Was 2017 the year of Peak Indian Coal? - co authored with Pooja Chatterjee

Like it or not, coal has a special place in India.

According to the Indian Supreme Court. (Indian Supreme Court, 2012, 1), ‘Coal is king and paramount Lord of industry is an old saying in the industrial world.. In India, coal is the most important indigenous energy resource and remains the dominant fuel for power generation and many industrial applications… It is no exaggeration that coal is regarded by many as the black diamond.’ 

In January 2018, the 334 plus GW of electrical power generated by coal accounted for 58% of Indian installed capacity (CEA, 2018, p.1), with a further 65 GW of thermal power capacity under construction. In terms of actual electrical power generation coal burning in India produced a percentage (76%) that is starkly higher than this bare majority of installed capacity (Shahi, 2018).

On the coal mining side, India’s Three Year Action Agenda (NITI Aayog, 2017, p.99), mandates the coal exploration (and where commercially viable, extraction) of a quarter of India’s remaining ‘untapped 5,100 sq km balance coal bearing area to ensure availability of more coal mining blocks’; and, equally, a conversion of a quart of India’s ‘139.15 billion tonnes of coal reserves as on 31st March, 2016 in the “Indicated” category into “Proved” category by engaging top exploration companies with attractive contractual provisions’.

Commercial extraction in India dates at least as far back as 1774, which year saw the extraction from the Ranjigang coalfield through the mining operations of the (British) East India Company. Collieries operated by the Eastern Coalfields Limited continue to mine the same stretch of West Bengali coal today, in 2019, and the Indian coal mining industry as a whole has developed into a behemoth throughout first colonial and then independent rule.

Perhaps because it is so natural to extrapolate from the past to the future ‘many policymakers and analysts believe that (coal) must remain the primary source of (Indian) electricity generation for at least the next three to four decades, … (consistent with) ever-expanding (Indian) coal power generation’.

Such is Indian demand for coal that, despite mining huge quantities of coal the nation also requires huge levels of imports too – for both simple reasons of scale but also of quality: Indian coal is both low in calorific, and high in ash, content, not a great combination and one requiring of amelioration through coal blending with foreign imports, even once the limited beneficiation of coal washing of Indian coal has been effected. For example, In financial year 2015/6, India mined over 536 million metric tonnes of coal (NITI Aayog, 2017 p.99), ranking thereby as the 2^nd highest level of mined output anywhere in the world producer (IEA, 2017, p.17), yet still required an additional 200 million metric tonnes of coal imports. A long-term model Chikkatur et al. (2007, p.3745) of Indian coal imports made in 2007 forecast annual increases averaging at 5.5%, a figure that becomes frankly scary once compounded.

The dirtiest and lowest calorific value coal, and hence the most inefficient to burn, is brown coal, also known as lignite. Lignite is mined in both southern India, especially the state of Tamil Nadu, and in the north, in particular in Gujarat. It is primarily used by the electricity generation sector, which accounts for 90% of consumption, and its total use by that industry and others (e.g. cement) is increasing, notably from just 31 MMT in 2006-07 up by nearly 40% to 43 million metric tonnes in 2015-16 (Ministry of Statistics and Programme Implementation, 2017, p.41).  

Perhaps a turning point has now been reached. If so, 2017 may be the year that history dates that change to.   Here is some supporting evidence:

• India’s Three Year Action Agenda of 2017 calls for both a reduction in the levels of coal imports and also a diversification in their sourcing: ‘it is important that India increases its domestic coal production to provide energy security and reduce its dependence on imports. The energy security may be further enhanced through diversification of the import sources’ (NITI Aayog, 2017, p.99);
• Imports in December 2017 were fully one quarter down on the previous December;
• Indian’s National Electricity Plan mandates, for the period 2017-2027 (and by implication there onwards), zero additional thermal coal power capacity construction beyond that already being undertaken, noting that “‘capacity addition from gas (of) 4,340 MW, hydro (of) 15,330 MW, nuclear is 2800 MW and renewables (of) 1,15,326 MW, as committed capacity during 2017-22’” will effectively crowd out the need for any more coal burning; and
• India’s Minister of Railways and Coal, Piyush Goyal stated that the All-India Government that he was a part of ‘aims to eliminate coal dependency in the next few years’, a startling ambition, and one to be welcomed in the context of the sustainability imperative of tackling anthropogenic climate change.

Even in India, rational grounds for coal divestment optimism exist.

Additional Reference List: 

• CEA, 2018a, All Indian Installed Capacity (in MW) of Power Stations (as on 31.1.2018) (Utilities). New Delhi: CEA;
• Chikkatur, A. et al., 2009. Tariff-based incentives for improving coal-power-plant efficiencies in India. Energy 35 (2007) pp. 3744 – 3758;
• IEA, 2017. Key World Energy Statistics. Paris: IEA;
• Indian Supreme Court, Writ Petition No. 120 of 2012, 2012;
• Ministry of Statistics and Programme Implementation, 2017. Energy Statistics, 2017. New Delhi: Central Statistics Office, Ministry Of Statistics and Programme Implementation;
• NITI Aayog, 2017. India Three Year Action Agenda. New Delhi: NITI Aayog; and
• Shahi, R., 2007. Towards Powering India: Policy Initiatives and Implementation Strategy. New Delhi: Excel Books.

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NB: the emblem at the top of this post, by the way, is that of my old primary school in Oxford - disconcertingly now a kindergarten / nursery - Headington Quarry School, which is built in a former stone quarry; local street names include Pitts Road.  Clay for brick making was also mined, by hand, locally too - we would now call this "Artisanal and Small-scale Mining" (ASM) if it were still happening today, but I guess the term is anachronistic in a 19th Century context.