India’s appetite for coal

Energy hungry India has a voracious appetite for coal. But the country’s coal companies – mostly state-owned – are unable to efficiently mine the stuff and transport them to the power plants, cement factories, steel manufacturers and other bulk consumers in a cost-effective way.

India is facing a demand-supply gap in coal of a hefty 55 million tonnes, which is growing sharply. With the economy growing at over nine per cent annually, demand for power is expected to surge. The country is already facing an acute power shortage, and the government is making efforts to raise capacities.
The government’s Integrated Energy Policy estimates that to sustain a growth rate of over eight per cent over the next 25 years, India needs to raise its primary energy supply by almost four times, and its electricity generation capacity by nearly six times.

India currently has a power generating capacity of 160,000 MW (which includes captive power plants), and the government has set up a target of a whopping 800,000 MW for the year 2031-32.

”In order to deliver a sustained economic growth rate of eight per cent, the power generation capacity has to increase from the capacity of around 160,000 MW (inclusive of all captive plants) to nearly 800,000 MW by 2031-32,” says power minister Sushil Kumar Shinde.

At present, coal accounts for nearly two-thirds of India’s power generation, with hydro-power contributing a quarter, and the remaining 10 per cent by renewable energy and nuclear power (about three per cent). Though the share of hydro, gas and other sources will continue growing over the coming years, coal will dominate the power sector in the foreseeable future.

The government is promoting seven new ultra mega power plants, each with a 4,000 MW capacity. All these plants, being developed by private players, will be using coal to generate electricity. Some of the plants are being developed near coal mines, ensuring regular supplies.

According to the Planning Commission, India’s coal requirements may surge to as high as 2.5 billion tonnes by 2031-32, when the power generating capacity is expected to be around 800,000 MW. Demand for coal is around 600 million tonnes at present, and is expected to leap by about 25 per cent over the next three to four years, by when an additional 100,000 MW of power generating capacity is likely to be added. The power sector alone would require about 550 million tonnes of coal by 2011-12.

Dawn