To Reduce Costs, The World’s Largest Coal Miner Turns To… Solar?
What’s happening? The world’s biggest coal miner, Coal India, is to invest INR56.5bn ($763m) by 2024 in 14 solar projects that will help power its operations. The plans to develop rooftop and ground-mounted solar projects with a total capacity of 3,000 MW will be two-thirds funded with cash, with the remaining expansion financed by a joint venture with lignite miner NLC India. Coal India has also agreed partnerships with NTPC and Solar Energy Corporation of India for future solar projects of 1,000 MW each.
Why does this matter? If only there was a perfect example to illustrate the dramatic price drops seen over the last decade in renewable energy technology and the increasing feasibility of implementing it.
Utilising renewable energy to power operations has been a practice dominated by large corporates, and one in which the tech sector has invested heavily to not just green operations but also provide a level of energy security and set energy costs for a period into the future.
While Coal India is being directed to move towards net-zero emissions, the firm says its decision to invest in solar is to help lower its heavy power spending, which accounts for 4.4% of annual costs. As incongruous as it sounds, we may see more fossil fuel firms doing the same as clean power continues to drop in price. Renewables are also being looked at to power other fossil fuel operations, for example offshore oil and gas platforms.
Net zero or no net zero, environmentally conscious investors would likely balk at supporting a coal firm no matter how much renewable energy it installs to support its operations. This was seen last year with a lack of interest in green bonds issued by one shipping company to increase the efficiency of tankers that were transporting crude oil.
Has Coal India seen the light? Perhaps not, but this story illustrates how renewable energy increasingly just makes business sense – with the planet benefitting on the side.
Marc Height is Head of ESG at Curation Corp, an emerging and peripheral risks monitoring service
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