A Dynamic India needs more electrical generation for all the right reasons. The Government is seeking a green energy transformation while other transitions run. Electricity is the key to major society changes in jobs, education, government services, social mobility, and personal comfort. The global conditions in energy are also affecting India’s imports to fuel electrical generation.
India is importing more coal from Russia since conflicts began in 2022. India is now the 2nd largest importer (17%) of Russian coal after China (45%). The massive increases, from almost nothing to buying 32% of Russia crude oil exports, is combined with large imports of Russian coal (although only 2% of total Indian energy imports the oil is so large). In 2023 Russian imports of coal to India became larger than imports from USA or Australia (traditional suppliers to India). South African exports to India have also been affected. India has been taking advantage of good discount pricing from Russia to lower overall costs of electrical generation.
China and India are now the largest importers of coal in the world. China and India are also two of largest producers of coal in the world. India’s energy demands are now larger than Japan and Korea put together. Shifting global pricing puts pressures on an Indian electricity markets’ regulation. The demand for thermal coal, for generation of electricity, is a key driver of demands in the Indian economy for imported energy fuel.
The import dependency on imported coal puts pressures on Government efforts to foster more local energy independence, lower fuel imports, and efficiently grow the costs of expanding electrical generation. 9 of 10 of the largest electricity generation plants are coal. The Governments desires for a green energy transformation is also made more complex by added electrical generation capacity dependent on coal.
Additional renewable energy sources compete for capital investment, and realized revenues, even as electricity demand from government, enterprises, domestic appliances, and transportation climbs. Investment is a limiting factor on green transformation of all of the aspects of electricity in India – generation, transmission, distribution, use, and access. The dependency on growth in foreign sourced coal only makes a green transformation take longer and hard to compete for shorter-term investments in other Indian sectors.
A Dynamic India must take advantage of near-to-mid-term benefits in the global energy markets. Changes to policy, rewards for investment, and a steady regulatory climate are as essential as changes to the generation technology, increasing demand, the grid, and mature markets.
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