s Compensation Act which provides for security and medical treatment in the context of occupational and workplace accidents and mishaps is not available for the bulk of workers in the informal and causal labour segment. Estimates for the organised segment suggest that 85–90% of the workforce belonging to the category of STs and others are covered under social security schemes, but coverage for SCs and OBCs is lower, being less than 80% for OBCs (Sakthivel & Joddar, 2006). India and the ILO Conventions India is a founding member of ILO and has contributed significantly to setting ILO standards, which have substantively influenced its labour governance. India has ratified 47 conventions covering 15 subjects. Fundamental ILO Conventions ratified or ignored by India are listed in Table 7A.1. However, of the 47 Conventions and 1 Protocol ratified by India, 38 are in force, 5 Conventions have been denounced,1 and 5 instruments have been abrogated2. From the ILO conventions relevant for Just Transition, India has ratified 10 of the 25 instruments. Social security, social policy, occupational safety and health, and labour relations remain neglected subjects in the existing architecture of binding ILO standards accepted by India (ILO, 2015). Table 7A.2 provides a detail of the Just Transition conventions accepted by India. 224 Saarthak Khurana et al. SWOT – PSU Perspective The inherent strengths of Indian PSUs like NTPC and CIL include their strong financial positions with cash balance, dominant market positions, Government of India support, and large skilled workforces. Amongst the key weaknesses that they face towards diversifying their business are organisational inertia towards existing core businesses and lack of experience with inorganic growth. Considering opportunities and threats in the market such as rapid growth in RE, international commitments to reducing emissions, and growing cost competitiveness of storage, PSUs could consider businesses up and down the value chain of their core business for diversification. Porter’s Diamond Framework-Based Assessment of Policy and Government Support for Business Enablement Porter’s Diamond framework helps identify the competitive advantages amongst businesses for industries which operate in a regulated environment and do not enjoy open/free market conditions. The framework does so by factoring in government support through various regulations and policies by considering four major factors to determine the competitiveness of a specific industry in a country: factor conditions; demand conditions; related and supporting industries; and firm strategy, structure, and rivalry along with the government influence on these factors. The analysis can be applied to each investment segment identified under SWOT for the respective PSUs to develop business segment-level priorities. Factor Conditions Factor conditions represent the factors (inputs) available in the country to enhance the competitive advantage of the industry. Availability of natural resources domestically on which industry has a major dependency, adequate infrastructure development by the government to assist the industry, and ease of financing the projects through preferential capital are the factors that may be considered in the approach. Demand Conditions Demand conditions define the nature of domestic demand for the product or the services provided by a particular industry. There are broadly three significant factors that may be considered in the approach: domestic market size, policy and regulatory support by the government to develop the demand for the product, and the number of business-tobusiness customers to estimate market demand. Related and Supporting Industry This aspect defines the presence of various supporting industries that can contribute to the value chain of a specific industry by sharing intersectoral activities. Factors that may Future-Proofing India’s Coal PSUs 225 be considered are adequate availability of suppliers which drives market competition and innovation, incentives to suppliers by the government to drive the growth in production, and international competitiveness of the supplier to access its global market acceptance in terms of product performance and pricing. Firm Strategy, Structure, and Rivalry This dimension determines the firm’s strategic alignment with specific industry and market competitiveness. Factors that may be considered are: organisational targets to determine its alignment with the business, initiatives, and actions undertaken by the firm for market penetration (formation of subsidiaries) and understanding (pilot projects and MoUs) and the number of players in the market to evaluate market competitiveness. Government Government policies and regulations have a direct and indirect influence on the three determinants to determine competitiveness: factor condition, demand condition, and related and supporting industry. Through various policies and regulations, government may influence factor condition by developing supporting infrastructure, demand condition by developing demand for the product, and related and supporting industry by providing incentives to attract businesses in the segment and increase market competitiveness. Framework To identify the attractiveness of the industry for each PSU, a weight of 5 may be assigned to each of the four conditions adding up to 20. A rating scale with values 0–2 and 0–1 may be considered for each of the sub-conditions, depending on the range of responses; a higher rating indicates that there is a higher degree of compliance with that factor. On a rating scale with values of 0–2, a score of 1 signifies limited agreement with the particular factor. An illustrative example is provided in Table 13.1. Government support to the industry may also have an indirect weightage of 5. Adequate supporting infrastructure from factor condition, incentivising policy for demand creation in demand factor, and production-linked incentives to the supplier in the related and supporting industry can have a weightage of 1, 2, 2, respectively, which portrays the government support to the industry to determine national competitiveness of a particular industry (see Figure 13.9). Porter’s Diamond PSU Perspective Most of the business segments in which the PSUs operate are regulated and are significantly influenced by government priorities. Business segments like renewable energy, e-mobility solutions, and energy storage are also some of the business segments to have government support, and therefore PSU strategies may be aligned to investing in the same. Therefore, Porter’s diamond analysis emerges as a useful framework for identifying business segments’ attractiveness as it factors in the influence of government policies, targets, and decisions. 226 Saarthak Khurana et al. Mechanism for Identification of Suitable Businesses within the Identified Business Segments Multi-criteria Decision Analysis to Identify Suitable Business Diversification within the Business Segment To determine the suitable business for diversification for each PSU within the business segment, multi-criteria decision analysis (MCDA) approach may be applied considering various environmental, economic, and technical factors. MCDA provides Government (indirect 5) Demand Conditions (5) Domestic Market Size ($ Bn) - 2 Incentivising Policy (Y, N, L) – 2 # of B2B customers (>3,<3) - 1 Factor Condition (5) Domestic natural resource adequacy (Yes, No, Limited) - 2 Adequate supporting infra (Y, N) - 1 Access to preferential capital (Y,N,L) - 2 Strategy, Structure and Rivalry (5) Company Target (Y,N) – 1 Initiative/Action (MoU, Pilot etc.) - 2 # of competitors (<2, 2, >2) -2 Related & Supporting Industry (5) Adequate domestic suppliers (Y,N,L) – 2 Incentives to suppliers (Y,N,L) – 2 Intl competitiveness of suppliers (Y/N) - 1 Figure 13.9 Structure of Porter’s diamond analysis. Source: Climate Policy Initiative. Table 13.1 Determinants of Porter’s diamond analysis Determinants Response Weight Factor condition 5 Domestic natural resource adequacy Yes, no, limited 2 Adequate supporting infrastructure Yes, no 1 Access to preferential capital Yes, no, limited 2 Demand condition 5 Domestic market size USD billion 2 Incentivising policy for demand creation Yes, no, limited 2 No. of B2B customers Less than three or more 1 Related and supporting industry 5 Adequate domestic suppliers Yes, no, limited 2 Production-linked incentives to suppliers Yes, no, limited 2 International competitiveness of suppliers Yes, no 1 Strategy, structure, and rivalry 5 Company target Yes, no 1 Initiative/action taken (pilots, MoU, etc.) Yes, no 2 Number of market competitors <2, 2, >2 2 Source: Climate Policy Initiative. Future-Proofing India’s Coal PSUs 227 a comparative suitability assessment of businesses within an identified segment by weighting various criteria to reflect their relative importance and scoring each business option according to rating on identified criteria to evaluate investment potential. Factors that may be considered in MCDA can be classified into two criteria categories: qualifying criteria and scoring criteria. Considering these factors, suitable businesses can be identified for diversification to mitigate energy transition risks and decarbonise their business operations. Qualifying Criteria The qualifying criteria aim to serve as a checklist that can inspire the development of business diversification and decarbonisation strategy based on technical maturity, government support in the form of policy, and carbon mitigation potential. Businesses that meet threshold requirements may further be considered in the scoring criteria for diversification. Scoring Criteria The scoring criteria give guidance on how the identified businesses may be ranked based on the suitability for diversification, considering factors like investment potential, return on equity, and business-related risk to evaluate investment potential. Framework A business, to be considered suitable under this proposed framework for diversification, with an aim to decarbonise business operations, should satisfy all the following factors: a. Technology maturity – Commercial viability of the specific technology related to the business demonstrated successfully either domestically or globally. b. Presence of policy support – Direct and indirect support to the business from the government be present in the form of policies, regulations, and incentives. c. Carbon mitigation potential – Business operations be carbon neutral or have carbon mitigation potential or assist carbon-mitigating business by providing supporting infrastructure and sharing intersectoral activities. Table 13.2 Qualification criteria Factors Yes Partial yes No Technology maturity Advanced domestically Internationally advanced Technology demonstration stage Presence of policy support Policies and incentives present in support of the business Indirect presence of policy support and incentives Absence of supporting policies and incentives Carbon mitigation potential Business with carbon-mitigating potential Carbon neutral business and carbon mitigation assisting business Carbon emitting business Source: Climate Policy Initiative. 228 Saarthak Khurana et al. A business to be considered for further evaluation under the proposed framework should satisfy all the above-mentioned factors. To gain an overall impression of the business and to rank the businesses in order of suitability for diversification, the following scoring criteria may be considered: a. Domestic investment potential – This is determined using various national targets and projected domestic demand. Sizeable market/investment potential propels business growth and provides opportunities for market penetration and growth to the market players. b. Return on equity – This can be determined from industry averages, regulated returns, and expert inputs (in new businesses). The higher the return, the more lucrative the business for shareholders. c. Business risk i. Capital work-in-progress (CWIP) period – CWIP refers to the time required for the construction of the project. As the beginning of the recovery of the cost happens after the CWIP period, a lower CWIP period would be encouraging. ii. Market competition – Competitive market results in a fall in price and reduces profit margins. Competition in business can also shrink a company’s market share. Therefore, lower market competition would be desirable. iii. Organisational experience – Initiatives undertaken by the organisation through business investments, MoUs, pilot projects, and joint ventures demonstrate organisation’s willingness and experience. iv. Import dependency – A business becomes more vulnerable to geopolitical risks and foreign exchange volatility risks with high import dependency. This builds upon the government’s Atmanirbhar Bharat initiative and therefore low import dependency would be desirable. To rank the businesses by suitability for diversification, each criterion can be assigned desired weightage and a rating scale of 0–5 can be considered. Considering the range of responses, a higher rating would indicate that there is a higher degree of compliance with those factors in support of the business. MCDA – PSU Perspective This MCDA goes deeper into business-level analysis and considers critical factors for these PSUs such as policy support, carbon mitigation and technology maturity. These are critical for PSUs as they are owned by the government and need to remain aligned to the direction of public policy, including on initiatives like Atmanirbhar Bharat and commitments on carbon mitigation. Also, PSUs need to be more mindful than private sector peers when venturing into new businesses on account of their lower risk appetites, thereby a preference for lower risk mature technologies. Growth–Share Matrix Analysis to Determine Suitable Business Portfolio The growth–share matrix (BCG, 1970) may be applied to determine a strategic business portfolio for diversification. The growth–share matrix classifies businesses into four diverse groups based on the attractiveness of the industry and its competitive position, classified as “Pet, Question mark, Cash cow, and Star.” This proposed framework Future-Proofing India’s Coal PSUs 229 characterises businesses on the basis of expected growth rates and likely market share over a 2×2 matrix capturing potential to classify them in the four groups mentioned. “Pet” businesses are likely to have both low growth rates and low market share. These businesses may therefore generate limited revenues which would be required to maintain their operations. There would be limited chances for these businesses to grow bigger or more profitable in near future. “Question mark” businesses are likely to have high growth rates but low market shares. These businesses can explore untapped opportunities and may be attractive because of the high market growth they enjoy. However, these businesses would need to capture significant shares of their respective market for them to be valuable. “Cash cow” businesses are likely to have low growth rates but a high market share. These businesses can offer stable sources of revenue for the organisation. As these businesses have low growth, they may not be able to power the organisation’s growth ambitions, but because of their high market share, they can generate significant revenue, which can be utilised for developing other businesses within the firm. “Star” businesses are likely to have both high growth rates and a high market share. These would be highly attractive businesses that generate a large amount of revenue by leveraging their successful market dominance status. But to achieve this state, these businesses may also require significant capital investment to sustain the growing market. The growth–share matrix can offer a powerful and compact picture of the strengths of businesses in the firm’s portfolio by identifying the capacity of each business to generate revenues and also revealing the requirement of investment for each business, thereby assisting in balancing the firm’s financial flow by assessing the distinct characteristics of each business and suggesting strategic directions for each business. While developing the firm’s business portfolio for more than one period, movement of businesses within the growth–share matrix can also be considered. The ideal sequence may be one where a “question mark” business captures the market to become a “star” at the first stage, and in the second stage there may be saturation leading to a decline in growth rate but retaining of competitive strengths required to become a “cash cow.” In the final stage, a business may lose its market relevance and become a “pet,” and the firm could consider divesting from such businesses. An effective strategy for expediting the process of business diversification and developing a suitable business portfolio may emphasise businesses where there is a strong growth rate accompanied by potential to achieve high market share (“star” businesses and “question mark” businesses which may become “star”) (see Figure 13.10). Growth–Share Matrix – PSU Perspective NTPC (with its subsidiaries) has a 27% share of India’s thermal installed capacity and generated 24% of the total country’s electricity generation during 2021–2022. CIL carters 80% of its total supply to the power sector and produces over 83% of the country’s total coal output. PSUs enjoy a dominant market share and are likely to invest strategically in the businesses to establish their presence as a relevant market player and maintain their economic relevance. The growth–share matrix can factor the time sensitivity of a business considering related market share and growth over a considerable period to help develop a business portfolio for PSUs by guiding investment into businesses that may offer high growth and large market share. 230 Saarthak Khurana et al. Recommendations and Way Forward Business Recommendations Considering this global shift, along with India’s climate commitments, PSUs like CIL and NTPC will need to factor in the transition-linked impacts on their businesses and growth plans. Such diversification would not only de-risk the long-term financial position, particularly cash flows, but also provide the opportunity to become a lead change maker and thereby uphold their dominant position in the energy and economic sphere of India. Keeping this in consideration, key recommendations for strategic realignment are: • Addressing climate-related physical and transition risks by evaluating existing and planned investment in assets judiciously, factoring in their long-term potential and necessary costs on transition technologies or future market compliance. • Remaining relevant and maintaining competitiveness by prioritising low-carbon investments at an early stage to gain market dominance to deliver sustained growth and avoid competitive pressures. • Incorporating national targets in business strategy and leading the change by imbibing the government’s initiatives, targets, and climate commitments alongside their objectives of fuelling the country’s growth and ensuring its energy security. Way Forward Any strategic action and investment decisions taken by the country and in turn by these public sector enterprises to decarbonise their operations will have a significant impact on the pace of India’s transition to a low-carbon economy. Indian PSUs can leverage their current position to invest and gain dominance in businesses likely to benefit from transition. Riding on the growing policy support and a strong financial base, reformulation of existing and future business models could lead to significant strategic advantages. Such STAR CASH COWPET QUESTION MARK High High Low Growth Market Share ? $ Figure 13.10 Growth share matrix to determine suitable business portfolio. Source: Recreated from: BCG (1970). 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International Institute for Sustainable Development. https://www .iisd .org /system /files /2021 -07 /mapping -india -energy -subsidies -2021 .pdf 232 Saarthak Khurana et al. Appendix 13A Economics of Coal-Fired Power Plants Abhishek Raj The capacity utilisation of India’s coal-fired power plants (called coal plants henceforth) has declined over the last decade due to excess capacity, lower-than-expected growth in demand, and rapidly increasing share of renewables. The Central Electricity Regulatory Commission prescribes a Plant Load Factor (PLF) of 85% for recovery of capacity charge, whereas the average PLF of coal stations in India was 58% in FY22 and has been below 80% since 2010, and continuously declining (Ministry of Power, 2023). Apart from excess generation capacity in the system, renewables also have must-run status. As a result, high renewable energy generation periods necessitate coal plants backing down generation. As India embarks towards its 2030 target of 500GW of non-fossil capacity, the PLF of new coal plants is likely to remain low. The draft National Electricity Plan 2022–2027 estimates a PLF of 55% in 2026–2027 marginally increasing to 62% in FY 2031–2032, under optimistic demand growth conditions (CEA, 2023). To determine the future electricity mix that minimises the cost of generation, it is important to replace the practice of assuming an 85% PLF while estimating the cost of electricity from new coal plants with more realistic assumptions on utilisation and conditions of operation. Low-capacity utilisation significantly increases the per-unit cost of coal generation. Per-unit fixed cost of electricity increases as capacity charges are paid for plant availability and not actual dispatch. Variable costs also increase due to lower efficiency on account of increased station heat rate. With a future electricity mix dominated by renewables, especially solar, coal plants will often be forced to operate at a technical minimum during the daytime, with significant flexibility in operation. Operating in low-loading conditions will add to Operation and Maintenance (O&M) cost and will require investments for retrofitting to meet flexibility requirements. It usually takes 5–7 years for a coal plant to complete construction. Any new coal plant construction starting in 2023 is unlikely to commence operation before 2028–2030. Table 13.3 depicts levelised cost of electricity (LCOE) of hypothetical new coal plants at different load factors, based on capital expenditure requirements specified in the National Electricity Plan. Table 13.3 Levelised cost of electricity of coal plants Pithead coal plant Year of commencement (Rs./kwh) 2028 2029 2030 LCOE at 85% PLF 5.31 5.43 5.56 LCOE at 60% PLF 6.41 6.56 6.72 LCOE at 55% PLF 6.75 6.91 7.07 Future-Proofing India’s Coal PSUs 233 Scalable Renewable Energy (RE) Alternatives to Coal Power Plants Solar and wind energy have a lower per-unit cost of electricity when compared to coal but are infirm sources, subject to variability. Energy storage technologies solve these limitations and can serve as an effective replacement for new coal plants being built to meet demand peaks that cannot be met by RE. The price of lithium-ion batteries has declined significantly over the last decade and is expected to decline further. However, in 2022, battery prices went up due to the rise in the price of raw materials. This price rise is expected to be temporary, but it has led to an increased focus on developing alternative chemistries for gridscale storage, such as sodium-sulphur, sodium-ion, and liquid metal amongst others. In 2020, ReNew Power won a bid put out by Solar Energy Corporation of India to supply Round-the-Clock (RTC) power at Rs 3.6/kWh levelised tariff. The project will supply power at an 80% PLF with a minimum 70% monthly utilisation, comparable to coal plants. The 400MW RTC project is likely to be supplied by 900MW of wind and 400MW of solar, supplemented by 100MWh of battery storage (Mercom, 2022). The project oversizes the RE project to supply the contracted amount of RTC. Oversizing RE projects without storage is also possible but the size of RTC supply will be smaller. Oversizing RE projects for RTC supply have limitations, as reliable alternatives for selling excess generation are required for project feasibility. In addition, there have also been auctions that blend renewables with conventional sources such as hydro and thermal power, with a minimum guaranteed supply from renewables. Renewable power paired with significant storage capacity will soon be cost-competitive with new coal, with steep learning curves being observed in renewable and storage costs. According to the draft NEP, capital expenditure for 5 hours of storage (adjusted upwards for depth of discharge) is expected to drop from 9.3 Cr/MW in 2022 to 5.24 Cr/MW in 2030. Table 13.4 depicts the Levelised Cost of Storage (standalone, not paired with RE) estimates as per NEP assumptions. The choice between coal and renewables for meeting the peak load while minimising the cost of generation requires multiple considerations. The year of capacity addition, size of additional capacity required, and demand in non-solar hours have implications on the choice of alternatives. RTC auctions with oversized RE have proved to be more economical than coal power and can be used to meet some of the incremental demand before large-scale energy storage becomes viable. However, Table 13.4 Levelised cost of storage Storage (5 hours) Year of commencement (Rs./kwh) 2028 2029 2030 LCOS 5.66 5.35 5.05 14 Introduction In India, thermal power plants produce almost 60% of the total CO2 emissions. The majority of the thermal power in India is generated from non-renewable sources such as coal, lignite, diesel, and natural gas. Coaland lignite-based thermal power generation has been the backbone of power generation because of their abundant supply. Coalbased thermal power plants (TPPs) in India are less efficient than the power plants in other developed countries. This is due to the quality of fuel used for power generation. Even though the Indian coal-based fuel for TPPs has low calorific value and high ash content in comparison to that of gas-based fuels, it is highly unlikely for India to make a shift to gas since accessibility and affordability are key factors. The carbon intensity of the Indian power sector is higher than the global average. Along with that, India’s coalbased electricity generation has rebounded strongly by 13% in 2021 after a decline of 3.7% in coal generation in 2020 (IEA, 2022). Since the thermal power sector is very important for the functioning of the country, it is crucial to analyse energy use (in)efficiencies that exist in this sector and to understand how to alleviate them. The 12th five-year plan (2012–2017) has recognised peak electricity demand and deficit and has encouraged private sector investments to make the country self-sufficient in terms of electricity and to reduce energy imports. Therefore, to achieve such energy sufficiency and reduce emissions it is crucial to estimate and understand the energy use efficiency levels of the TPPs located across several Indian states. It is of significant interest to understand the behavioural dynamics of the power sector, which can possibly answer important questions about the country’s electricity needs and about how CO2 emissions can be reduced in this sector. Achieving a higher energy use efficiency of the power plants will not only reduce emission to a large extent and make them sustainable, it will also make them competitive globally. This study makes an attempt to estimate energy use efficiency of the Indian thermal power plants adopting a Data Envelopment Analysis framework. State-level data on electricity generation and fuel utilisation is used for the period 2018–2019 and 2019–2020. The empirical results show that for the years 2018–2019 and 2019–2020, an overall input reduction of 13% and 15%, respectively, is feasible to generate electricity with the given inputs and technology indicating that a significant amount of emission reduction is possible just by improving the energy use efficiency of the power plants. This chapter is organised as follows. A brief literature review is presented in “Literature Review.” An overview of the thermal and renewable energy sectors is presented in Thermal Power and Renewable Energy Sectors. The data and methodology used are 14 Evaluation of Energy and Environmental Efficiency of the Indian Thermal Power Plants A State-Level Analysis Sabuj Kumar Mandal This chapter has been made available under a CC-BY-NC-ND license. DOI: 10.4324/9781003433088-18 10.4324/9781003433088-18 [Document text truncated for crawler view.]