Coal transition in India. Assessing India's energy transition options - 2018

Coal meets 30% of the world's energy needs and generates 41.1% of world's electricity (WCA, 2016). India is currently the third largest power producer using coal and third largest coal importer in the world. The Indian population is characterized by low levels of consumption of modern energy (880 KWh/capita/year) by international standards. Nevertheless sustaining one of the fastest GDP growth rates in the world currently at above 7% per annum, India is well on track to meeting and may be surpassing its NDC Paris commitments for 33-35% reduction in GHG intensity of its GDP during 2005-2030 (around 25% reduction done during 2005-2014) and 40% share of non-fossil electricity capacity by 2030 (around 30% by 2017 already). Coal, however is projected to remain the mainstay of Indian energy systems at least until 2030. Global energy markets are experiencing a shift away from coal as a result of international agreements, national climate policies, increasing regulatory and political constraints on coal, and competitive pricing in alternative fuels. However coal transitions especially in coal dependent economy like India will be challenging, mainly due to energy security concerns and national targets (which are aligned with SDGs) on universal electricity access, housing, health, and education by 2022. Near-term transitions away from coal therefore seem difficult. However we analyse alternative decarbonization pathways and explore their impacts on energy systems, and subsequently the coal sector. Bottom-up techno-economic model, AIM/Enduse is used to conduct sectoral analysis to assess the carbon dioxide emissions, energy mix across various sectors and coal consumption under NDC and 2 deg. C scenarios (2 deg. C-conventional and 2 deg. C-sustainable). Our analysis provides insights on revising the Indian NDCs to possibly raise their overall ambition levels. The report addresses key debates on a) the future of coal in Indian energy systems, b) its influences on international coal trade, c) possibility of resultant stranded assets, and d) impact of critical natural resource such as water on coal-related assets