The Future of Coal in India

The Ministry of Coal has finalized an Agenda Document for the year 2021-22 which broadly focuses on the four areas of:

1.Coal Sector Reforms

2. Coal Transition and Sustainability

3. Institution Building

4. Futuristic Agenda.

This is for the first time that an Agenda document for the ensuing year has been brought out in the form of a compilation and provided to all senior functionaries who have been apportioned the responsibility of steering these four broad focus areas through the year with regular monitoring and appraisals.

This Agenda has been designed along with a monitoring and reviewing framework which is to be reviewed frequently by the Secretary (Coal) for mid-course directions / alignments.

The areas covered step up upon the major reforms done in the last few years and also give direction for covering and meeting the existing and the emerging challenges of the Coal Sector and aligns itself well with the emerging technologies and diversification thrust of the Coal Sector.

The Agenda covers the entire gamut of areas for steering the Coal Sector into new technologies while focusing on the core competence of ensuring set production targets including the one billion tons by 2024.

Coal Sector Reforms include Projects for the financial year 2021-22, Jharia Master Plan, Regulatory reforms (Exploration), Coal Beneficiation, Safety in coal mines, Coking coal Strategy, Marketing reforms, Coal Pricing Reforms, Reforms in land acquisition, Solar Power Projects, Coal Dispatch & Stocking, Coal Export in Neighboring Countries and Strategy to boost coal production of mines allocated through auction.

At the same time, Coal Transition & Sustainability covers the areas of social aspects of coal transition, monetization of de-coaled land, use of Artificial Intelligence (AI) in data mining/drones and Sustainability (Net Zero Emissions)

Institution building segment of the above Agenda contains reforms in Coal Controller Organization (CCO), Coal Mines Provident Fund Organization (CMPFO), upgrading Coal testing lab and staffing quality and training issues.

The Futuristic Agenda include Coal to Chemical: Syn Gas, Hydrogen Gas, Liquid fuels, Chemicals and fertilizers, CIL – diversify its business and explore prospects in sunrise industries electric charging pods, EVs etc. Acquisition and mergers of similar or new business after due diligence, media campaign and close monitoring of CSR activities

In addition, Government has taken the following steps to achieve the target of augmentation of coal production capacity:

1. Single Window Clearance System has been launched.

2. Guidelines for procedure and approval of mining plan has been simplified.

3. Auctioning of coal mines for commercial sale of coal started.

4. Regular review and monitoring of allocated coal mines in the past.

5. Holding of Monitoring Committee meetings headed by Secretary (Coal) and concerned Chief Secretary of the state for early operationalisation of coal mines allocated.

6. Improving evacuation efficiency & capacity and construction of new railway lines.

7. Establishment of new washeries to enhance clean coal.

Source: PIB , PIB

Also Read: Sustainable Development of Coal Sector, Reforms in Coal Sector

Coal Stock Situation in Thermal Power Plants:

There are four reasons for the depletion of coal stocks at the power plant end- unprecedented increase in demand of electricity due to revival of economy; heavy rains in coal mine areas during September, 2021 thereby adversely affecting the coal production as well as despatch of coal from mines; increase in prices of imported coal to unprecedent high level leading to substantial reduction in power generation from imported coal based power plants leading to more dependence on domestic coal; non-building of adequate coal stocks before the onset of Monsoon. There are also legacy issues of heavy dues of coal companies from certain states viz., Maharashtra, Rajasthan, Tamil Nadu, UP, Rajasthan and Madhya Pradesh.

 A surge in revival of economy after second wave of Covid, led to unprecedented increase in demand and consumption of electricity. The daily consumption of electricity has crossed beyond 4 Billion units per day  and 65% to 70% demand is being met by coal fired power generation only, thereby increasing dependence on coal.

Power consumption for the period August-September has progressively increased from 106.6 BU per month in 2019 (normal non covid year) to 124.2 BU per month in 2021. During this period the share of coal-based generation has also increased from 61.91% in 2019 to 66.35% in 2021. As a consequence, total coal consumption in the month of August-Sept, 2021 has increased by 18% in comparison to corresponding period in 2019.

Imported coal price of Indonesian coal jumped from $60/ton in March-2021 to $160/ton (in Sept /Oct, 2021) of 5000 GAR (Gross as received) coal. The import of coal has decreased in comparison to 2019-20 due to import substitution and rising prices of imported coal. The reduction of imported coal is compensated by the domestic coal for power generation, hence increasing the demand for domestic coal further. As compared to 2019, there has been  43.6% reduction in power generation from imported coal which led to extra demand of 17.4 MT of domestic coal during Apr-Sept,2021.

Source: PIB

Categories: POINT IAS

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