In the India Energy Transition 2018 update, the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) and the Council on Energy, Environment and Water (CEEW) published updated estimates of the scale of energy subsidies in India for FY 2017, including partial data on the scale of subsidies for FY 2018.
One of the review's striking findings was government support measures for coal have remained largely unchanged since 2014, despite an ongoing crisis in the coal sector, where around 18% of installed capacity is 'stressed' and at risk of entering bankruptcy proceedings.
This briefing note takes a detailed look at why such a large share of coal power is struggling today and the drivers – including subsidies – that may cause similar crises to rear their heads in future. In light of this, it sets out some broad proposals from international literature on the topic of 'just transition', which encourages governments to recognise stranded workers and communities as much as stranded private or public assets. It builds on an analysis of the relationship between subsidies and coal power assets published by the GSI and the Overseas Development Institute in mid-2018: India’s stranded assets: how government interventions are propping up coal power.