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India still counts on coal for its power. And that could be a problem

SCOTT SIMON, HOST:

India faces a coal shortage. That's a problem because India's electricity grid relies on coal. So when coal prices spike, as they have this month, the lights go out in the world's second most populous country. NPR's Lauren Frayer reports from Mumbai.

(SOUNDBITE OF METAL CLANGING)

LAUREN FRAYER, BYLINE: Wiry men in flip-flops shovel heaps of coal at a depot tucked away in a slum. Coal dust wafts through the air. Nobody is wearing a mask.

This is a mountain of coal.

ABDUL MOEED CHAUDHURY: Yeah, 8 meters...

FRAYER: Eight meters.

CHAUDHURY: Eight to 10 meters high.

FRAYER: Abdul Moeed Chaudhury (ph) is the third generation of his family to run this depot, which buys coal from mines in the east of the country and sells it to customers in India's megacity Mumbai.

CHAUDHURY: From here, we supply to the restaurants and factories, metal industries.

FRAYER: It's not just heavy industry. Seventy percent of India's electricity also comes from coal. As its economy emerges from the pandemic, demand is high and prices have shot up.

CHAUDHURY: That went from 18 rupees to 28 rupees. So it is like 10 rupees additional.

FRAYER: That's - what? - like 50% higher.

CHAUDHURY: Yeah.

FRAYER: Abdul Moeed buys high but is locked into contracts to sell lower than the going rate, so he loses money.

Coal prices are up globally, but in India, there's another reason for the spike, explains energy economist Vibhuti Garg.

VIBHUTI GARG: During August and September, India witnessed kind of an extended monsoon. And as a result, the production also got impacted because of flooding of mines.

FRAYER: Floods also delayed truck deliveries of coal. By October, many of the nation's power plants had only a few days' supply left. Power cuts are the norm in rural India, and officials warned they could return to the big cities, too, halting any economic recovery. They asked people to ration electricity. Ultimately, major blackouts were averted, Garg says.

GARG: The government sprung into action, ensured the domestic production was ramped up and that more railway tracks or road transportation of coal was happening.

FRAYER: The lights have stayed on for now, but this is the kind of situation that India will keep facing with coal as its main power source and climate change messing with the monsoon. So India is investing heavily in solar and wind power, but at the same time, it's not ready to abandon coal. Prime Minister Narendra Modi presided over an event last year called Unleashing Coal...

(SOUNDBITE OF ARCHIVED RECORDING)

PRIME MINISTER NARENDRA MODI: (Non-English language spoken).

FRAYER: ...In which he opened up more Indian land to coal mining. And when Modi goes to Glasgow for the U.N.'s next big climate conference, he's expected to refrain from any promise to give up coal. That's because while energy demand in the U.S. has plateaued, in India, it's skyrocketing, says economist Ulka Kelkar.

ULKA KELKAR: We're trying to pull millions of people out of poverty, and with that will come the need for more energy for lighting, for buildings, for transportation. India's energy needs are very low per person compared to the advanced economies of the West but growing fast.

FRAYER: So India needs all the energy it can get, even as it tries to diversify away from coal.

That's actually what Abdul Moeed, the coal vendor in Mumbai, is doing. He may work in the family coal business, but...

CHAUDHURY: Even I am working in the green field, also (laughter).

FRAYER: He recently got a master's degree in renewable energy. He's balancing the old coal business with new ideas, just like India is.

Lauren Frayer, NPR News, Mumbai. Transcript provided by NPR, Copyright NPR.