‘Bizarre Logic’? Economic Survey bats for coal over renewables, cites ‘social costs’

• Survey: social cost of renewable energy far higher than what their tariffs reflect
• Survey: solar tariffs do not account for cost of integration with the grid
• Rues over possibility of fossil fuel plants turning into stranded assets, blames renewables

In a boost to coal, a report by India’s NITI Aayog has declared that coal will power India for ‘decades to come’. Meanwhile, recently released Economic Survey Vol 2 has warned that India’s shift to renewable energy may worsen banks’ bad loans.

The survey added that the ‘social costs’ of producing renewable energy are three times that of producing coal-fuelled electricity, at Rs 11 per kilowatt-hour (kWh).

It also argued that the low solar and wind power tariffs do not reflect the costs of integration with the grid, and those of stranded assets and land acquisition.

The survey asked the government to go slow on solar as the status of 34 coal power projects – running Rs 1.77 trillion debt – is under review.

Experts have slammed the survey’s logic as ‘bizarre’ and ‘wrong’. The survey’s ‘land acquisition costs’ argument against solar parks has been debunked before, as utility scale solar is mostly put on unusable lands.

Bridge to India said that coal-fired power stations were down due to poor planning by government and private developers and lenders, and that it is completely wrong to blame renewables for their failure.

Big win for coal, govt eases norms

Meanwhile, the environment ministry has allowed the expansion of coal mine production by up to 40% in 2-3 phases without a public hearing, after the coal ministry branded the process of forest clearance as ‘time-consuming’.

Environmentalists are calling this dilution of norms the last nail in the coffin.

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