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Mapping Costs for Early Coal Decommissioning in India

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Mapping Costs for Early Coal Decommissioning in India Mapping Costs for Early Coal Decommissioning in India Centre for Energy Finance Mapping Costs for Early Coal Decommissioning in India Vaibhav Pratap Singh and Nikhil Sharma Report July 2021 Mapping Costs for Early Coal Decommissioning in India The transition away from coal could help reduce India’s GHG emissions. Still, a pacing up of this transition through mechanisms like decommissioning will free up capital locked in these assets and help finance a rapid buildup of RE and storage. Image: iStock Mapping Costs for Early Coal Decommissioning in India Centre for Energy Finance Mapping Costs for Early Coal Decommissioning in India Vaibhav Pratap Singh and Nikhil Sharma Report July 2021 ceew.in Mapping Costs for Early Coal Decommissioning in India Copyright © 2021 Council on Energy, Environment and Water (CEEW). Open access. Some rights reserved. This work is licensed under the Creative Commons Attribution- Noncommercial 4.0. International (CC BY-NC 4.0) license. To view the full license, visit: www. creativecommons.org/licenses/by-nc/4.0/legalcode. Suggested citation: Singh, Vaibhav Pratap, and Nikhil Sharma. 2021. Mapping Costs for Early Coal Decommissioning in India. New Delhi: Council on Energy, Environment and Water. Disclaimer: The views expressed in this study are those of the authors and do not necessarily reflect the views and policies of the Council on Energy, Environment and Water. The views/analysis expressed in this report also do not necessarily reflect the views of SED Fund. SED also does not guarantee the accuracy of any data included in this publication nor does it accept any responsibility for the consequences of its use. Cover image: iStock. Peer reviewers: David Elzinga, Senior Energy Specialist & Pradeep Tharakan, Principal Energy Specialist from Asian Development Bank; Michael Ward, Senior Consultant, Climate Investment Fund; Kartikeya Singh, Senior Associate (Non-resident) Centre for Strategic and International Studies; Ashish Fernandes, CEO & Lead Analyst, Climate Risk Horizon; Madhura Joshi, Senior Associate & Maria Pastukhova, Senior Policy Advisor from E3G; Nikit Abhyankar, Scientist, Lawrence Berkley Lab; Casey Ho, Special Assistant to The Chairman & Donald Perry Kanak, Chairman from Prudential Insurance Growth Markets; Kanika Chawla, Programme Manager, SE4ALL; Bharath Jairaj, Director, Energy, World Resource Institute; Arjun Dutt, Programme Lead, and Prateek Aggarwal, Programme Associate from Council on Energy Environment and Water. Publication team: Alina Sen (CEEW), The Clean Copy, Twig Designs, and Friends Digital. Organisations: The Council on Energy, Environment and Water (CEEW) is one of Asia’s leading not-for-profit policy research institutions. The Council uses data, integrated analysis, and strategic outreach to explain – and change – the use, reuse, and misuse of resources. It prides itself on the independence of its high-quality research, develops partnerships with public and private institutions, and engages with the wider public. In 2021, CEEW once again featured extensively across ten categories in the 2020 Global Go To Think Tank Index Report. The Council has also been consistently ranked among the world’s top climate change think tanks. CEEW is certified as a Great Place To Work®. Follow us on Twitter @CEEWIndia for the latest updates. The CEEW Centre for Energy Finance (CEF) is an initiative of the Council on Energy, Environment and Water (CEEW), one of Asia’s leading think tanks. CEF acts as a non-partisan market observer and driver that monitors, develops, tests, and deploys financial solutions to advance the energy transition. It aims to help deepen markets, increase transparency, and attract capital in clean energy sectors in emerging economies. It achieves this by comprehensively tracking, interpreting, and responding to developments in the energy markets while also bridging gaps between governments, industry, and financiers. SED Fund: We are an initiative inspired by the Sustainable Development Goals to back the best efforts of governments and civil society to support economic development according to principles of sustainability, equity and diversity. We work with partners to enhance existing initiatives that will have the most impact in support of these goals. We aim for prosperous, sustainable economies that work for people and protect our environment. ( https://www.stichtingsed.org/) Council on Energy, Environment and Water Sanskrit Bhawan A-10, Qutab Institutional Area, Aruna Asaf Ali Marg New Delhi – 110067, India Mapping Costs for Early Coal Decommissioning in India CEEW Centre for Energy Finance The CEEW Centre for Energy Finance (CEEW-CEF) is an initiative of the Council on Energy, Environment and Water (CEEW), one of Asia’s leading think tanks. CEEW-CEF acts as a non-partisan market observer and driver that monitors, develops, tests, and deploys financial solutions to advance the energy transition. It aims to help deepen markets, increase transparency, and attract capital in clean energy sectors in emerging economies. It achieves this by comprehensively tracking, interpreting, and responding to developments in the energy markets while also bridging gaps between governments, industry, and financiers. The need for enabling an efficient and timely energy transition is growing in emerging economies. In response, CEEW-CEF focuses on developing fit-for-purpose market-responsive financial products. A robust energy transition requires deep markets, which need continuous monitoring, support, and course correction. By designing financial solutions and providing near-real-time analysis of current and emerging clean energy markets, CEEW-CEF builds confidence and coherence among key actors, reduces information asymmetry, and bridges the financial gap. Financing the energy transition in emerging economies The clean energy transition is gaining momentum across the world with cumulative renewable energy installation crossing 1000 GW in 2018. Several emerging markets see renewable energy markets of significant scale. However, these markets are young and prone to challenges that could inhibit or reverse recent advances. Emerging economies lack well-functioning markets. That makes investment in clean technologies risky and prevents capital from flowing from where it is in surplus to regions where it is most needed. CEEW-CEF addresses the urgent need for increasing the flow and affordability of private capital into clean energy markets in emerging economies. CEEW-CEF’s focus: analysis and solutions CEEW-CEF has a twin focus on markets and solutions. CEEW-CEF’s market analysis covers energy transition– related sectors on both the supply side (solar, wind, energy storage) and demand-side (electric vehicles, distributed renewable energy applications). It creates open-source data sets, salient and timely analysis, and market trend studies. CEEW-CEF’s solution-focused work will enable the flow of new and more affordable capital into clean energy sectors. These solutions will be designed to address specific market risks that block capital flows. These will include designing, implementation support, and evaluation of policy instruments, insurance products, and incubation funds. CEEW-CEF was launched in July 2019 in the presence of HE Mr Dharmendra Pradhan and H.E. Dr Fatih Birol at Energy Horizons. cef.ceew.in Mapping Costs for Early Coal Decommissioning in India Acknowledgments We would like to thank SED Fund for their support to carry out the study. We would like to thank Gagan Sidhu, Director, CEEW Centre for Energy Finance, for his support and guidance in working on the report. His inputs on the methodology were extremely valuable and improved the projections in the report. We thank our reviewers – David Elzinga, Pradeep Tharakan (Asian Development Bank), Michael Ward (Climate Investment Fund), Kartikeya Singh (Centre for Strategic and International Studies), Ashish Fernandes (Climate Risk Horizon), Arjun Dutt, Prateek Aggarwal (Council on Energy, Environment and Water), Madhura Joshi, Maria Pastukhova (E3G), Nikit Abhyankar (Lawrence Berkley Lab), Casey Ho, Donald Perry kanak (Prudential Insurance Growth Markets), Kanika Chawla(SE4ALL), Bharath Jairaj (World Resource Institute) for their critical reviews and comments which helped in refining the report and the investment model presented in the report. We thank our colleagues particularly Dhruv Warrior (CEEW-CEF), Sangeeth Raja (CEEW-CEF) and Danwant Narayanswamy (CEEW) for their help in research. Lastly, we would like to thank the Outreach Team at CEEW for helping us design and publish the report. Mapping Costs for Early Coal Decommissioning in India The authors Vaibhav Pratap Singh Nikhil Sharma [email protected] [email protected] As a Programme Lead at the CEEW Centre for Nikhil is a Programme Associate at the Energy Finance, Vaibhav focuses on climate CEEW Centre for Energy Finance. He actively finance; he designs and develops financial monitors market developments in India’s clean instruments to unlock investments in the market and develops solutions/tools to attract clean energy sector in India. His strength capital in the sector. Previously, he worked as lies in developing solutions and providing a management consultant in the power and simple analyses of current issues for a broad renewables sector. audience. Previously, he performed credit analysis and recommended credit ratings to financial institutions. “Adding more renewables, improving “Falling and competitive renewable energy efficiency and getting a large part
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