Indian Power Sector: Coal will continue to Dominate through to 2040

December.14 Coal

Coal will continue to make the largest contribution to electricity generation in India through to 2040

The World Coal Association (WCA) has welcomed news that Moody's has upgraded the outlook for India's power sector to stable from negative in view of surge in domestic coal production.

The government wants Coal India to increase production of coal to 1 billion tonnes a year by 2020 from around 539 million tonnes in the fiscal year that ended in March. It wants India as a whole to produce 1.5 billion tonnes a year by 2020.

INDIA COAL PRODUCTION

Through sustained programme of investment and greater thrust on application of modern technologies, it has been possible to raise the production of coal from a level of about 70 million tonnes at the time of nationalization of coal mines in early 1970's to 638.05 (Prov.) million tonnes (All India) in 2015-16.

Coal India limited and its subsidiaries accounted for 538.75 million tonnes (including Gare-Palma block) during 2015-16 as against a production of 494.23 million tonnes in 2014-15 showing a growth of 9%.

INDIA COAL IMPORT DATA

Coking Coal is being imported by Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality. Coal based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal. Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnace.

Details of import of coal and products i.e. coke during the last six years is as under:
(Million tonnes)
*Import upto May, 2016

The ratings agency announced this in its outlook investors service report Power Sector - Asia Pacific: 2017 Outlook-Rising Industry Challenges Are Manageable, Outlook Stable.

Commenting on the news, WCA CEO, Benjamin Sporton said: “It is really positive to see that the Modi government reforms are having an impact on India’s power sector, and points to the important role coal is playing in the country’s socio-economic development. The WCA will continue to support India’s energy sector, especially in the deployment of available technologies that will ensure coal is used as cleanly as possible.”

According to the International Energy Agency (IEA), coal will continue to make the largest contribution to electricity generation in India through to 2040. The country is also predicted to drive global demand for coal in the decades to come.

“It’s clear that for India, excluding coal from the energy mix is not an option – It is essential for the country’s continued economic growth and critical for energy security. As with many developing economies, India needs all sources of energy available to meet its growing energy needs using the best possible technology” Sporton added.

Source from Virendra Patil, Associate Manager - Sales & Mktg, BD of SC Boilers, Power Plants at TBWES