India's choice in the energy transition should be nuclear and renewables, not gas

Coal is on its way out, even if slowly. Nuclear energy and carbon dioxide removal will become competitive fast, even as natural gas rises in cost.

Go for renewables and nuclear, not gas

As Israel expands the theatre of war from Gaza to Lebanon, and is poised to extend it to Iran, markets have tanked, and gold prices, soared. Oil prices have turned volatile, especially with Israel’s threat to bomb Iran’s oil and gas installations. Iran’s own oil production is less than 4% of the world output, but if the Strait of Hormuz gets blocked, as a result of regional war, oil shipments from Saudi Arabia, Iraq and the UAE could also be disrupted.

Inflation has fallen further in the EU, and the Bank of England and the Swiss central bank have indicated further rate cuts are on the table. China has cut interest rates, and the Chinese markets have risen. However, the Chinese stimulus package announced late in September consists mostly of measures to ease lending and to lower the downpayment on the purchase of second homes. The effort to flog an oversaturated housing market is a little surprising, as local governments are buying up unsold inventories to convert them into public housing.

Home ownership in China is upwards of 90%, and unless social mobility has been so great as to warrant making the second home purchase an act of residential upgrade at mass scale, this policy measure is unlikely to create much economic momentum. The stimulus package falls short of the needed shift to consumption-led growth in China, where investments in new towns and physical infrastructure have long supported growth.

These are all significant developments. Many Indians would like to add the Supreme Court’s decision to uphold the tax authorities’ right to reopen tax filings under two sets of timelines that would have been mutually exclusive, but for the intervention of Covid. But none of these matches, in terms of historical impact, the shutting down on September 30th of the UK’s sole, surviving coalfired powerplant. It is a symbol of the ongoing energy transition from fossil fuels, of which coal and its brown cousin, lignite, are the dirtiest in terms of greenhouse gas emissions, to renewables and nuclear power.

Coal was the fuel that drove the industrial revolution. Coal displaced biomass, especially wood and charcoal, as the chief source of energy, by mid-nineteenth century. Coal was pulverized and burnt in boilers to produce compressed steam, which worked machines ranging from locomotives and steamships to textile mills. It was only towards the end of the 19th century that coal was burned to produce electricity. Oil is a 20th century fuel, and it grew in significance with the spread of automobiles, and in the 1960s, displaced coal as the preponderant source of primary energy. Now, coal and oil are giving way to lower carbon substitutes such as natural gas, wind, sunlight and fissile nuclear material – in the rich world: developing countries like India and China still rely on coal to produce the bulk of their electricity.

Britain is the first G7 country to dispense with coal. It can do that because it has natural gas from the North Sea. Natural gas consists primarily of methane, with little bits of other higher alkanes – ethane, propane, butane, etc – and is the fossil fuel that emits the lowest amount of carbon dioxide. Many see it as the ideal fuel for enabling the energy transition from greenhouse gas emitting sources of energy to zero-emission energy. Britain accounts for just 1% of the world’s electricity generation, and had managed to achieve a negative growth of power generation over 2013-23, at an annual rate of -2.2%, according to the World Energy Institute. And coal accounted for just 1.2% of the UK’s power generatio in 2023.

China accounts for 31% of the world’s electricity generation and India, 6%. Of China’s total power generation in 2023 of 9,456.4 Terawatthours (Twh), coal accounted for 61%, renewables 17.6%, hydel 13%, nuclear 4.6% and gas 3.1%. The corresponding shares for India’s total generation of 1,958.2 Twh in 2023 stood at coal 75%, renewables 12%, hydel 7.6%, nuclear 2.5% and gas 2.7%. For the world as a whole, of the total power generation in 2023 of 29,924.8 Twh, coal accounted for 35%, natural gas 22.5%, renewables nearly 16%, hydel 14% and nuclear energy 9%.

Should India try to adapt to the global fuel mix, increasing the shares of natural gas, renewables, nuclear energy and hydel, while reducing the share of coal? India’s aim should be to focus attention on raising power generation to match the demand generated by a growing economy and improving living standards, while doing research on technology and processes to remove carbon dioxide from the air.

The goal, eventually, is to have net zero emissions, meaning that any fresh emissions would be offset by greenhouse gas removal from the atmosphere. Net negative emissions would more than remove fresh emissions, to effect depletion of the existing stock of greenhouse gases.

Gases that trap heat in the atmosphere, instead of allowing it to attenuate via radiation, are called greenhouse gases. The biggest component, accounting for almost four-fifths of the stock of GHGs, is, of course, carbon dioxide or CO2, but methane is a more potent greenhouse gas. Oxides of nitrogen, fluorinated and water vapour are other greenhouse gases. Their volumes are measured as equivalent tonnes of CO2 – one tonne of methane is equivalent to 28-36 tonnes of CO2, for example.

Experts of the Intergovernmental Panel on Climate Change estimate that over 1850-2019, 2400 Gigatonnes (Gt) of CO2 equivalent has been emitted into the atmosphere, give or take 10%. The world had, in 2019, 500 Gt of additional CO2 to emit before the average global temperature rises to 1.5 degrees Celsius above the level that obtained before the industrial revolution. Every year, the world emits an additional 40 or so Gt of CO2. Just by accelerating the pace of additional emissions, it would be difficult to halt the rise in global temperatures to critical levels. That means the world must create net negative emissions, by removing CO2 from the existing stock in the atmosphere.

Renewable power is intermittent power. Only when it is coupled with massive storage or other intermittency solutions such as green hydrogen can it become a source of stable power supply on its own. Nuclear power has been seeing big advances in technology and commercial viability. Last week saw reports of India preparing to set up Small Modular Reactors. Spain reported technological progress in nuclear fusion power.

India should aim to increase the share of nuclear and renewables in the power mix, combined with storage and low-carbon hydrogen, rather than go in for expanding natural gas-based generation. Advances in CO2 removal and nuclear power generation are safer bets than investing in gas infrastructure and capacity, only to abandon these as climate-unfriendly, when nuclear energy and renewables become competitive.