Reducing stranded assets through early action in the Indian power sector

Aman Malik,Elmar Kriegler,Mark Roelfsema,Shinichiro Fujimori,Gunnar Luderer,Zoi Vrontisi,Saritha Vishwanathan,Jacques Despres,Christoph Bertram,Johannes Emmerling,Ritu Mathur,Amit Garg,Swapnil Shekhar

doi:10.1088/1748-9326/ab8033

Abstract

Cost-effective achievement of the Paris Agreement’s long-term goals requires the unanimous phase-out of coal power generation by mid-century. However, continued investments in coal power plants will make this transition difficult. India is one of the major countries with significant under construction and planned increase in coal power capacity. To ascertain the likelihood and consequences of the continued expansion of coal power for India’s future mitigation options, we use harmonised scenario results from national and global models along with projections from various government reports. Both these approaches estimate that coal capacity is expected to increase until 2030, along with rapid developments in wind and solar power. However, coal capacity stranding of the order of 133–237 GW needs to occur after 2030 if India were to pursue an ambitious climate policy in line with a well-below 2 °C target. Earlier policy strengthening starting after 2020 can reduce stranded assets (14–159 GW) but brings with it political economy and renewable expansion challenges. We conclude that a policy limiting coal plants to those under construction combined with higher solar targets could be politically feasible, prevent significant stranded capacity, and allow higher mitigation ambition in the future.

Highlights

IntroductionThe foremost step to reach the goals of the ParisAgreement is rapid electricity sector decarbonisation, leading eventually to a zero-emission energy supply system by mid-century (Rogelj et al 2018, p. 129)
For a budget corresponding to 1.5 ◦ C, Indian coal power plants alone are projected to use 11% of the remaining carbon budget (supplementary information (SI), section 3, figure S3)
Continued investments in coal power plants and associated networks are increasing carbon lock-ins, defined in the literature as the inertia induced by fossil-related infrastructure and institutions, which reduce the prospects of alternatives to emerge and grow (Unruh 2000, Erickson et al 2015)

Summary

Introduction

The foremost step to reach the goals of the ParisAgreement is rapid electricity sector decarbonisation, leading eventually to a zero-emission energy supply system by mid-century (Rogelj et al 2018, p. 129). For a budget corresponding to 1.5 ◦ C, Indian coal power plants alone are projected to use 11% of the remaining carbon budget (supplementary information (SI), section 3, figure S3). Continued investments in coal power plants and associated networks (mining and transportation) are increasing carbon lock-ins, defined in the literature as the inertia induced by fossil-related infrastructure and institutions, which reduce the prospects of alternatives to emerge and grow (Unruh 2000, Erickson et al 2015). In the absence of a strong climate policy, they cause extra near-term emissions, and reduce medium to long-term mitigation potential This strains thereby the limited carbon budget and makes long-term mitigation measures both more expensive and challenging by increasing the reliance on carbon dioxide removal technologies (Bertram et al 2015a, Luderer et al 2016, 2018). Cost reductions in alternative power technologies, especially renewables could render some of current investments in coal power generation stranded assets even without climate policies (Mercure et al 2018)

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Conclusion