The Tata Mundra power project has been provided the necessary loans and subsidy by the IFC to start the project. As I argued yesterday in Coal power or no power, the power plants need to be built.

Dot Earth considers the dilemma and provides more stark numbers.

India faces power shortages that leave more than 400 million people without access to electricity, mainly in poor rural areas. The country needs to expand generation capacity by 160,000 megawatts over the next decade, and this new project helps address this gap.

As Michael Wines reported last year, the 700 million people of sub-Saharan Africa outside of South Africa have access to the same amount of electricity used by the 38 million people of Poland.

Dot Earth concludes, “Is all of this bad? If you’re one of many climate scientists foreseeing calamity, yes. If you’re a village kid in rural India looking for a light to read by, no.”

Six Environmental groups, Environmental Defense Fund, Friends of the Earth US, National Wildlife Federation, Bretton Woods Project and the International Accountability Project are fighting the World bank to stop providing a subsidy for the construction of the Tata Mundra coal plant which will provide electricity to 16 million people in 5 states in western and northern India.

The IFC says that the Tata Mundra Project (PPT)

• will have amongst the lowest GHG emission rates globally – lower by 40%, 18% and 16% compared to the average GHG emission rate of coal based plants in India, across the globe and OECD, respectively

• first supercritical project sets a precedent for efficient coal usage: consumes 1.7 million tons of coal less per year than traditional subcritical plants of comparable size

The environmental groups want to consider the costs to the environment and have suggested wind and solar technologies as alternative to the coal plant. The coal plant would cost about $4.2 billion with the World bank providing a subsidy of $450 million. The wind or solar alternatives would cost around $24 billion for the same capacity.

Clearly, coal is the cheapest option at this point in time.

The question that these groups need to consider is this – what happens when there is no power? What are the costs and benefits of providing the least cost power to poor people in a developing country to providing no power at all? Who is working on the side of the people?

The following image from the German Advisory Council on Global Change’ provides a good idea of the countries without power.

The interesting option is the reliance of people on biomass. In some ways Coal may be a better option.

It is a very clear case that development around the world has been due to the emergence of cheap power. What these environmentalists miss in the entire picture is the case for the poor people to come out of poverty using energy. What about the person who dies since there was no electricity in the hospital? What about the child who cannot study because of the lack of electricity?

Interestingly, there are other people supporting the environmental groups. For example, Sreekumar Raghavan at the International Business Times. He provides examples of countries like Australia and the US where there is a movement towards not supporting coal powered plants unless there is a carbon capture mechanism. That is a really good initiative. However, he misses the point. Firstly, Australia and the US do not have millions of people without electricity in their countries. If that is the case, they would have gone ahead with the coal powered plant like the UK has done recently. Also, the US and Australia are highly dependent on coal powered plants. 75% of Australia’s electricity comes from coal.  Second, the per capita GDP of these countries are way above India. There is no comparison at all. It is foolish to think that India can solve its poverty issues without abundant and cheap energy.

Robert Zoellick, the president of World Bank,  makes an important point. He said, “…that if developing nations are deprived of energy it will be counter productive and a setback for the larger issues of climate change.” Mr. Raghavan calls this a weak defense. However, it is he who needs to understand that this is an important argument. The capacity to fight and adapt to climate change is dependent on the ability of nations to develop economically. And to develop economically, we need to have cheap and abundant energy.

There is another argument too. The IPCC predictions for future increases in CO2 emissions have already considered the growth of transport, energy and other emissions in their calculations. This growth would mean the building up of coal powered plants and small cars like Nano. If the cuts suggested by IPCC are to be followed by the world, then there should be no opposition to the current growth of power and CO2 for developing countries.

Well, the point is simple. Coal power or no power. Which is better?