Mumbai, India -- India and China, with their rapid growth and extraordinary need for new energy, have been seen as the global drivers of future carbon pollution, particularly from coal-fired electricity. China today burns almost half of the world's coal, and India was projected to add almost two hundred new coal-fired power plants over the next five years.
Per capita emissions in both countries are far below U.S. levels, though, and India's are only a fraction of the global average. Both also have made considerably more-ambitious policy commitments to clean energy than has the United States. China spent $1.13 cents of every $10,000 of average income on clean energy between 2002 and 2008, India spent $0.43, and the U.S. spent only $0.19.
But regardless of how much more they were doing than the U.S, neither China nor India had found a pathway to commit to a solidly clean energy future (although China's recent announcement of a solar feed-in tariff is very exciting and could double that country's solar capacity by the end of the year).
What's changed is the outlook for coal. As my colleague Justin Guay has been pointing out in his blog, the financial assumptions and underpinnings of a coal-fired, rapid-growth future for Asia have fallen apart as it's become clear that, while some coal is cheap and (geologically speaking) coal is abundant, cheap coal is not abundant.
In India, skyrocketing prices for imported coal have devastated plans to grow the power sector, and one company that's been forced to adapt is Tata Power, which is part of the broader Tata Group. Tata Power was constructing one of the world's largest coal-fired power plants, Tata Mundra. When Tata announced that price increases for Indonesian coal meant that it would need to double electricity prices (and would still lose money for the next five years on Tata Mundra), its stock slumped.
But Tata moved quickly -- clearly it had seen the crisis brewing.
The Tata Group has no counterpart in this country. It combines under one broad management India's largest private power company, Tata Power; the country's major producer of solar cells (in partnership with BP); a mobile phone company; and an automotive manufacturer (which makes both the world's cheapest car, the Tata Nano, and Jaguars and Land Rovers). Other business include steel and iron (along with the associated coal mining), hotels, and insurance. Most of its stock is owned by a series of charitable trusts. So Tata, in effect, is the Indian equivalent of American Electric Power, Ford, US Steel, Dow, First Solar, Marriott, and Sprint, with most of the profits going to equivalents of the Ford and Rockefeller Foundations.
So it was major news this week when the Tata Group announced that it was simultaneously going to increase its total electricity generation eightfold in the next six years, while providing 25 percent of that power from clean energy sources -- a stunning single firm commitment of 6 gigawatts of clean energy in six years! "The price of fossil fuel, be it coal, gas or oil, is heading northwards, which seems to be the trend in the foreseeable future. There are no signs to indicate that this will come down. This gives a huge opportunity for other renewable forms to pick up and gain ground," said Banmali Agrawala, who heads Tata's renewable-energy efforts.
To give a sense of scale, India's total current electrical capacity is 165 gigawatts, and the Indian government's 2020 goal for total solar power is 20 gigawatts. California Governor Jerry Brown's goal for distributed solar is 12 gigawatts by 2020, in an economy that has 60 gigawatts of capacity. By any standard, then, Tata's single firm commitment is very ambitious.
Now we need to find half a dozen other corporate champions to join Tata. Any nominations?