India’s strategic push with coal

Bishaldeep Kakati

(deep.kakati99@gmail.com)

The non-renewable source of energy, coal, is a vital and in dispensable element for complying with the energy demands of India. India’s demand for coal has substantially increased over the years, and according to reports, in 2021, India’s coal consumption increased by 12%, or 117 MT, as compared to 2020. In fact, the Economic Survey of 2021–22, taking into reference the Draft National Energy Policy of Niti Aayog, estimated that the demand for coal in the country would be in the range of 1.3–1.5 billion metric tonnes by 2030. With the onset of rapid growth in industrialization, urbanisation, and population, India’s demand for energy has conspicuously doubled since 2000. NDIA has also been successful in generating household access to electricity for over 900 million citizens of the nation in less than two decades, and that too has enhanced the demand for energy in India. Over 80% of India’s energy demands are met by three fuels: coal, oil, and solid biomass; in fact, coal itself accounts for 55% of the country’s energy needs. The extracted coal is often used to make electricity, cement, and steel, and it is also an essential element for metallurgical processes as well as for generating electrical power using steam. Additionally, the gasification and liquefaction of coal also help in the production of liquid and gaseous fuels. As such, it will be a bit difficult for India to avoid using coal despite its commitment to using clean energy.

With the ever-increasing demand for coal in India, the nation has also been able to come up with encouraging statistics and data in terms of its coal production. According to data, India has achieved 47% growth in coal production during the last nine years. In fact, in the financial year 2023, India had coal production of 893.08 million metric tonnes and aims for 1012 million metric tonnes by 2023–24. The production of coal in the financial year 2023 was the highest recorded coal production in a year in the history of the country. In August 2021, the government also launched ‘Mission Coking Coal’ to come up with better ways to enhance the productivity and utilisation of domestic coking coal in India by 2030. In addition to it, India has one of the largest coal reserves on the globe, with a coal reserve of 361411.46 million metric tonnes as of April 1, 2022. Among the states of India, Jharkhand is the largest coal-producing state, and states like Orissa, Chattisgarh, West Bengal, and Madhya Pradesh are some of the top producers of coal in India.

India’s remarkable result in terms of coal production has multifaceted aspects related to it. The enhanced production not only serves as a crucial factor for the purpose of meeting the demands of the country’s energy security and self-reliance, but it can also help the nation in terms of developing diplomatic relations with its neighbouring countries and, at the same time, strengthening its international ties with western countries. Coal India Limited has estimated that in the next 5 years it is going to launch 55 new coal mines and expand at least 193 existing ones. If these initiatives become a reality, then they can enhance the production of coal by 400 million metric tonnes. In addition to it, Coal India Limited has about 463 coal blocks, via which it is presumed that the country can produce coal for another 275 years. In fact, some of the largest coal mines in India, which include Gevra OC Mine, Bhubaneswari OCP Mine, Dipka OC Project, Kusmunda OC Mine, and Lakhanpur OC Mine, together produced around 139.9 million metric tonnes of coal, or 148.85 mmtpa of ROM, in 2021. As such, the rate at which the country is producing coal is encouraging, as it allows the country to meet its growing power demand while also boosting the economy directly or indirectly.

Moreover, India still exports around 1 million to 2 million metric tonnes of coal every year to its neighbouring countries of Bangladesh and Nepal, out of which a significant 77.20% goes to Nepal and 13.04% to Bangladesh. In fact, the country may also export 30 million metric tonnes per year of coal to Sri Lanka by 2030. This data came into the scheme of things from the draft version of the Integrated Coal Logistic Plan’, issued by the federal coal ministry for the purpose of consultation with stakeholders. But amidst the country’s enhanced production rate of coal as well as its exports, it still imported 162.46 million metric tonnes of coal in 2022–23, which was an increase of 30% as compared to the previous year. The situation, therefore, is a very thought-provoking one, where on the one hand, India has been successful in enhancing its coal production, but on the other hand, with each passing year, the country’s energy demand is also increasing, which is enhancing India’s import of coal. But if somehow India can find an alternative way to meet its energy demands and, at the same time, keep on enhancing its coal production, it can play the role of a game changer globally.

Reports suggest that global coal consumption will rise in 2022. This is because the cost of natural gas escalated amid the global energy crisis, and the countries are now relying on coal for power generation. In fact, with the Russia-Ukraine crisis, Russia has also sharply reduced the flow of natural gas to Europe, and this has resulted in Europe increasing its coal consumption for the second year in a row. The continent of Australia, which is a key international supplier of coal, has also been affected for many reasons. As such, if India can somehow reduce its usage of coal in comparison to its production, then the country can play a significant role in meeting the requirement for coal for global energy production. However, in the current context, that still looks like an achievement that will be hard to achieve easily, but with the substantial increase in coal production in India, the scenario presently looks encouraging.

Nevertheless, with the enhanced demand for coal globally, the countries should also be careful about the prospect of coal being a non-renewable source of energy that might get exhausted soon and, at the same time, the process of combustion of coal for the purpose of energy generation, which significantly has an adverse effect on the climate.