Sanjoy Sen is a chemical engineer. He contested Alyn & Deeside in the 2019 general election.
With COP26 negotiations always likely to prove contentious, the compromise agreement to ‘phase down’ coal perhaps wasn’t a major surprise.
With much of the criticism directed towards India, two very distinct considerations spring to mind. On the downside, an ill-judged energy transition poses very real risks to some of the world’s poorest people. On the upside, there exists substantial value in the mutual opportunities with the UK. And whilst we’re here, let’s not also forget the vital importance of not lecturing anyone.
Is India the bad guy here?
It’s tempting to load this article with mind-boggling Indian coal statistics. But raw numbers don’t do the subject justice.
Visiting India in the 1980s, the gulf between living standards with the UK was abundantly clear. Most people seemed to be existing, not living – with precious little available beyond the bare essentials.
Even if you could afford an expensive, poorly-made local fridge or TV, there was little point, thanks to lengthy daily power cuts. No-one had air-conditioning; you counted yourself lucky if the ceiling fans were running in the sweltering heat.
By the turn of the millennium, things were steadily improving. And by my last trip in 2019, my contemporaries were eagerly consuming all the gadgets and brands that I’d long taken for granted back home. Even in small towns, business was booming, with shopping districts a blaze of lights that would make Oxford Street feel dingy. The transformation has been nothing short of astounding.
India got a bad press at COP26, and its politics can be imperfect across a vast, complex democracy. But it’s worth remembering that successive governments in New Delhi have overseen phenomenal economic growth underpinned by a flourishing energy sector.
Within a generation, electricity output (still 70 per cent from coal) has increased almost tenfold, adding half a billion users to the grid with India now a net exporter.
By contrast, over the same period, European politicians have progressively dismantled their own capabilities, leaving themselves increasingly vulnerable to the prevailing mood in the Kremlin. You’ll have to forgive Narendra Modi if he declines too many offers of western wisdom.
With the world’s second highest production and fourth largest reserves, coal is a massive deal in India. And replacing it has real consequences which cannot be dismissed lightly.
Coal is inextricably linked to the livelihoods of some of the poorest people on the planet, with four million Indians employed directly and indirectly in its production. State-owned Coal India generates $12 billion in revenue. And Indian Railways’ vast passenger network, a lifeline for millions, is subsidised by freight of which coal is by far the largest contributor.
The environmental impact of widespread coal usage is a major concern – especially at a domestic level with poor emissions control from power stations contributing to high levels of air pollution. But let’s remember India’s situation. A badly thought-out wind-down threatens to reverse recent growth and return millions into poverty. And no Indian government is going to risk that. (And neither should ours, by the way.)
How could Britain help?
There is nothing more counter-productive than a western country lecturing a developing country striving to achieve western living standards. Especially when Indian per capita consumption still lags far behind the developed world. The UK could do much worse, rather than dishing out lectures, than embrace the mutual opportunities that India offers during the energy transition.
India has realistic alternatives to coal: it’s all about how to get there. The Institute for Economic Affairs considers India to be on the “cusp of a solar-powered revolution”, with even its most pessimistic scenario predicting solar to become cheaper than coal by 2030 and out-generating it by 2040.
But the required 450 gigawatts of renewable power (plus storage) won’t be cheap. Global investors are piling in and UK financial institutions cannot afford to get left behind. The $700 million Green Growth Equity Fund is an early step towards UK-India investment.
Small-modular nuclear reactors, an opportunity I discussed on this site last year, received UK government support last week. Rolls-Royce has already identified India as a major opportunity with a potential market of five gigawatts. But they’ll have to get in there soon; other countries are also keen to start selling their SMRs round the globe. And nuclear sales come with considerable political leverage.
The opportunities extend well beyond power generation. India produces just 20 per cent of its crude oil requirements, making it the world’s third largest importer. That saddles the economy with a $25 billion annual import bill, and heavy import dependence weakens its political strength.
Whilst electric scooters and auto-rickshaws already account for half the market, sales of larger vehicles remain sluggish with international manufacturers wary of committing too early. But with Jaguar Land-Rover and Switch Mobility (formerly Optare buses) owned by Tata and Ashok Leyland respectively, electric and hydrogen technology transfer has become a realistic prospect. And noting China’s dominance of the lithium battery supply chain, UK-derived alternatives such as Faradion’s sodium-ion technology can find an eager market in India.
Agreeing to rapid change would have earned India easy plaudits at COP26. But such a stance wouldn’t have been realistic, and would have risked reversing a generation of hard-won economic growth. Let’s embrace the mutual opportunities and get that trade deal.
Sanjoy Sen is a chemical engineer. He contested Alyn & Deeside in the 2019 general election.
With COP26 negotiations always likely to prove contentious, the compromise agreement to ‘phase down’ coal perhaps wasn’t a major surprise.
With much of the criticism directed towards India, two very distinct considerations spring to mind. On the downside, an ill-judged energy transition poses very real risks to some of the world’s poorest people. On the upside, there exists substantial value in the mutual opportunities with the UK. And whilst we’re here, let’s not also forget the vital importance of not lecturing anyone.
Is India the bad guy here?
It’s tempting to load this article with mind-boggling Indian coal statistics. But raw numbers don’t do the subject justice.
Visiting India in the 1980s, the gulf between living standards with the UK was abundantly clear. Most people seemed to be existing, not living – with precious little available beyond the bare essentials.
Even if you could afford an expensive, poorly-made local fridge or TV, there was little point, thanks to lengthy daily power cuts. No-one had air-conditioning; you counted yourself lucky if the ceiling fans were running in the sweltering heat.
By the turn of the millennium, things were steadily improving. And by my last trip in 2019, my contemporaries were eagerly consuming all the gadgets and brands that I’d long taken for granted back home. Even in small towns, business was booming, with shopping districts a blaze of lights that would make Oxford Street feel dingy. The transformation has been nothing short of astounding.
India got a bad press at COP26, and its politics can be imperfect across a vast, complex democracy. But it’s worth remembering that successive governments in New Delhi have overseen phenomenal economic growth underpinned by a flourishing energy sector.
Within a generation, electricity output (still 70 per cent from coal) has increased almost tenfold, adding half a billion users to the grid with India now a net exporter.
By contrast, over the same period, European politicians have progressively dismantled their own capabilities, leaving themselves increasingly vulnerable to the prevailing mood in the Kremlin. You’ll have to forgive Narendra Modi if he declines too many offers of western wisdom.
With the world’s second highest production and fourth largest reserves, coal is a massive deal in India. And replacing it has real consequences which cannot be dismissed lightly.
Coal is inextricably linked to the livelihoods of some of the poorest people on the planet, with four million Indians employed directly and indirectly in its production. State-owned Coal India generates $12 billion in revenue. And Indian Railways’ vast passenger network, a lifeline for millions, is subsidised by freight of which coal is by far the largest contributor.
The environmental impact of widespread coal usage is a major concern – especially at a domestic level with poor emissions control from power stations contributing to high levels of air pollution. But let’s remember India’s situation. A badly thought-out wind-down threatens to reverse recent growth and return millions into poverty. And no Indian government is going to risk that. (And neither should ours, by the way.)
How could Britain help?
There is nothing more counter-productive than a western country lecturing a developing country striving to achieve western living standards. Especially when Indian per capita consumption still lags far behind the developed world. The UK could do much worse, rather than dishing out lectures, than embrace the mutual opportunities that India offers during the energy transition.
India has realistic alternatives to coal: it’s all about how to get there. The Institute for Economic Affairs considers India to be on the “cusp of a solar-powered revolution”, with even its most pessimistic scenario predicting solar to become cheaper than coal by 2030 and out-generating it by 2040.
But the required 450 gigawatts of renewable power (plus storage) won’t be cheap. Global investors are piling in and UK financial institutions cannot afford to get left behind. The $700 million Green Growth Equity Fund is an early step towards UK-India investment.
Small-modular nuclear reactors, an opportunity I discussed on this site last year, received UK government support last week. Rolls-Royce has already identified India as a major opportunity with a potential market of five gigawatts. But they’ll have to get in there soon; other countries are also keen to start selling their SMRs round the globe. And nuclear sales come with considerable political leverage.
The opportunities extend well beyond power generation. India produces just 20 per cent of its crude oil requirements, making it the world’s third largest importer. That saddles the economy with a $25 billion annual import bill, and heavy import dependence weakens its political strength.
Whilst electric scooters and auto-rickshaws already account for half the market, sales of larger vehicles remain sluggish with international manufacturers wary of committing too early. But with Jaguar Land-Rover and Switch Mobility (formerly Optare buses) owned by Tata and Ashok Leyland respectively, electric and hydrogen technology transfer has become a realistic prospect. And noting China’s dominance of the lithium battery supply chain, UK-derived alternatives such as Faradion’s sodium-ion technology can find an eager market in India.
Agreeing to rapid change would have earned India easy plaudits at COP26. But such a stance wouldn’t have been realistic, and would have risked reversing a generation of hard-won economic growth. Let’s embrace the mutual opportunities and get that trade deal.