Big Story: Climate champion India ramps up funding for coal-bed methane

The Indian government has walked the tightrope when it comes to the future of India’s energy sector – projecting the country as a global leader in renewables, while simultaneously seeking to expand thermal power capacity and delaying environmental safety norms for power plants. Now, however, distress across India’s power sector and poor investor confidence is forcing the government to prioritise and the 2019 Union Budget is the clearest sign yet that India’s bet is on coal and coal-bed methane (CBM).

Renewable industry expectations, buoyed by the $330 billion pitch in the Economic Survey 2018-19, remained unmet by the budget. While there was no mention of any stimulus package to spur growth, allocations towards expansion of renewables were increased by a paltry 2.1% — from Rs5,146.63 crore to Rs5,254.83 crore. 

In sharp contrast, allocations to the Ministry of Coal have increased by over 48% compared to last year. Interestingly, the biggest increases have been towards exploration of coal and lignite — a monumental increase of nearly 500% — from Rs 159.28 crore in 2017 to Rs 937 crore this year. What’s worrying is that despite the increases, outlays for conservation, safety and infrastructure development in coal mines have fallen by about 30%.  Ostensibly, the increase in outlays is to facilitate exploration of CBM for India’s future energy needs. The country reportedly has CBM reserves of up to 948 billion cubic meters and since the rules were relaxed last year, several joint ventures are reportedly in the pipeline for CBM, including some global partnerships. Yet, methane itself is a devastating greenhouse gas, and India’s forays into the fuel have previously been questioned by none other than the chairman of the State Bank of India. Given its coal plant stranded assets and India’s NDCs, this new step could get murky.