INDIA’S COAL SECTOR – PROSPECTS AND CHALLENGES

Context - On July 13, three workers died of asphyxiation inside an illegal coal mine in Gujarat’s Surendranagar district.

What is the present status?

The installed generation capacity of coal and other fossil based resources is as follow:

India is 5^th when it comes to total coal reserves in the world.
In the last 10 years, domestic coal production has increased over 55 per cent and much of it has come over the last 5 years.
Annual coal production almost doubled from 565.77 million tonnes (mt) in FY14 to 997.4 mt in FY24,production surpassing a billion tonnes (bt) being the key achievement.
India aims to achieve a production of 1.5 bt by FY30 as the country’s power demand is likely to double by the end of the current decade.

Around 50% of the installed generation capacity comes from coal.
Huge demand - Due to the rising population, coal consumption has nearly doubled in the last decade.
Employment - Coal industry employs as many as four million people.
Sectors like steel, aluminium and cement are highly dependent on coal.
Large-scale sourcing of non-fossil fuels is quite challenging.
- Coal is cheaper than all other sources of energy.
- High cost of manufacturing & installation of solar energy.
- Unstable nature of Tidal, Solar energy.
- Lack of renewable energy infrastructure in rural areas.

Poor quality - High ash content, lack of high grade anthracite and bituminous coal.
Virtual monopoly: Coal India ltd commands the maximum share of coal production discouraging private investment and competition.
Environmental concern - India's coal-based power sector accounts for approximately 2.4% of global greenhouse gas (GHG) emissions, 33% of India's GHG emissions, and around 50% of the country's fuel related emissions.
Quality of captive mines: Poor quality of captive mines being awarded to private players decreases their presence as well as production.
Illegal mining which not only is detrimental for the environment but also causes death of workers due to inhalation of toxic gasses and lack of protective gears. Also because it is considered as law and order issue, centre generally leaves it for the state government.
Other issues like issues land acquisition, green movements, strict rules & regulations.
International pressure by developed countries to phase out the coal based plants.

Attract private players by promoting transparency and ease of doing business.
Promote alternate uses of coal in sectors like coal gasification to use the surplus production of coal which is expected by 2026.
Upgrading existing coal based plants by retrofitting of thermal plants to ensure minimal Sulphur emissions, investing in supercritical technology and adopting CCUS methods.
Coal trading exchange can be set up by an exchange operator so that the g government only provides a platform to the sellers and the buyers of the fuel. The coal trading exchange could be similar to such platforms in the power and natural gas.
Leveraging technology to curb illegal mining especially in North East.
Investing in renewable energy by creating solar, wind parks, providing financial incentives and grid integration for renewable energy projects.
Enhancing energy efficiency by Enforcing energy-efficient building codes and promoting standards and labelling programs.
Policy reforms like carbon pricing can create economic incentives to reduce emissions and Renewable Purchase Obligations (RPOs) can mandate utilities to purchase a certain percentage of power from renewable sources.
International cooperation for climate finance to support renewable energy projects and technology transfer to bring advanced clean energy technologies to India, accelerating the transition to a low-carbon economy.