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Some policies formulated with the intent of improving coal availability in the country, have been counter productive, a report by the International Institute for Sustainable Development said.
“Across all major drivers that affect coal, there is also an important role being played by policy, where generous lending practices and interventions that reduce the cost of investment and operations have driven poor investment decisions and masked the extent to which plants are under stress. In some cases, policy tools may also be having a counter-productive influence,” the IISD said in a report titled India’s Energy Transition: Stranded coal power assets, workers and energy subsidies.
The IISD said deeper analytical work is required to estimate the range of impacts across different scenarios in light of higher coal prices. “This should review future risks associated with water scarcity, air pollution and renewable energy cost-competitiveness. This assessment may want to focus on states where stressed assets are already most problematic: Chhattisgarh, Odisha and Jharkhand,” the report said.
Impact on coal workers
The IISD also commented on the impact on coal mine workers when power sector assets are stranded. It said that there is a need to explore complementary policies that ensure that stranded assets do not lead to stranded workers and communities.
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