China & India: Breaking New Records in Coal-Powered Generation
Thumbnail image: Photograph from The Curse of Coal by Supratim Bhattacharjee. See the whole collection Here.
In the closing stages of the COP26 climate negotiations in Glasgow, Scotland in November 2021, those watching the live feed could see the dramatic developments as Indian negotiators, with support from China, forced through the compromise that changed the Glasgow Climate Pact language from a new commitment to “phase out” coal to a weaker formula that only committed parties to “phase down” the use of coal.
The report of the International Energy Agency (IEA) “Coal 2021 – Analysis and Forecast to 2024” sheds new light on the persistent strength of the reliance on coal by the world in general, and by China and India in particular. This has major implications for the viability of achieving the world’s Paris Agreement target of limiting the increase in world temperature to 1.5oC.
Key messages from the IEA Coal 2021 report are that -
“The 2020 collapse in coal demand [due to the downturn from the COVID-19 pandemic] turned out to be smaller than anticipated.
Coal-fired power generation is set to reach an all-time high in 2021 (an increase of 9% in 2021, with estimated increases of 12% in India and 9% in China).
China continues to dominate global coal trends.
Global coal demand may well hit a new all-time high in the next two years.
“Based on current trends, global coal demand is set to rise to 8 025 Mt in 2022, the highest level ever seen, and to remain there through 2024.”
Coal production is set to rise to its highest ever levels in 2022.
The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action.
Momentum behind net zero has grown, but the era of declining emissions is moving further away.”
CHINA AND COAL
In our blog ‘IEA and IPCC Reports: Are Governments and Businesses in Denial? Part 2’ we noted that China has 1,082 operation coal fired power stations, and 53% of its power is generated from coal.
The IEA Coal 2021 report states that –
…”China’s influence on coal markets is difficult to overstate. China’s power generation, including district heating, accounts for one-third of global coal consumption. China’s overall coal use is more than half of the global total. Coal demand in China is underpinned by fast growing electricity demand and the resilience of heavy industry.”
…”This is despite a decade of strong and sustained efforts to diversify the country’s power mix – during which China has expanded hydro, wind, solar and nuclear power capacity by more than any other country in the world – and intensive switching from coal to natural gas in the residential heating and light industrial sectors. China is also the world’s largest coal producer and importer, with domestic price swings from supply-demand imbalances immediately impacting international markets.”
China’s Nationally Determined Contribution (NDC) puts the case on climate change in these terms –
“Climate change is a grim challenge facing all mankind. Human activities since the industrial revolution, especially carbon dioxide (CO2) emissions from large-scale fossil fuel consumption of developed countries, have led to a drastic increase in the concentration of greenhouse gases (GHGs) in the atmosphere. As a result, global climate change has been aggravated, posing a huge threat to global ecosystem security and socio-economic development of developing countries. Man and nature form a community of life. Addressing climate change is a common cause of the human race. It requires the international community to uphold multilateralism, pursue green and low-carbon development, and jointly build a community with a shared future for mankind. “
The China NDC also reports that –
“On September 22, 2020, President Xi Jinping declared, at the General Debate of the 75th Session of the United Nations General Assembly, that China would scale up its Nationally Determined Contributions (NDCs) by adopting more vigorous policies and measures, and aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. On December 12, 2020, President Xi Jinping announced some further commitments for 2030 at the Climate Ambition Summit: China will lower its CO2 emissions per unit of gross domestic product (GDP) by over 65% from the 2005 level, increase the share of non-fossil fuels in primary energy consumption to around 25%, increase the forest stock volume by 6 billion m3 from the 2005 level, and bring its total installed capacity of wind and solar power to over 1.2 billion kW. “
President Xi Jinping also announced before the COP26 climate summit that China would stop financing overseas coal-fired power stations, which was in itself a very significant commitment. Yet on the 28th Dec 2021 China brought online the first (of four) 1,000 MW units of the Shanghaimiao coal fired power plant, in Inner Mongolia. Thomson Reuters reports that China may build as much as 150GW of new coal-fired capacity in 2021-2025, bringing its total to 1,230 GW.
INDIA AND COAL
A man digs for coal in India. Photograph from The Curse of Coal by Supratim Bhattacharjee. See the whole collection Here.
In our blog on ‘Coal, Climate and COP26 as seen from India – an interview with Vikrant Srivastava’ we noted that -
“Coal India Limited is the largest coal-producing company in the world, with 272,445 employees, and on 23 January 2021, coal produced 78.6% of India’s total power generation. The company’s website states that “CIL is a Maharatna company – a privileged status conferred by the Government of India to select state-owned enterprises in order to empower them to expand their operations and emerge as global giants.”
Prime Minister Narendra Modi announced before the conclusion of the COP26 climate summit that India would set targets of deriving 50% of its energy from renewables by 2030, and a target of net zero emissions by 2070: calling at the same time for $1 trillion in financial support for India’s energy transition.
However, Climate Action Tracker rates India’s contribution and climate plans overall as “Highly Insufficient”, and adds that –
“Based on current coal expansion plans, India’s coal capacity would increase from current levels of over 200 GW to almost 266 GW by 2029-2030, with 35 GW expected to come online in the next five years: an increase of 17.5% in coal capacity. India’s coal-fired power plant pipeline is the second largest in the world and is one of the few to have increased since 2015. A recent move to increase domestic coal production has opened coal mining to private investors, risking a fossil fuel lock-in as well as harm to areas of ecological significance. To get on a 1.5°C emissions pathway, it is important for India to phase out old, high-capacity power plants with lower efficiency and higher emissions, and stop any new coal capacity additions.”
Climate Tracker goes on to explain how India provides both fossil fuels and renewable energy with direct subsidies, fiscal incentives, price regulation and other government support, but that coal subsidies are 35% higher than those for renewables. It also notes that India has yet to submit updated targets in its Nationally Determined Contribution (NDC) to the UNFCCC.
IMPACTS OF ‘FULL STEAM AHEAD’ COAL POLICIES
One of the interesting factors about climate change is that the impacts are being felt in every single region of the world, without exception, and whatever the preferred system of government, be it America under President Trump or President Biden, President Xi Jinping’s China or Prime Minister Narendra Modi’s India. At some point it must become clear that this is a pressing problem for the whole world.
For example, the report of Working Group I of the IPCC published in August 2021, and endorsed by 195 country governments, had this to say about the region comprising China –
“East Asia (EAS, ECA)
Daily precipitation extremes have increased over parts of the region (high confidence). Heavy precipitation will increase in frequency and intensity (high confidence), leading to more frequent landslides in some mountain areas.
Droughts have become more frequent in much of continental East Asia while arid Eastern Central Asia has become wetter (medium confidence).
The rate of intensification and number of strong tropical cyclones have increased (medium confidence), and tropical cyclone tracks likely migrated poleward. “
The same Working Group I report from the IPCC said this about the region comprising India -
“South Asia (SAS)
Heatwaves and humid heat stress will be more intense and frequent during the 21st century (medium confidence).
Both annual and summer monsoon precipitation will increase during the 21st century, with enhanced interannual variability (medium confidence). “
There are too many brilliant scientists in China and India (including the Chairperson of the IPCC, Hoesun Lee) to escape the obvious truth that the impacts listed above are only the start of the full climate impacts that will be felt in those parts of the world, and many others.
Indian climate negotiators returned from COP26 to spectacular smog in Delhi, vying for the title of the worst air quality in the world. Chinese climate negotiators will have been well aware of the terrible flooding in Zhengzhou in July 2021, where 300 people lost their lives. And record temperatures in the Russian Arctic, In Alaska and British Columbia, melting ice sheets in Antarctica, searing droughts, wildfires and flooding in many other parts of the world are constant reminders of what needs to be done and by when.
None of this suggests that other countries do not need to be equally determined to plan a way out of fossil fuel reliance in general and coal in particular. In the run-up to COP26, the Powering Past Coal Alliance reported that “Ukraine, Chile, Singapore, Mauritius, Azerbaijan, Slovenia and Estonia head list of 28 new PPCA members.” At COP26 itself Denmark and Costa Rica launched the Beyond Oil and Gas Alliance aimed at applying the same logic to those other fossil fuels.
Yet there are still outliers and holdouts at the level of both governments and corporations.
Australia has been fairly clear about its intention to continue to profit from coal while the planet warms, with Prime Minister Scott Morrison of Australia stating that the industry would still be operating for “decades to come”. Corporations such as Glencore have continued to amass coal assets as they are divested by other groups, and with earnings from coal running at $6 billion a year during the current energy shortages, the company is leaving it to others to worry about climate change. Electorates, trading partners and civil society (in democracies) can influence governments. Governments, financial regulators, international and national laws and shareholder action can influence corporations.
It is simply the scale of Chinese and Indian reliance on coal that poses a major economic problem in planning and executing an energy transition. Their success in being encouraged to address this effectively is critical for those countries, and for every other country.
As the IEA’s Executive Director Fatih Birol puts it –