December 31, 2020 Read More →

India doubles down on bad environmental bets

IndiaSpend:

Much of 2020 was lost to the lockdown but the environment sector did not remain dormant in India. The solar sector, for example, touched new benchmarks with tariffs plummeting to Rs 1.99 per kWh (or 1 unit of electricity). The coal sector stumbled despite renewed government interest.

The lockdown gave city-dwellers some respite from outdoor air pollution but exposure to indoor pollution – a silent killer – increased. Also, erratic weather and extreme climate events were reported from across the country.

Amidst all this, India diluted several laws that have acted as environmental safeguards during fast-paced economic growth. 

Up to 34 coal power plants of about 40 gigawatt capacity in India have been designated as stranded assets, projects that have lost their economic value ahead of their anticipated lifespan, IndiaSpend reported on May 25. Further, as funding dried up, India’s coal-fired power project pipeline started shrinking rapidly with 46 GW-worth of cancellations in 12 months to March. This added to over 600 GW-worth of cancellations over the preceding decade, said a briefing note published on March 23, by the Institute for Energy Economics and Financial Analysis, a think-tank.

Currently, the Power Finance Corporation, a non-banking lender for the electricity sector, is the only public financial institution funding coal power plants in India. Before the economic recovery package was announced in May, close to 54% of Power Finance Corporation’s loan books were dedicated to coal assets. Of this, 14% were already non-performing assets – valued close to Rs 47,454 crore. Forcing public and private financial institutes to fund unprofitable and financially unviable coal projects will only result in increased NPAs and bad loan problems within the financial sector said an Institute for Energy Economics and Financial Analysis report launched on May 7. 

[Bhasker Tripathi]

More: In a year marked by extreme weather events, India diluted environmental norms and pushed coal

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