India could wind up leading ASEAN’s clean coal charge
Anniversaries are always a time for both reflection and preparation, and India’s 69th Republic Day will be no different. On January 26, all 10 ASEAN members will attend a major summit in New Delhi to celebrate seven decades of Indian constitutional democracy. All sides will, of course, celebrate that past with one eye firmly set on their own present and future interests.
For India, the decision to invite the whole of the Association of Southeast Asian Nations falls squarely within its “Act East” Policy of expanded economic ties, security cooperation, and regional integration. Prime Minister Narendra Modi has ample reason to focus on deepening India’s economic connections to the ASEAN group.
Bucking the trends of unprecedented political uncertainty and lackluster economic performance in the West, average annual growth across the ASEAN region surged to 5.1% (a four-year high) in 2017. Strong demand, planned infrastructure projects, and economic reforms mean that growth shows no sign of slowing down.
Not that GDP growth figures tell the whole story of a country’s economic health. India’s own projections for 2018 stand at what may seem like an impressive 6.5% growth in gross domestic product, but that pace fails to represent the serious “jobs problem” weighing on Modi’s economic policies and electoral chances.
Indian and ASEAN leaders will discuss a range of joint issues at the summit (such as handling an increasingly assertive China), but one major challenge both sides face is the energy demands that could throttle their breakneck economic expansion.
Energy poverty in India, ASEAN
The scale of those needs is daunting. The International Energy Agency (IEA) predicts that India alone will account for nearly 30% of the entire global increase in energy demand through 2040. India’s share of worldwide energy use in 2040 (11%) will still not have caught up with its projected 18% share of the overall global population.
The IEA also projects strong growth in energy demand in Southeast Asia over the same period, with the size of the regional economy tripling over the next 22 years.
For all that growth, both sides will continue to struggle to overcome energy poverty. A total of 240 million people in India and 65 million people in Southeast Asia currently do not have access to electricity. Renewables-focused schemes like Modi’s use of solar panels to electrify remote villages have failed to solve the problem.
That helps explain why both Indian and ASEAN officials are so candid about their long-term intentions to rely on coal and fossil fuels to ensure a reliable supply. India plans to double coal production to 1.5 billion tons by 2020. Between now and 2022, the electricity India generates from coal is expected to grow by nearly 4% annually. “Coal is at the center of everything,” stresses Partha Bhattacharya, former chairman of Coal India Ltd. “You can’t live without coal.”
Indonesia also aims to add 35 gigawatts of energy capacity by 2020, with 70% of the increase to come from coal-fired energy. Taking the whole of ASEAN into consideration, soaring consumption means demand for coal is projected to account for some 34% of total primary energy demand by 2040. To meet that demand, ASEAN’s imports of fossil fuels will grow across the board. Despite substantial coal production in Indonesia, the region will actually become a net importer of coal.
While environmental campaigners debate the impact of those trends on global climate efforts, regional leaders are more immediately concerned with lagging electrification. India has set a target of 100% electrification by December this year, and Indian officials have expressed skepticism over the ability of renewable energy sources to meet such a target.
The government’s chief economic adviser, Arvind Subramanian, has described moves to phase out the country’s chief source of energy “unconscionable.” As a result, existing power plants have received a nudge to boost output from existing capacity.
Within ASEAN, four member states account for 95% of those still left off the grid: the Philippines, Myanmar, Cambodia and Indonesia. In 2020, only 71% of Myanmar’s populace will have electricity. In 2030, that number should rise to 97%.
Clean coal alliance
The leaders gathering in New Delhi are thus counting on coal to achieve universal access while holding to their obligations to reduce carbon emissions. This helps explain why India has become one of the world’s most active proponents of the US-sponsored “clean coal alliance” to promote the use of clean coal technologies (CCT) like carbon capture and storage (CCS) or utilization (CCU). The alliance spans six continents and seeks to render cutting-edge technology more affordable to coal’s main consumers.
For India’s heavily polluted major cities, the need to reduce emissions from coal energy is urgent. Indian coal-fired plants are some of the most inefficient and polluting in the world; 80% of them are on obsolete technology. The adoption of high-efficiency low-emission (HELE) technology has been suggested as something of a middle ground for Indian policymakers. The IEA, for its part, insists that CCU and CCS need to be made urgent priorities.
In either case, ASEAN ministers will make natural allies in the Asia-wide clean-coal movement that seems to be taking shape. Last year, the bloc issued a statement to promote CCT use, acknowledging the “continued role of coal” in shoring up energy security, economic competitiveness and environmental sustainability throughout the region.
As one of the continent’s two emerging economic heavyweights and a key economic partner for the whole of ASEAN, Indian support of CCT could exercise considerable influence over ASEAN’s energy policies and the makeup for its energy mix moving forward.
Even as the global energy debate focuses on Donald Trump and the United States, the leaders of the world’s fastest-growing economies will shake hands this month having already embraced an enduring role for coal and other fossil fuels.
How exactly they choose to translate those decisions into reality will have an immense impact on the future of the agreement arising from the 2015 United Nations Climate Change Conference (COP21) and the long-term outlook for global emissions.