India is facing tough challenges in making required amounts of energy available to all. Almost 30 per cent of the nation’s population still do not have access to electricity. Without targeted global action, the International Energy Agency (IEA) estimates that in 2035, there will still be one billion people without access to electricity and 2.7 billion without access to clean cooking fuels (World Coal Association, 2012).
Globally, around 30 per cent of primary energy and 41 per cent of electricity generation is coal based (International Energy Agency, 2016). Coal is thus likely to play a major role complementing renewable energy sources and will be a key source of energy to address gaps in wind and solar powered electricity. According to the IEA, global electricity from coal is expected to grow by around 33 per cent till 2040. Demand for coal in south-east Asia alone is expected to increase 4.8 per cent a year through to 2035 (World Coal Association, 2015).
India’s situation is no different. With over 55 per cent share in primary energy supply and over 75 per cent share in electricity generation, coal is playing a critical role in supporting India’s energy plans. Further with over 308 billion tonnes of estimated coal resources and 44 billion tonnes of lignite resources, coal provides for energy security of the country compared to other resources (Ministry of Coal, 2017). Our dependence on coal is to continue for quite some time into the future.
Out of about 327 GW of currently installed generation capacity in India as of March 2017, about 192 GW (59 per cent) is coal based. Similarly, out of a total generation of about 1160 billion kilowatt hours (trillion watt hour – Twh) achieved in 2016-17 (excluding about 82 Twh from renewable sources), about 80 per cent was coal based (Central Electricity Authority, 2017). Of late, however, coal offtake is getting adversely affected due to poor financial conditions of a number of distribution companies across states.
Taking into account the Paris Agreement or Conference of Parties—CoP 21 protocol on combating climate change, the Ministry of Environment, Forests and Climate Change (MoEF&CC) has indicated the intended post 2020 actions to be achieved by 2030 under the Nationally Determined Contributions (NDCs). They are as follows:
- Commitment to reduce the emissions intensity of GDP by 33-35 per cent by 2030 over 2005 level;
- Forty per cent of the cumulative electric power installed capacity to be non-fossil fuel based energy by 2030, and
- Creation of an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030.(MoEF&CC, 2015).
It is envisaged that there will be universal access to electricity by 2030 and the per capita electricity supply will be more than 2500 Kwh per year compared to current level of 1010 Kwh (India Energy Forum, 2016).
As of 2016-17, India generated about 1160 Twh of energy excluding 82 Twh from renewables. The energy requirement by 2030 is projected to be about 2499 Twh which is envisaged to be met through about 1000 Twh from renewable energy sources and the balance mainly through coal (moef.gov.in). Thus coal has to play a critical role in the years to come despite a push to renewables.
Trends in country’s coal production over the last ten years indicate that from about 431 million tonnes in 2006-07, it has reached about 659 million tonnes in 2016-17, implying a compound average annual growth rate (CAGR) of 4.3 per cent (Ministry of Coal, 2017). As against this, the production is expected to grow by over 15 per cent if the demand for coal, particularly for power sector comes through in the next four years’ period. Further, the Indian government wants to replace import of non-coking coals (also known as thermal coals) through expansion of domestic production. However, import of coking coal would continue on account of resource constraints.
Challenges of the coal sector
Currently public sector coal companies namely, Coal India Ltd (CIL) with seven of its coal producing subsidiary companies and Singareni Collieries Co. Ltd. (SCCL) constitute about 93 per cent while others contribute about 7 per cent of coal production (Ministry of Coal, 2017). This share is likely to continue in the near future unless all the 84 captive blocks allocated to both private (31) and public sector companies (53) enter into production as planned. Currently coal mining is being done for commercial purposes only by the public sector. Private sector is mining coal for captive consumption. Therefore it is important to also permit private sectors to take up commercial coal mining for which the law has been amended in 2015 through Coal Mines Special Provisions Act. This needs offer of suitable coal blocks through auction to the private sector by the government.
The current overall productivity of about 7 tonnes per person needs to be significantly improved by CIL (Ministry of Coal, 2016). Improvement in productivity and mechanization will be important operational aspects of coal companies for enhancing the production. Similarly, improvement in safety of operations is another area which needs thorough retrospection and critical planning by coal companies for sustaining and enhancing the level of coal production.
Coal sector is facing tough challenges in land acquisition. Coal bearing states need to review their policies in making the required land available to coal companies. Land leasing may be an option. Also, compensation package in terms of annuity without the need for providing employment to the project affected persons may be a better way. It will reduce the cost of mining.
In case of opencast mining, large tracts of land are involved and the land use pattern undergoes change during the course of mining. Also air, water and sound pollution are causes of concern. In case of underground mining land subsidence is an issue. However, strict compliance of mitigation measures as per the conditions of environmental clearance addresses these issues although rigorous monitoring is important in achieving the same.
Of late surface miners—coal cutting machines, have emerged to be following an environment friendly technology for opencast mining, avoiding drilling and blasting. This reduces dust generation and ground vibrations with a provision for selective mining for quality improvement. Mass production technologies deploying continuous miners and longwall technology are able to provide a faster rate of extraction of coal even from deeper horizons.
Reclamation of mined out areas and afforestation are critical in bringing these areas to more or less its pre-mining conditions. As per the CIL, for each hectare of forest land diverted for mining, coal companies are afforesting about 2.5 hectares of land.
Central Mine Planning and Design Institute Ltd., (CMPDIL) reveals that about 21,000 hectares of mined out land was biologically reclaimed by the subsidiary companies of CIL against about 51,200 hectares of excavated area till March 2016. It may be mentioned that total mined out land is one where economic exploitation of coal is completed or reserves have been exhausted. Excavated areas need not necessarily cover coal bearing areas.
Coal quality is an area of concern due to high ash content in our coals. The government and industry have emphasised crushing, sizing and washing of coal to comply with environmental stipulations i.e., supply of coal of <34 per cent ash to thermal power stations if it needs to be transported over 500 km from the source or for those located at critically polluted load centres. Third party sampling at despatch end is taken up for addressing disputes on slippage of grade i.e. difference in grade of coal actually dispatched and the one contracted for between the consumer and coal supplier at this despatch point. Thermal coals are divided into 17 grades from G1 to G17 (the lowest grade) on the basis of gross calorific value of coal (GCV) or heat value. Sometimes the despatched grade of coal does not match with the billed one, which leads to slippage in quality or grade. Under such circumstances, the third party sampling is resorted to cross-check the quality of coal being despatched.
In addition to setting up of washeries by the public sector coal companies like CIL, it is also proposed to encourage and facilitate setting up of washeries by the end user companies or by a third party on behalf of consumers at pit heads wherever feasible. Commitment by consumers is critical for investing in washeries by coal companies. However, the power sector has exhibited reservations on use of washed coal due to the additional cost incurred for washing despite benefits in terms of economics and environment through use of washed coal. The additional cost is adversely affecting merit order despatch of power. This needs proper understanding and intervention by the government for promoting use of washed coal for power generation.
For strengthening coal evacuation, rail infrastructure is another critical link in the entire coal production chain. The three critical rail lines in three potential coalfields namely Tori-Shivpur-Katothia in North Karanpura of Jharkhand, Bhupdevpur-Kharsia-Dharamjaigarh in Mand-Raigarh of Chhattisgarh and Jharsuguda-Barpali in Ib valley of Odisha which are at an advanced stage of construction need to be completed on priority basis for realising the additional production potential from these areas.
Coal companies are also planning commercial extraction of coal bed methane (CBM)/coal mine methane (CMM) from their lease-hold areas. However, several contesting issues have to be sorted out by the Ministry of Petroleum and Natural Gas, which is in charge of commercial extraction of CBM.
Surface coal gasification is the method of converting coal into syngas using gasifiers on surface. This technology helps in extracting the available energy in coal more efficiently compared to burning of coals in boilers. One such effort is to revive the Talcher Fertiliser Plant using the coal for producing urea. Also production of methanol (transportation fuel) using coal resources and development of coal to liquids and coal to polychemicals are assuming priority. Further, development of the underground coal gasification policy is in place and identification of suitable blocks is underway. This would pave way for extracting energy from coal and lignite seams which are not mineable otherwise. Underground coal gasification is a technology which converts coal in situ into synthetic gas for use for power generation or fertiliser manufacture, etc.
As far as the power sector is concerned, all new coal based units would need to be super critical or ultra-supercritical technology based units. They are equipping themselves to comply with new environmental standards that will come into force from December 2017. Compliance of new environmental norms is envisaged to have an impact on capital expenditure (CapEx) with an additional investment of INR 1.15 cr to 2.5 cr per MW of installed capacity and would not be economical for plants with residual life of ten years or so. The additional CapEx would have an impact of INR 0.40 to 0.90 paise per unit on the cost of bulk supply of power (Central Electricity Regulatory Commission, 2017)
The high efficiency low emission (HELE) technologies, envisaged to reduce coal consumption, would assist in carrying forward our commitments towards climate change while meeting our energy needs. We should also consider carbon capture and use (CCU) for sustaining our dependence on coal.
It is important to address the following to enable the development of the coal sector:
- Enhancement of exploration activities for coal with a view to cover balance areas and also to cover resources under indicated and inferred categories into proved category.
- Coal production enhancement in line with the projected demand of power and other sectors to do away with imports of thermal coals. Proper demand projections considering the dynamics of energy sector.
- Introduction of commercial mining to supplement the efforts of national coal companies and to inculcate competition is important.
- Adoption of appropriate technologies for better productivity, environment friendly and improved safety provisions for coal production.
- Emphasis on enhancement of coal production from underground mines.
- Improvement of quality of coal through adoption of suitable technologies.
- Focus on lignite development for power generation.
- Emphasis on cutting edge clean coal technologies like development of coal bed methane, underground coal gasification, surface coal gasification, coal to liquids, and coal to poly chemicals etc.
- Emphasis on environmental management with a view to realise the objectives of sustainable development and the commitment made under NDCs.
- Focussed approach on research and development in the coal sector.
- Innovative land acquisition models and simplified procedures for obtaining statutory clearances.
- Strengthening rail infrastructure for coal evacuation.
Coal is an important driver of affordable and reliable energy to support economic development and competitiveness. It plays a major role in industrialising and urbanising economies including India. Despite accelerated efforts for enhancing renewable energy, it is envisaged that coal will continue to play an important role in meeting country’s energy requirements up to 2030 and beyond.