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India’s Coal Stance at COP28: Implications for Power and Renewables

Introduction:

India has rejected proposals at COP28 climate summit to phase out unabated coal power, which lacks carbon capture systems. The government stated energy security and availability considerations amidst rising demand, make replacing coal challenging currently.

Analysis for a Layman:

Coal fuels over 50% of India’s electricity needs due to its stability and cost-effectiveness. But burning coal emits greenhouse gases, raising environmental concerns. At the UN’s annual climate change conference, India faced demands to phase out old coal plants lacking emission reduction systems.

But India refused as its energy needs are growing rapidly. Renewable sources like solar and wind remain unreliable 24×7. New technologies to store renewable power or capture coal plant emissions are still very expensive. So India will continue adding both renewables and coal power capacity up to 2030 to ensure affordable, reliable electricity access while trying to lower overall emissions.

India's Coal Stance at COP28

Original Analysis:

India’s pragmatic stand balances the country’s development needs with environmental obligations. Rapid economic growth and expanding electricity access warrant a diverse energy portfolio spanning renewables and thermal power. This thrusts greater onus on developed nations to curb emissions faster.

But continuing coal expansion risks making India’s renewable targets more challenging. It also exposes the country to potential border taxes proposed on carbon-intensive imports. Domestically though, power utilities investing in coal-based capacities stand to benefit from sustained policy support.

Impact on Retail Investors:

For retail investors, India’s stance ensures public sector power utilities like NTPC and Coal India retain policy relevance keeping electricity costs low. This aids overall economic competitiveness.

However, private renewable players may see dampened investor sentiment given lower certainty on long-term coal substitution. Returns also remain susceptible to potential carbon penalties in key export destinations.

Impact on Industries:

The steadfast coal focus mainly benefits domestic coal producers, equipment providers, and EPC companies catering to thermal power plants in the near term. States with coal reserves also gain from sustained royalty revenues.

However, the messaging could moderately dampen investor outlook on India’s renewable expansion commitments. Careful balancing would be needed to avoid constricting private capital inflows into mainstreaming green technologies.

Potential Gainers:

  • Coal India, NTPC, PowerGrid – Sustained policy support for coal capacities
  • BHEL, L&T – Thermal power plant equipment manufacturers benefit

Potential Losers:

  • Tata Power Renewables, Adani Green – Investor sentiment affected on coal substitution paths

Conclusion:

India’s practical coal stance secures energy access while buying time for storage breakthroughs. But continued thermal capacity risks higher emissions and trade barriers. Maintaining renewable enthusiasm alongside needs concerted policy flamekeeping.

Citation: Samant, Shilpa. “‘Can’t Phase Out Coal Power Until Storage, Tech Viable’.” The Economic Times, 11 Dec

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