Coal is here to stay despite India's ambitious renewable energy goals

New Delhi: Coal is dirty -- it makes up for 40 per cent of carbon dioxide emissions from fossil fuels, its mining wreaks havoc on the environment and burning it produces pollutants like mercury which are linked to acid rain and particulate matter that causes respiratory illnesses. But the war in Ukraine has caused a mini-energy crisis globally, pushing its use to record levels this year.

And India, the world's third largest energy consumer, was at the forefront of the global rise in coal usage as it fell back on the easiest available fossil fuel in the face of a surge in oil and gas prices that threatened to derail the economic recovery from the pandemic.

The trends of coal consumption and production this year indicate that the dirty fuel is here to stay despite the nation's ambitious target of meeting 50 per cent of energy requirements from renewable energy and non-fossil fuel capacity of 500 GW by 2030.

India's coal consumption has doubled since 2007 at an annual growth rate of 6 per cent and the International Energy Agency (IEA) estimates that the largest increase in the fuel's demand globally this year was from India (7 per cent or an addition of 70 million tonnes). This on top of a 14 per cent rebound in 2021, and 1,033 million tonnes consumption in 2022.

And this demand is led by its electricity generation which is overly reliant on coal. Coal-fired electricity generation accounts for about 73 per cent of India's overall power needs and is likely to remain the most important source of electricity in the foreseeable future. Coal-fired power plants make up 50 per cent of the overall installed capacity of 404 GW connected to grids, with another 25 GW currently under construction.

The IEA expects India's coal demand to rise steadily to 1,220 million tonnes in 2025, with 92 per cent of this going into electricity generation. Electricity demand too is seen growing at 7 per cent.

The government, which has been propagating self-reliance and cutting down imports, has been pushing for raising domestic coal production not just to meet the surge in demand but also to avoid summer blackouts.

Coal production in 2021 reached 800 million tonnes for the first time and is forecast to surpass 1 billion tonnes by 2025.

Nevertheless, by targeting a share of 50 per cent renewables in its power mix by 2030, the government is in the medium term seeking to alleviate the electricity sector's dependency on coal and reduce the cost of energy generation. It mandated 81 coal fired power plants to reduce power generation by a total of about 58 terawatt-hour (TWh) over the next four years, however, without shutting down any of the country's 172 power plants connected to the grid.

The coal ministry plans to boost the country's output to one billion tonnes in the next financial year and aims to see highest production and dispatch in the coming year 2023.

The ministry also desires to make some significant achievements in the area of coal gasification in the new year.

Speaking to PTI, Coal and Mines Minister Pralhad Joshi unveiled the plans for the next year and said the coal output of one billion tonnes will come from different sources which consist of state-owned CIL, commercial mines and captive coal blocks.

"We want to see that there is highest production and dispatch as far as coal is concerned. The entire coal production in the country will be one billion tonnes," Joshi said.

Coal India (CIL) accounts for over 80 per cent of domestic coal output.

In the mineral sector, Joshi said, the Centre is eyeing some more amendments in the mining act which can happen in the second half of the Budget session of Parliament. Besides, the ministry plans to put on sale 500 mineral blocks in the financial year 2024-25.

India has come a long way. Joshi said earlier the country's production was 582 million tonnes and today it is 870 MT. This output will reach 900 million tonnes by the end of the current financial year.

The launch of the sixth tranche of commercial coal mines auction under which the government offered 141 blocks across 11 states -- the biggest auction so far for the key commodity -- is one of the achievements of his ministry in the current year, the coal minister explained.

Moreover, the minister stated the Centre's approval for granting a one-time window to government companies to surrender non-operational coal mines without penalty was another achievement of his ministry in the ongoing year.

However, Joshi expressed concerns over the delays in operationalisation of both coal and mineral blocks due to issues like land acquisition, and said there was a need to bring states on board for the same.

"I am not talking about any particular state. I don't want to do that because I have to ultimately take state governments into confidence and have to work. But there are some state governments which we are not able to bring on board," the minister noted.

Severe power cuts due to coal shortage in a number of states snowballed into a major political crisis as it came in an election year when two BJP-ruled states Himachal Pradesh and Gujarat -- the home state of Prime Minister Narendra Modi and Home Minister Amit Shah -- went to polls.

Power Minister R K Singh asserted that electricity shortage was primarily happening because states have not paid their dues to Coal India and are unable to lift the allocated dry fuel on time.

The states suffered prolonged blackouts as scorching heat waves boosted energy demand at a time when coal stockpiles were low.

That sent the officials to the drawing board to rework a coal supply plan to avert future crises. Coal-fired power plants were ordered to use imported fuel to operate at full capacity.

Stock norms were also revised. The revised norms mandated coal stock of 17 days at pit head stations and 26 days at non-pit head stations to be maintained by power plants from February to June every year.

India is the world's second-largest producer and consumer of coal. Three-quarters of the electricity produced in the country is through coal. India sits atop the world's third-highest reserves of the dry fuel and boasts of the world's largest coal mining company but per person consumption is still modest.

India imports a little under a quarter of its consumption -- much of it coking coal which is used in blast furnaces for producing steel and is not available domestically. Yet there are perpetual shortages.

In October 2021, India teetered on the brink of a power crisis when stocks at more than half of the country's 135 coal-fired plants ran critically low, or below 25 per cent of normal levels.