IN DELHI to participate in the Sustainable Development Summit, Carl Pope, a veteran environmentalist and chairman of Sierra Club, one of the world’s oldest environmental conservation organisations, tells Kunal Majumder why coal is no longer a viable option to meet India’s growing energy needs.
You have been advocating that coal is no more an economically viable source of energy. Could you explain how you arrived at this conclusion?
In the past three years, the price of imported coal has tripled. The price of copper wire, the other main ingredient in the conventional grid, has tripled as well. On the other hand, the price of solar panels and LED bulbs has gone down. There has also been a phenomenal shift in the relative cost of renewable power versus the relative cost of fossil power. The reason the price of coal has gone up is because of growth and demand. There is a certain amount of cheap coal in Asia that is already being used. So when you build a new power plant, you cannot source cheap coal because it is being already used by existing power plants. New power plants have to source very expensive coal. Both India and China were purchasing low-cost coal from Indonesia. But when Indonesia realised it was selling coal at very low cost, it decided to not sell below the market price.
Looking ahead, importing coal is going to be very expensive. By building more coal plants, India and China are indirectly contributing to the rise of coal prices that they will only have to pay. If they build twice as many coal plants, they will have to pay six times for the coal. Asia has not run out of coal, it has run out of cheap coal.
Going forward, every coal plant that India and China build will not only raise the cost of new plants but also that of existing plants. This doesn’t mean that India should shut down its coal plants. It means India should build as few coal plants as possible and understand that every plant it builds raises the price of coal further.
But aren’t sustainable sources like wind and solar power expensive compared to coal?
Wind may be more expensive than cheap coal. But wind is less costly than expensive coal. Solar power, at this time, is slightly cheaper than expensive coal. Wind power is a lot cheaper. A mixture of wind and solar could turn out to be even cheaper. Forget the environmental impact; this is about providing maximum electricity at lowest cost. We should be pushing harder for energy efficiency. There should also be a serious effort to deploy solar power where it is already cost competitive. India really needs a Wind Mission. This could dramatically reduce the amount of new coal that India needs. This, in turn, will make India’s coal bill and energy bill much lower in the future.
The government has been portraying nuclear energy as the ‘sustainable’ alternative to fossil fuel. They argue that the cost would go down if there is mass production.
This theory has never worked in practice. In practice, it turns out, there are two things that make nuclear power plants expensive. First is the enormous amount of cement and steel involved in the building of the plant. As you build these plants, you drive up the cost of cement and steel. If you build a lot of nuclear plants at once, you will suddenly place a lot of orders against a limited manufacturing capacity and then raise the price. There is a failure in the energy sector to look at the marginal prices. Everybody wants to just look at average prices. Nobody pays average prices: you pay a marginal price. The second problem with nuclear power plants is the time taken to build them. You are borrowing money for 5-10 years to build a nuclear plant. You are not getting anything back. Look at solar panels: You will be generating electricity in a month. I can build a plant in western Gujarat in two years. Nowhere in the world has anyone built large nuclear plants that have made economic sense.
What are the three things the Indian government must do in the energy field to gain resource optimisation as well as environmental sustainability?
The first thing that the Indian government should do is recognise that it should be driving most of the power sector investment into areas that will generate marginal KW of electricity at the lowest rate. There is a need to set up a system in which investment is driven by true marginal cost. The second thing you need to recognise is that you have a crisis — the whole model India had planned to fulfil growth with Rs 2/unit coal-fired power has collapsed. You are running your power plant at half the capacity — that’s a crisis. The government needs to undertake mechanisms to meet the electricity shortfall. The third is the need to have an integrated, efficient system. In the present system, half of the power goes waste, whether through leakages during transmission or farmers destroying groundwater and wasting it. India cannot afford to be wasteful. India is a country of 1.2 billion people with heavily depleted natural resources. I think the two biggest existentialist threats that India faces are groundwater depletion and the carbon import bill.
Published in Tehelka: http://www.tehelka.com/story_main51.asp?filename=Ne180212coal.asp