Danny Price is managing director of Frontier Economics. Disclosure: Frontier has advised Adani on Australian regulatory matters.
For several years Adani Group has been progressing with plans to invest in a large coal mine in Queensland’s Galilee basin.
Once mined, coal will be sent by a railway, constructed as part of the project, to the Adani-owned Abbot Point port, from where it will be shipped to the Indian province of Gujarat, to fuel among others, the Adani Mundra power plant.
This power plant generates electricity for some of the poorest people in the world so they can have lighting to study at night and power for clean water. Reliable power is also crucial to attract industry so that people can have jobs to lift themselves out of poverty.
Inevitably, there will be those Australians who say that instead of selling coal to Gujarat, the Indians should use renewable energy instead. Unfortunately, renewables are still not as cheap as burning coal in an existing power station and the population of Gujarat, whose income is one tenth of an average Australian, cannot afford the extra costs.
Besides, Gujarat does not have sufficient reliable thermal power capacity to supplement inherently unreliable renewables. Further, in overcrowded Gujarat, it is difficult to develop the vast infrastructure required to support a renewables-dominated power system, which we ourselves struggle to achieve.