India will require more than $1 trillion dollar (Rs 84 lakh crore) over the next three decades to transition its coal mining and thermal power sectors, according to a report released Tuesday.
The report by the think tank International Forum for Environment, Sustainability and Technology (iForest) says these investments will facilitate a smooth shift from coal to renewable energy (RE), ensuring minimal disruption to existing infrastructure and jobs, while maintaining energy access and security and supporting green jobs and growth in the coal-dependent regions.
These investments reflect the cost of closing coal mines with a 1,315 million tonne per annum (MTPA) cumulative production capacity and phasing out 237.2 Gigawatts (GW) of coal-based power capacity.
The associated costs include rehabilitation and repurposing of 343,504 hectares (ha) of coal mining land, green repowering of 124,789 ha of land available at thermal power plant (TPP) sites, and transition support for about 5.9 million workers whose income is dependent on or is induced by these industries.
The report says the cost estimates are conservative as it does not include the investments needed to set up new green energy plants and infrastructure to meet the country’s future energy demand, estimated to be in trillions of dollars.
“The cost of transitioning industries, where coal is directly used—such as steel and cement—are excluded. Moreover, the cost of a just transition will escalate further, as at least till 2030, India will add new TPPs and coal mines to meet the country’s increasing energy demand,” it said.
Green energy investments, including green repowering of TPPs, are the largest share of just transition costs.
The total cost of a just energy transition can be divided into two components— ‘green energy’ and ‘non-energy’ costs. The green energy investments are about 52% of the total just transition cost.
The costs also include Battery Energy Storage Systems (BESS) and upgradation of the grid. About 48% of the just transition costs are ‘non-energy’ related investments, with economic diversification alone accounting for 22% of the total costs.
The largest share of non-energy costs is for economic diversification (about 21.7% of the total just transition cost), which will support green growth, create green jobs, and help to substitute government revenue.