Along India’s narrow coastal belt of Mundra in Gujarat State, 500 miles (805 kilometers) northwest of Mumbai, several coal-fired power plants generate electricity so cheaply that authorities for the most part have overlooked damage to fishing and grazing, and harm to the vulnerable mangrove ecosystem.
It is here that Tata, India’s giant conglomerate and largest private electric utility, has been building what it hopes will be one of the largest coal power plants in the world, the 4,000-megawatt Tata Mundra. It is one of nine such “ultra-mega” plants being built across India.
But the Tata Mundra project has brought to light a new reality that will surely shape India’s energy future. Coal power is no longer looking like cheap power.
Although India has seemingly abundant coal reserves, the low-quality, high-ash fuel causes problems when it’s used in state-of-the-art power plants. Instead, companies like Tata are looking overseas for coal, and import prices have been rising steadily. Tata’s chief executive officer says Tata Mundra won’t be financially viable unless it gets a hefty rate increase to offset the soaring prices of imported Indonesian coal.
Coal suitable for fueling these new plants is turning out to be scarce and expensive, leaving many in India to ask if it has any selling point left at all. It also is losing its luster as certain renewables, such as wind and solar, become more cost-competitive.
“[The] cheap coal power age is over,” said Soumya Dutta, the national convener of the India People’s Science Campaign, an activist group that focuses on energy and climate-change issues.