The time has come to worship the black rocks beneath our soil. India needs approximately 160,000 megawatts of electricity in the coming decade to be able to sustain its phenomenal growth rate. Conveniently enough, we have one of the largest coal reserves in the world. Unfortunately Indian coal is not of good quality as it has a high ash content. Much of our coal fields are also under developed (perhaps we should be thankful for this as these resources lie beneath our dwindling forests and tiger habitats) which makes us import from places like South Africa and Australia. That aside we know that coal will continue to play a major role in India’s economic growth and development for the coming decades. And as the government tries to rapidly electrify the entire nation by 2012 (as currently 500 million people are without access to electricity in rural areas) the need for power supply expansion is obvious. Add to that the fact that every urban center experiences power outages affecting business and agriculture both it is not surprising that we are seeing the approval of finances for Tata’s 4,000 Megawatt “Ultra Mega” Power Project at Mundra port in Gujarat.
The estimated cost of this project is $4.2 billion and the International Finance Corporation, part of the financing wing of the World bank is footing $450 million of that (Rs. 1,800 crore). This in conjunction with the Asian Development Bank ($450 million), Korean ECA ($800 million), “local banks” ($1.5 billion), and “an equity component” of $1 billion. The beneficiaries are expected to be the industrial and agricultural users along with 1.6 crore domestic households. The juice will be zapped through power lines into five states in western and northern India. Just imagine the gap between demand and supply this will fill! Or will it? Perhaps demand will never meet up with supply as the Indian middle class grows along with their ambitions to own more ACs, refrigerators, and electronic gadgets. Never mind that people in villages are still struggling to have electricity to read. The truth is that there is a very serious climate injustice at play here. Can India continue to just justify the need for more power in the name of the 500 million without access when an “electrified village” equates to just 10% of the households in the village having access to the grid? Meanwhile the demand in the urban areas continues to soar…
Will the electricity really reach the rural poor? Will the poor even be able to afford electricity at time when we are seeing a restructuring of the power system to reduce transmission and distribution costs (which have been as high as 50% in many places and only now begun to come down in states like Rajasthan and a few others)?
It is said that super critical technology is being implemented in the construction of this power plant (the first of which will be operational by 2011 and the other units plugging into the grid in installments of every 4 months). This will make the coal power plants 40% more energy efficient at turning the black mineral into energy than the average power plant in India is currently able to manage. Also, it has already been estimated that the plant will emit 23 million tonnes of carbon dioxide annually. The IEA stated at a side event in Bali last December highlighting the importance of China and India in the emerging energy scenario that for serious cut backs on global green house gas emissions, by 2012 we could no longer build any more thermal power plants that emit any CO2. Everything from that point on would need to be zero-emission and from there on a gradual reduction in emission from overall power generation as the global economy transitioned into renewables. But does this leave enough time and space for rapidly emerging economies (not to mention the least developed countries LDCs) to get cheap energy to grow and bring millions out of poverty? Who will finance zero emission coal plants or the transition into a completely zero-carbon growth path?