1 hour ago – Govt releases draft rules for e-auction of cancelled coal blocks HT Correspondent , Hindustan Times New Delhi, December 18, 2014 First Published: 23:25 …
Govt releases draft rules for e-auction of cancelled coal blocks
HT Correspondent, Hindustan Times New Delhi, December 18, 2014
The government on Thursday released draft rules for e-auction of cancelled coal mines in an approach paper that is open for public consultation.
The coal ministry has sought comments from stakeholders by Monday. The government said coal mines shall be earmarked for different end-use sectors and allocated through a competitive bidding process of e-auction.
The approach paper proposes the e-auction of the 204 coal mines that were cancelled by the Supreme Court in September 2014, fixing a floor price of Rs. 150 per tonne for sectors such as steel, sponge iron, cement and captive power.
In the first phase the government plans to e-auction and allot 92 coal blocks under the Coal Mines (Special Provisions) Ordinance 2014.
The intrinsic value of the coal block will be calculated by computing its net present value, based on the discounted cash flow method. Operators will have to pay 10% of the intrinsic value upfront.
The approach paper has pointed that the floor price shall not be less than Rs. 150 per tonne. The ceiling price of the prevailing Coal India Ltd notified price for each coal mine will be fixed and the bidder will be mandated to quote lower than this ceiling price, states the approach paper.
A fixed reserve price of Rs. 100 per tonne of coal shall be payable, as per actual production by the mine allottee.
For power plants having uncontracted capacity, the bidder shall be restricted to cap its merchant capacity at 20% of the installed power capacity linked to the allotted coal mine. The reserve price in such cases shall not be less than Rs. 150 per tonne, stated the approach paper.
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DETAILS OF COAL BLOCKS ALLOCATED AS ON 23.06.2011
Coal India to use GPS to stop pilferage
It was announced in November 2011 that Coal India
would use satellite technology to prevent shipments from being hijacked
amid a shortage that has hit supplies to thermal power projects in the
country. It is estimated that at least a quarter of 431 million tonnes
of coal was stolen in transit.
Citizens Groups Tracking Coal Power and Mining in India
Conservation Action Trust
Environmental Protection Group, Orissa
India Youth Climate Network
Jharkhand Mines Area Coordination Committee
Kalpavriksh Environment Action Group
Kuntala Lahiri Dutta Australia
Mines, Minerals and People
Ministry of Coal (India)
As of 2011, India has become the world’s second largest source of carbon credits,
or Certified Emission Reductions (CERs), and has attracted foreign
companies who trade them to the West. To qualify for saleable credits,
companies in “developing” countries must demonstrate their emission
reductions go beyond their “business as usual” plans. But according to
July 2008 American diplomatic cables released by Wikileaks,
most credits certified in India are questionable and do not meet
international standards. The cable, written by staff at the United
States Consulate in Mumbai, quote a senior Indian carbon credit assessor
admitting no projects in India meet the international benchmark. R K
Sethi, head of India’s Clean Development Mechanism
Authority, admitted his colleagues simply take “the project developer
at his word” when they approve carbon credit applications. Eva Filzmoser
of CDM Watch, which campaigns for a more rigorous carbon credit system,
said the cable effectively dismissed Indian schemes as “a source of
extra revenue for projects that would have happened anyway.”
Thirty-three coal power plants were among 1700 carbon credit project
bids in India, and four of the power stations are among 700 projects
approved to date.
A 2011 Stockholm Environment Institute report found that project documents for Indian Clean Development Mechanism
projects “inflate the benefits of switching from subcritical to
supercritical technology. Specifications of technologies currently
available in the market suggest the relative efficiency and emissions
improvements are likely to be on the order of 2 to 4%. In contrast,
these coal projects are claiming improvements on the order of at least
11%, on average.”
November 2011: Activist nun who fought Indian mining companies brutally murdered
In mid-November 2011 Sister Valsa John, an anti-coal activist in India, was killed in her village of Pachwara,
a small community in the eastern Indian state of Jharkhand. She was
allegedly killed by individuals hired by coal mining companies. The
individuals beat and hacked her to death. Sister Valsa was 52 and took
her vows was a member of Sisters of Charity of Jesus and Mary. It was
reported that on numerous occasions she had gone to the police after
threats where made on her life. The following was written in the Globe
and Mail following her death:
She was one of the remarkable breed of Indian religious figures who
are grassroots social activists, who immerse themselves in the most
marginalized and impoverished communities and work on literacy, basic
health care and human rights. Sister Valsa said she did Jesus’s work by
teaching the aboriginal people – known in India as adivasi or “tribals” –
about their rights to their land.
On November 20, 2011 seven residents of Pachwara and adjoining
Aloopara village, were arrested for the killing of Sister Valsa John.
The Sister’s family in the India region of Kerala had alleged she faced
death threats from the “mining mafia” in the area and was killed because
of her campaign against the Panam Coal Company. However, police alleged
that that locals were responsible for her death instead.
Prior to being killed, Sister Valsa John stood up for a rape victim
in her community and a police report filed for the case. The alleged
rapist, arrested days after the murder and later charged with that too,
reportedly told the police that Sister Valsa was “an agent” of a private
September 2011: Moving Planet day of action
On September 24, an Indian delegation and US mountaintop removal
activists will take part in “Moving Planet” day in support of fossil
fuel-alternative energy, in West Virginia and India. The India
delegation is calling on the World Bank to follow through with its
proposal to dramatically cut funding for coal-burning power stations.
September 2011: Greenpeace calls for moratorium on new coal projects in Singrauli
After releasing the 2011 report, “Singrauli: The Coal Curse,”
Greenpeace called for a moratorium on new coal mining activities in the
Singrauli region, based on the findings of a Greenpeace team in the
region that the projects “deprive the livelihood of displaced people and
ruin their health.” According to Priya Pillai, the communities are
living in an atmosphere which is full of coal dust: “The people gave up their land for power that doesn’t reach them.”
In Singrauli, the Mahan, Chhatrasal, Amelia and Dongri Tal II forest
blocks, which were earlier categorised as ‘no go’, are awaiting approval
for coal mining from the government. Officially, 5,872.18 hectares of
forest in the Singrauli region had been marked for non-forest use after
the Forest Conservation Act came into force in 1980. According to the
divisional forest officer of Singrauli, another 3,229 hectares have been
proposed for such activities.
Singrauli is all set to become the country’s “power capital” with a
number of power plants coming up in Madhya Pradesh, apart from the nine
open cast coal mines which are going to start production by 2014. The
combined investment of all these projects is estimated to be over Rs 1
May 2011: Mango farmers protest coal plants in Maharashtra’s Ratnagiri district
Farmers marched to protest coal plants in Ratnagiri district of
Maharashtra, in an area known as the Konkan Coast. The protests were
organized by the Ratnagiri Zilla Jagruk Manch, an organization leading a
campaign against seven thermal power plants proposed for the district.
In Pawas, Ratnagiri district, villagers protested with a hunger strike.
In July 2011, JSW Energy
– an Indian power producer controlled by the billionaire Jindal family –
delayed expansion of a 3,200 MW coal plant in Ratnagiri as it waits for
coal-pricing “clarity” from Indonesia and Australia.
June 2011: Three deaths believed to be related to coal mafia
On June 2, 2011, a 15-member motorbike gang shot dead a realtor and
two others at the Asansol courthouse in India, which the police said was
likely a rivalry between coal mafias. Councillor Rohit Nunia from
Kulti, a town 30km from Asansol whose municipality is run by a
Trinamul-Congress alliance, is believed by police to be involved in coal
smuggling and seeking revenge for an attempt on his life in December
2010, although a Left Front leader claimed the coal connection crosses
The 15 youths appeared suddenly, called realtor Ram Lakshman Yadav’s
name, and began shooting. Within seconds, the realtor, a guard, and
Mukesh Singh, had slumped to the ground while the gang chased Kamalesh
Singh to the basement. Mukesh was sent to a hospital in Durgapur while
the other three were declared dead on arrival at an Asansol hospital.
Yadav had been riddled with 10 bullets, sources said, and the other two
slain men too had multiple wounds.
Jagmohan, the deputy inspector-general, said the slain realtor had
two cases pending against him, one for possession of illegal arms in
1994 and the other for a murder attempt in 1999. Another officer said
three suspects had been detained, including CPI councillor Nunia: “An
attempt was made on Nunia’s life six months ago but he escaped unhurt.
He was involved in smuggling coal out of the IISCO factory.”
April 2011: Four killed in protests against anti-encroachment drive in Jharkand
The state of Jharkhand is home to one of the largest Adivasi (tribal)
populations in India. It is also the location of an estimated 40% of
the country’s deposits of coal, iron ore, uranium and other minerals.
Jharkhand’s Adivasis have farmed and hunted on the land for millennia,
but do not hold title deeds, but as the original inhabitants of the
Indian subcontinent, Adivasis have ancient land rights protected by law.
They are, however, being forced to leave their ancestral lands to make
way for new mines, steel mills and hydroelectric projects, with little
or no compensation.
Following resistance by local residence against house demolitions at
Matkoria, four people were killed in clashes with police attempting to
clear land owned by Bharat Coking Coal Limited. In addition, 21 people
were injured and 27 arrested. Among the arrested were former ministers
Bacha Singh and OP lal, Congress MLA Manan Mallick, and deputy mayor
Niraj Singh. A curfew was imposed on Dhanbad town. Among those killed in the fighting was Vikash Kuman, an auto driver. Another fatality was that of Sanjay Paswan.The
protesters blocked National Highway 32 between Dhanbad and Bokaro for
several hours. Police used lathis and teargas to disperse protesters. A
Mob set fire to offices of Bharat Coking Coal Limited at Kunsunda and
Godhar. Protesters also set on fire a police check post in Matkuriya as
well as three police vehicles. Nine people were reported in critical
condition with bullet wounds. Among the injured were a half dozen
members of the media, including four camera men. Most of those being
subjected to the anti-encroachment drive had settled in the area 80
January 2011: 25 people injured in Chhattisgarh protests
On January 17, 2011, at least 25 people were injured and over a
hundred were taken into custody during protests by farmers against land
acquisition by KSK Energy Ventures Limited, sponsors of the 3,600 MW KSK Mahanadi Power Project
at Nariyara village in the Akaltara district of Chhattisgarh, about 170
km from the state capital Raipur. At issue in the protests is the prime
quality of the agricultural land being made available for an estimated
40,000 MW of power plants planned for the Janjgir-Champa district. State
Congress president Dhanendra Sahu told reporters, “It’s a foolish
decision, Janjgir-Champa has highly productive farm land and also has
access to irrigation facilities. This is a conspiracy by the state
government to hand over farmers’ prime land to industries.”
February 2011: Two killed, 25 injured in Andhra Pradesh
“No power to people?”
On February 28, 2011, in a set of clashes sparked by construction of the Bhavanapadu Thermal Power Project by East Coast Energy,
police in Srikakulam fired into villagers, killing two people and
injuring nearly 25 others. The plant at the center of the violence was
in the same district as the coal plant where two people were killed the
previous July 2010, protesting the Nagarjuna Construction Company Sompeta Thermal Plant.
The dead were identified as Sirapu Yerraiah (36) of Sirapuvani Peta and
J. Nageswara Rao (35) of Akashalakkavaram. At least two of the injured
were hit at close range with rubber bullets. Police used guns, teargas,
and lathis against villagers, who used stones and sticks. After police
threw smoke bombs in Vadditandra village, 50 houses were gutted. A
police jeep was burned by villagers.
January 2010: Hanakon thermal project shelved after intense protest; protesters tortured
Unidentified woman arrested during Hanakon protest; 28 protesters later testified to torture while in police custody
On July 18, 2009, thousands rallied in Karwar to protest the proposed
Hanakon thermal station. The rally began at the Maladevi ground, and
was followed by a meeting at Savitha circle. A series of speakers
denounced the project as a threat to a biologically sensitive region,
and criticized the company’s suppression of protest. The protest passed
the office of Ind Bharat Company, sponsor of the project. Protesters
allegedly pelted the offices with stones, then attempted to block the
national highway. A coalition of 24 groups submitted a joint memorandum
opposing the project.
Following a call for a bandh, or general strike, in response to police
violence against protesters in Hanakon village, schools and colleges
closed in August 2009. The bandh was also observed by shopkeepers of
Nandanagadda area of Karwar. Students from multiple colleges marched to
primary and high schools in Karwar, closing in each school. The project was shelved in January 2010.
According to S R Nayak, chairman of the State Human Rights Commission,
police tortured agitators in custody. During a hearing sponsored by the
Commission, 40 people testified, including 28 victims of torture at the
hands of police.
July 2010: Two killed, 150 injured in Andhra Pradesh
July 2010: Protesters beaten with lathis by riot police in Srikakulam
On July 14, 2010, police in Adhra Pradesh’s Srikakulam district fired
on farmers and fisherman protesting a 2,640 MW coal plant under
construction by Nagarjuna Construction Company
(NCC), killing two. In addition, 150 people were injured, including 45
policemen, during clashes between protesters and police. In the wake of
the violence, police were deployed in about a dozen villages and banned
assembly by more than five persons.
World Bank financing
In October 2010 Green groups criticized the U.S. Export-Import Bank
(Ex-Im Bank) for its expected final approval of hundreds of millions of
dollars in subsidized federal financing for the 4,000 megawatts (MW)
Sasan coal power plant and mine in India.
The groups also accused the Bank of falsely linking renegotiation of the coal financing to a renewable energy project.
“Ex-Im Bank flip flopped on this massive climate-damaging
project–and belly flopped on the first major test of the agency’s
carbon policy,” said Michelle Chan, director of the economic policy
program at Friends of the Earth.
Community impacts and resistance
The United Nations estimates that more than 25 percent of India’s 1.2
billion people live without electricity. Yet many communities protest
new coal mines and plants because it displaces them from their land, and
they do not receive the electricity generated.
August 2007: 6,000 people face displacement in Madhya Pradesh
Five villages — Sidhikhurg, Sidhikala, Tiyara, Jhanjhi, and Harrhawa
— covering approximately 3,000 acres and with a population of 10,000
people are slated for displacement by the Sasan Ultra Mega Power Project
in the far western corner of Madhya Pradesh, a state located in central
India. The project will use caol from coal mines located 20 to 25
kilometers away, in Mohar, Amlori, and Chatrasal. The project is
sponsored by Reliance Power.
Arrest of indigenous rights activists
On May 28, 2011, two indigenous rights activists, Ramesh Agrawal and
Dr Harihar Patel, were arrested in the central Indian state of
Chhattisgarh and denied release on bail.
The state police charged the two men with “circulating defamatory
material”, “disrupting public order” and “causing alarm and panic among
the public” at a May 8, 2010 mandatory public consultation, held by the
state pollution board at Tamnar village, relating to the proposed
expansion of a coal-fired plant run by Jindal Steel and Power.
Agrawal and Patel expressed concerns that the expansion would lead to
the forcible acquisition of lands from the surrounding local
communities by the authorities. The two activists had objected to the
proposal and cited an official inspection report which stated that the
expansion began before the mandatory clearances were given. Ramesh
Agrawal also successfully petitioned India’s Ministry of Environment and
Forests to temporarily suspend the terms of reference for the
expansion. Following a complaint relating to the delay, the state
authorities decided to arrest the two activists.
Ramesh Agrawal works for the environmental rights organization Jan
Chetna, and Dr Harihar Patel practices indigenous medicine. They had
been actively campaigning against the pollution caused by existing
industrial projects, including coal plants, and the potential negative
environmental impact of proposed industrial projects in central
Chhattisgarh. The two activists have been at the forefront of the
campaign for the public disclosure of information relating to projects
which affect local Adivasi (Indigenous) communities and for ensuring
that these are available to the communities. Their arrest, Amnesty
International believes, is intended to stop their peaceful campaign
The two activists were sent to Raigarh prison until June 3, 2011, and
a local court rejected their appeals for release on bail on June 2.
Ramesh Agrawal, who complained of hypertension, was taken for treatment
at a government-run hospital where he is being kept chained to his bed.
The report argues that: “These projects in pipeline represent a
massive overcapacity in the making. Thus, valuable and scarce natural
resources of land, water, gas and coal will be allocated to projects
that are not required. Crucially, land for such TPPs [thermal power
plants] is invariably acquired compulsorily by governments by using the
Land Acquisition Act (LAA), which allows forcible acquisition for a
public purpose. Given that the thermal capacity in pipeline is far in
excess of that required, it is clear that many of these plants will not
serve a public purpose. Hence, the use of the LAA to acquire land for
such TPPs cannot be justified.
“…The report therefore recommends an immediate moratorium on any
further environmental clearance to new power plants. Further, it also
recommends that from the 200,000 MW that have already been given
environmental clearance, projects with very high social and
environmental impacts, projects that do not have broad local acceptance,
and projects leading to sub-optimal use of transmission, fuel, land and
water should be put on hold. It also calls for simultaneously
initiating a fully transparent deliberative process to (a) completely
revamp the environmental clearance procedures of power plants, so as to
minimise social and environmental impacts of power projects, and mandate
prior regional carrying capacity studies to decide on the extent of
projects in an area, (b) to ensure a coordinated approach of different
agencies for optimising fuel, land and water allocations for different
projects and (c) to reassess the long term demand for power and measures
to meet this demand in an optimal manner, including energy efficiency
as well as renewable energy, so as to improve energy security and
minimise the social and environmental damage due to power sector
New coal plants
According to the 2011 report “Thermal Power Plants on The Anvil : Implications And Need For Rationalisation”
by Prayas (Initiatives in Health, Energy, Learning and Parenthood) — a
non-governmental, non-profit organisation based in Pune — the India
Ministry has given environmental clearances to coal and gas-based power
plants whose capacity totals 192,913 MW, while another 508,907 MW are at
various stages in the environmental clearance cycle, for a total of
701,820 MW. Coal-based plants account for 84% of the projects. These
additions are more than six times the currently installed thermal
capacity of 113,000 MW.
Many of the projects in pipeline will be geographically concentrated
in a few areas: 30 districts (4.7% of the total 626 districts in India)
will have more than half of the proposed plants, with their capacity
adding up to about 380,000MW. Fifteen districts each have plants with
capacities totaling 10,000 MW or more. Districts Janjgir-Champa and
Raigarh in Chhatisgadh have the highest concentration of proposed plants
in the country, with 30,470 MW and 24,380 MW planned, followed by
Nellore in AP with 22,700 MW. The districts of Rewa (17,820 MW),
Singrauli (15,240 MW), Sonbhadra (7,638 MW), Sidhi (5,240 MW, not in the
top 30) and Allahabad (5,280 MW, not in top 30) are adjoining, and add
up to a proposed capacity of 51,218 MW.
The private sector accounts for 73% of all projects, with 10 private corporate groups planning to build about 160,000 MW.
Health costs of coal
The 2013 study “Coal Kills: An assessment of death and disease caused by India’s dirtiest energy source,”
conducted by the NGOs Conservation Action Trust (CAT), Urban Emissions,
and Greenpeace looked at emissions data of 111 coal-fired power plants
(generation capacity of 121GW) and found that in 2011-2012:
emissions from Indian coal plants resulted in 80,000 to 115,000
premature deaths and more than 20 million asthma cases from exposure to
total PM10 pollution; and
the monetary cost associated with the health impacts of coal exceed
Rs.16,000 to 23,000 crores (USD $3.3 to 4.6 billion) per year.
NASA calculates that sulfur dioxide emissions from power plants in India increased by more than 60 percent between 2005 and 2012, based on satellite data.
India and climate change mitigation
In August 2010, the Indian government announced it was sanctioning $6.4 billion to finance efforts to mitigate the impacts of climate change
on the environmentally sensitive and populous areas of the country. The
funds will be used to achieve the targets and goals mentioned in the
National Action Plan on Climate Change released by the Prime Minister’s
Council on Climate Change in 2008. The plan of action to mitigate the
impacts of climate change have been subdivided into eight broad
categories covering the most critical areas: energy efficiency, solar
energy, sustainable agriculture, water conservation, sustaining the
Himalayan ecosystem, and building a knowledge base for understanding
climate change and its impacts better.
India and renewable energy
In May of 2011 it was reported that India plans to invest $37 billion
to create 17,000 MW of renewable energy generation by 2017, the
Ministry for New & Renewable Energy said in a statement. The
projected investment would come primarily from the private sector.
The current operating renewable energy capacity in India is 20,000
MW, which accounts for 11% of the total power capacity in the country.
The major share of power as of 2011 comes from coal which accounts for
40% of the country’s energy usage.
The Indian government had quadrupled its renewable energy targets
earlier in 2011 as part of its national plan to reduce carbon intensity
which aimed at installing 74.4 GW of renewable energy capacity by 2022
and reduction in carbon emissions intensity by 20-25% of 2005 levels
over the next ten years.
In February 2012, India’s largest state-run lender to electricity
utilities, Power Finance Corporation, announced it will increase lending
to wind and solar plants from 1.2% to 4% of its total lending budget.
Chairman Satnam Singh cited the volatility of coal prices as a factor in
the decision. Praveen Kadle, managing director for Tata Capital Ltd.,
says escalating investment risk in coal plants has movitaved some
investors to take their money elsewhere.
Indian company buys stake in Australian coal port
In April 2011, Indian company Adani Enterprises, the country’s largest coal importer, agreed to buy Australia’s Abbot Point Coal Terminal for A$1.83bn ($1.98bn).
The purchase was among a number placed by Indian groups in Australia
and elsewhere as the country to secure energy resources to meet rising
demand for power to complete infrastructure projects in India.
Funding and Programs for Clean Energy and Climate Change
India Rejects Calls to Reduce Greenhouse Gas Emissions
In June 2009, Environment Minister Jairam Ramesh said that India will
reject any international treaty to reduce greenhouse gas emissions.
Ramesh said that the effort to cut global warming emissions should
instead be undertaken by industrialized countries. Ramesh said India has
pledged to contain per capita CO2 emissions below those of
developed nations, but said, “There is no way India is going to accept
any emission reduction target, period, between now and the Copenhagen
meeting and thereafter.”
India carbon tax
On July 1, 2010, India imposed a carbon tax
on coal producers, and expects to raise $535 million, the first step by
Asia’s third-largest energy consumer to charge companies for fossil
fuel pollution. Coal, used to fire more than half of India’s electricity
generation, will be taxed at 50 rupees a metric ton to help fund
clean-energy projects. Coal producers nationwide will be charged the tax
starting July 1, 2010, the Central Board of Excise and Customs said in a
notice on its website after the levy was proposed in the federal
government budget in February. The clean-energy levy will also apply to
imported coal, Finance Minister Pranab Mukherjee said in his budget
speech. Coal emits more carbon dioxide per unit of energy than other
fossil fuels, according to the U.S. Energy Information Administration.
It was announced in November 2011 that Coal India was in talks with Peabody Energy and Massey Energy
about acquiring two of the companies’ mines. Coal India has budgeted
$1.2 billion to buy assets in the U.S., Indonesia and Australia during
the year ending March 2011 as it battles a widening gap between domestic
coal supply and demand.
In early January 2011, MMTC, India’s largest state-run trading
company, announced that India was going to increase its coal imports
from South Africa. Indian demand for South Africa’s coal contributed to
Asia overtaking Europe in 2009 as the largest shipping destination for
the fuel used in power plants.
NTPC, India’s largest state-owned energy provider, is “exploring”
bilateral pacts with African nations to increase coal imports.
Mozambique currently has such an arrangement with India. The first shipment of 37,600 metric tons of coal was made January 18, 2012 by Vale, a private Brazilian based company.
Peabody Energy Corporation reports that it will “rely on” demand for
coal in India, among others, as demand in the United States decreases.
In January 2012, Russia’s Energy Minister Sergey Shmatko said the country will double its coal exports to Asia by 2030.
BP’s Energy Report details new projections that India will burn more
coal than China by 2030. The report notes a plateau in Chinese coal
demand following a stabilizing industrial system that will push India
into the top spot.
In July 2012 it was reported that India will need to import 185
million tons of coal annually by 2017 to the country’s growing
shortfalls. A draft paper by the government’s commission on energy
warned of “an urgent need to take effective measures to step up coal
a Tata group company, is looking for a strategic stake in Indonesian
and South African coal mines for supply of 6-8 million tons of coal to
fuel its 2x800MW thermal power project, the Mundra Ultra Mega Power Project. The company targets to acquire a stake that will assure 8-9 million tons of coal supply. Tata Power is also seeking out coal from East Kalimantan and Mozambique.
Coal India (CIL) plans to forge new deals with a mix of domestic and foreign companies. The latter includes BHP Billiton, Rio Tinto, and Vale of Brazil, as well as Vedanta Resources,
a London-based metals producer that has embarked on a US$10 billion
expansion of Indian coal mining to also increase its output of zinc, lead, and silver, and to power its expanding Jharsuguda aluminum
smelter in Orissa. The Coal Ministry in early 2010 announced it was
“encouraging” CIL to acquire or develop coal mining operations in
Mozambique, Australia, Indonesia, South Africa and the US. The state
company is also negotiating with Peabody Energy for stakes in four Australian mines, aimed at producing12 mt per annum by 2012.
On August 2, 2010, news reports said India’s Adani Group will buy a coal tenement in Queensland’s Galilee Basis from Australia’s Linc Energy.
The deal could be worth more than 1 billion Australian dollars (900
million US), and would be the first time an Indian company has bought a
coal seam rather than invested in a coal mining company. Adani is
India’s largest coal importer and a key player in India’s plans to
double power generation over the coming decade: there are 28 coal-fired
plants under construction and another 28 on the drawing board. The value
of shares in Linc has risen nearly 60 per cent since the start of July
in anticipation of the sale of three Queensland coal assets. Linc’s
primary business is coal seam gas.
In 2011, coal imports rose an estimated 7.6% from 2010 to 118.4
million metric tons. This fell short of previously projected imports due
to economic factors. 
It was announced in March 2012 that India’s Coal Ministry was looking
to remove a duty on coal imports to the country, potentially making it
easier to import coal into India.
In July 2012 Coal India
reported that they planned to import up to 30 million metric tons of
coal in 2012 in order to meet rising domestic demand and mitigate power
India is dependent on a number of coal terminals to bring these imports into the country. (See map at bottom of page.)
India coal ports
Annual Capacity (MM Tonnes)
Gangavaram Port Ltd.
Haji Bunder Port (MBFL)
Mumbai Port Trust
Nhava Sheva Port
Jawaharlal Nehru Port Trust
New Mangalore Port
Panjim (Panaji) Port
Port of Chennai
India has almost negligible coal exports, estimated to be at only 1.5 million tonnes in 2005.
Note: 1 metric ton (tonne) = 1.10231 short tons
Imports of Coal by India and year (million short tons)*
(*Estimates are from the U.S. Energy Information Administration’s International Energy Statistics.)
In 2009, India imported 67 mega tons (Mt) of coal, according to estimates by the World Coal Institute. According to the U.S. EIA, in 2009 India mined 613.4 million, imported 77 million, and used 680.9 million short tons of coal.
Indian coal imports are rising rapidly. According to India Coal
Market Watch, from April 2008 through March 2009, the country imported
59 million metric tons (tonnes); from April 2009 through March 2010
imports rose 24 percent to 73.25 million tonnes. India’s coal imports rose by 14 percent from 2009, to 86.28 million metric tons in 2010.
In 2010, Chairman of Coal India
Partha Bhattacharyya projected that India may import close to 100
million metric tons of coal in the year 2010 – ending March 31, 2011 –
to meet growing demand, as India generates 70% or more of its
electricity by burning coal.
In February 2011, Coal Minister Sriprakash Jaiswal projected that
2010/2011 imports would jump 70 percent to 142 million tonnes.
In September 2011 it was announced that the country could import
approximately 114 million tonnes of coal in 2011/12, up by over a third
from the 2010. Imports will come primarily from Indonesia and South
Africa. It was also reported that coal imports were up about 70 percent in the first six months of the year ending March 2011; between April-October 2011, coal imports rose 51% compared to the same period during the previous year.
The shortage of coal, rising coal prices, and the effect on proposed plants
Forty-two gigawatts of planned capacity has been mothballed as of
Jan. 2012, due to coal supply bottlenecks and price curbs. Utilities won
rights to build plants by bidding prices at which they would sell
electricity. The utilities that have put additional coal capacity on
hold had bid to sell electricity at an average of 2.5 rupees (5 cents) a
kilowatt-hour, while current fuel prices put the cost of producing
power at about 3 rupees a kilowatt-hour, slowing the growth of coal
The coal crisis has made financiers such as Infrastructure
Development Finance Company (IDFC) wary of coal projects. In December
2011, IDFC managing director and CEO Rajiv Lall told The Times of India that IDFC was halting its financing of new coal-fired power plants. In an interview, Lall said,
“The biggest problem is in the power sector due to (un) availability
of fuel, notably coal, and due to continuing challenges of the state
electricity boards (SEBs). Coal India never really believed that we can
add 50,000 mw capacity addition in the plan period. It was unprepared to
meet the extra demand. It is also true that they have had challenges in
terms of developing new mining assets because of the environment
debate. Thousands of crores ave been invested in generating plants that
are about to come on stream and will not have enough coal to allow them
to function at their optimal capacity. This has all kinds of potential
knock-on effect. As cash generation will decline, debt servicing
capacity shrinks, banks will have to either restructure loans or they
will have less capital to fund growth. As banks become nervous on
funding such projects, they are not financing to build more capacities.
Problems in land acquisition and environment have led to most
entrepreneurs losing risk appetite. Public sector banks are not lending
to SEBs. The structural problems can’t be brushed under the carpet and
tariffs have to be raised, which some states have done. We don’t have
any exposure to SEBs. We have ring-fenced our exposure to coal-fire
projects very well. But if SEBs start defaulting, then we can’t help it.
We are basically not lending to new coal-fired projects… We will not
get back to thermal until a couple of these issues are solved.”
Environment Minister approves sixteen coal projects
On February 11, 2011 India’s Environment Minister Jairam Ramesh
approved a total of sixteen new coal projects that were on hold due to
environmental regulations. Coal Minister Sriprakash Jaiswal stated that
the environment minister’s okay of Coal India’s
proposed coal mine projects was due to pressure from higher levels in
the Indian government. The Coal Minister also stated that environmental
regulations are one of the reasons why the growth of Coal India – which
produces 80 percent of the country’s coal – dropped to 2 percent in
2010, compared to 2009’s figure of almost 7 percent. However, the Coal
Minister said the areas off limits to coal mining would remain off
limits, despite the likely increase in the country’s coal use.
DB Power’s proposed Dharamjaigarh coal mine and plant
is a subsidiary of DB Corp Ltd, a media conglomerate in India. DB Power
is seeking the acquisition of 693.32 hectares of land for a coal mine, a
project in Dharamjaigarh that would displace an estimated 524 families
from six settlements to extract 2 million tonnes of coal annually. The
coal would be used to fuel a 1320 MW thermal power plant that would be
built in the adjoining district of Janjgir. After public protest against
the proposed mine, DB Power submitted an affidavit pledging not to
conduct any mining operations in nagar panchayat land. A supplementary
letter filed at a Feb. 2011 public hearing promised to re-site any
proposed water tanks and coal piles from nagar panchayat land to the
remaining leased area. Four villages, however, would still lose their
Andhra Pradesh, India
As of 2011, the installed capacity in the state of Andhra Pradesh is
15,800 MW. According to a survey by the Central Electricity Authority,
the peak electrical demand in the state is expected to reach 28,215 MW
by 2021. According to Grist, there are 117 proposed power plants in the
state, geared to generate an additional 77,800 MW; of this, 55,925 MW
will be coal-based.
According to the Guardian, seven major and more than 30 smaller
coal-powered power stations are planned, together intended to have a
capacity of 56GW.
There has been community resistance against coal plants in Andhra Pradesh, particularly in the Srikakulam District, where six coal plants are proposed including the Nagarjuna Construction Company Sompeta Thermal Plant,
and the Krishnapatnam port, where 24 plants are proposed. Police are
reported to be unleashing violence and intimidation to suppress
villagers as they struggle to protect their livelihood and habitats.
The Nagarjuna Construction Company Sompeta Thermal Plant
is a 2640 MW coal-fired power plant proposed for Sompeta in Andhra
Pradesh, India. In the wake of highly publicized protests and the
killings of local residents by police, the project’s environmental
clearance was revoked by the ministry of environment and forests in
The Bhavanapadu Thermal Power Project is a 2,640 megawatt (MW) coal-fired power station proposed by East Coast Energy to be constructed in Andhra Pradesh, India.
Estimated number of new plants approved
According to the Sierra Club, India approved 173 coal fired power plants in 2010.
According to Economic and Political Weekly, if you count only
projects that have a capacity of 500 MW or above, data from the Ministry
of Environment and Forests (MoEF) indicates that since 2006,
environmental clearance has been given to nearly 200 thermal coal
projects for generating close to 220,000 MW of power: “To put this
number in perspective, the total existing electricity generation
capacity in the country – from thermal, nuclear, hydro, and other
sources – was just over 176,990 MW at the end of June 2011 (CEA 2011).
The thermal generation capacity expansion underway works out to 1.3
times the total generation capacity in the country.” The top six
coal-mining states – Jharkhand, Orissa, Chhattisgarh, West Bengal,
Madhya Pradesh (MP), and Andhra Pradesh (AP) – account for close to half
of the capacity addition. Tamil Nadu, Maharashtra and Gujarat account
for a third. The remaining is spread across Uttar Pradesh (UP), Bihar,
Haryana, Rajasthan, Karnataka, Punjab, Delhi and Tripura.
According to an August 2011 report
by Prayas Energy — a non-governmental, non-profit organisation based
in Pune — the India Ministry has so far given environmental clearances
to coal and gas-based power plants whose capacity totals 192,913 MW,
while another 508,907 MW are at various stages in the environmental
clearance cycle, for a total of 701,820 MW. Coal-based plants account
for 84% of the projects. These additions are more than six times the
currently installed thermal capacity of 113,000 MW.
During a major power blackout in India in late July 2012, two hundred
workers became stranded in three coal mines in West Bengal when a
blackout affecting half the country cut off electricity to elevators in
their underground pits, a mining company official said.
Proposed coal projects
Proposed coal-to-liquids projects
In March 2009 the Indian government announced that it had awarded two
coal blocks for the development of two different coal-to-liquids
projects in the state of Orissa. These are:
the north Arkhapal coal block to Strategic Energy Technology Systems Ltd, a 50:50 joint venture between Tata Power and Sasol Synfuels International, the international synfuels subsidiary of Sasol. It is projected that the $10 billion. plant would produce 80,000 barrels of crude oil a day.
In early 2010 Orissa’s Chief minister Naveen Patnaik told reporters
that “though we have not identified the location, the proposed plant
will be somewhere in the state.” It was also reported that the coal
would come from the Srirampur area in Talcher. The Business Standard
also stated that the project “requires 3,000 acre of land for its main
plant, additional land would be required for setting up coal mines,
benefication plants, coal handling plants, water reservoirs, power
plants and a township” and would involved the establishment of a 1600
megawatt power station. The newspaper also reported that the joint
venture was “yet to make a formal application” for the plant the company
was pressing the state government “to provide adequate facilities for
early commissioning of the project.” (See Srirampur Coal-to-Liquids Project for more details).
the Ramchandi block to Jindal Steel and Power
Limited (JSPL) is projected to produce 80,000 barrels per day will use
the German Lurgi technology. The plant is proposed to be established at
Kishore Nagar in Angul district of Orissa. Waste coal from the washery
is proposed to be used as fuel for a 1,350MW power station.  (See Kishore Nagar Coal-to-Liquids Project for more details).
Coalbed methane in India
On January 4, 2011, Great Eastern Energy
said it had signed an agreement with the Tamil Nadu government for the
development of gas reserves lying below coal seams in the Mannargudi
block in the state. Great Eastern was awarded the Mannargudi block
located near Tiruchirapalli in June 2010 in the fourth round of bidding
for Coal Bed Methane (CBM) blocks. Great Eastern is the first company to
commercially produce CBM in India. Great Eastern is currently producing
CBM from its block in Raniganj, West Bengal, and is already supplying
CBM to various industrial customers in and around Asansol/Durgapur, West
Bengal as well as syngas to vehicles through India Oil petrol pumps and, potentially, Bharat Petroleum
outlets as well. The Mannargudi block is spread over an area of 691 sq
km and the CBM resource is estimated at 0.98 trillion cubic feet.
The Union Ministry of Coal released information stating that 342
people died in accidents in mines operated by public sector undertakings
(PSUs) over the past four years. “Experts say that non-compliance with
safety regulations have led to these deaths.” The companies with the
most accidental deaths are the South Eastern Coalfields Limited (SECL)
with 67 deaths, Singareni Collieries Company Limited (SCCL)with 54
deaths, and Western Coal Limited (WCL) with 51 deaths. The government
ascribes most of the accidents to roof collapse, inundation, explosion
of fire damp, coal dust explosion, premature collapse of workings,
ignition of fire damp, water gas explosion and fire/suffocation by
gases. “All these companies are subsidiary companies of Coal India
limited (CIL).” Souparno Banerjee of Centre for Science and Environment
(CSE) argues that “safety practices in most mines are inadequate”…
“Even the health aspect of miners is being neglected which causes
casualties in the long term,” he said.
However, not all mining deaths are reported. In the state of Meghalaya,
some state laws overrule national ones. Some state laws were enacted to
protect small coal industries, but “many mines are owned by state and
national lawmakers or their relatives”. “[D]eaths in Meghalaya aren’t
recorded or investigated, with most hushed up to avoid mines being
Another major coal mining operation is Singareni Collieries Co. Ltd., India’s oldest coal miner, and the second largest Indian coal miner after Coal India.
SCCL operates 13 opencast and 42 underground mines in the Godavari
River Valley, in southern India (Andhra Pradesh), producing 52-million
tons a year of coal, as of 2011.
SCCL is 50% owned by the Andhra Pradesh State government and 50% by the
Indian government. In 2006, it had an annual capacity of 18 million
An estimated 70,000 children work in the coal mines in the Jaintia
Hills in northeast India, according to Impulse, a children’s rights
organization working to end the practice. The youngest of the miners are
just 7 years old. An article in The Christian Science Monitor
reported that many work for a few dollars a day – $5 per cartload of
coal – in narrow, unreinforced seams in 5,000 small mines. Most are
Nepalese, who are allowed to apply to work there, but many are
Bangladeshis, who are there illegally. Others are Indian. Some have been
sold by their families as indentured laborers, according to Impulse.
The number of children working in the state’s 5,000 coal mines is a
matter of dispute, with Impulse estimating tens of thousands and local
politicians putting it in the hundreds. In May 2011, the LA Times
reported that most of the children miners work in Meghalaya, where the
government “with only seven labor inspectors and no vehicle, all but
ignores child labor and safety problems, keen to goose the economy” and
that the government “acknowledged that 222 children worked in 20
villages mining and hauling coal and doing related jobs, but it has done
nothing to rescue them.”
Major Indian Coal Companies
The World Coal Institute states that “almost all of India’s 565 [coal] mines are operated by Coal India
and its subsidiaries, which account for about 86% of the country’s coal
production. Current policy allows private mines only if they are
‘captive’ operations, i.e. they feed a power plant or factory. Most of
the coal production in India comes from opencast mining, contributing
over 83% of the total production. Coal India employs some 460,000 people
and is one of the largest five companies in India.”
The USGS estimates coal production from major wholly Coal India owned subsidiaries as being:
Bharat Coking Coal Limited;
Bihar Coking Coal Ltd which operates in Bihar and West Bengal and has an annual capacity of 26 million tonnes;
Central Coalfields Ltd which operates in Bihar and has an annual capacity of 27 million tonnes;
Eastern Coalfields Ltd which operates in Bihar and West Bengal and has an annual capacity of 21 million tonnes;
Mahanadi Coalfields Ltd which operates in Orissa and has an annual capacity of 21 million tonnes;
North-Eastern Coalfields Ltd which operates in Assam and has an annual capacity of 640 million tonnes;
Northern Coalfields Ltd which operates in Indian Madhya Pradesh and Uttar Pradesh and has an annual capacity of 24 million tonnes;
South Eastern Coalfields Ltd. which operates in Madhya Pradesh and has an annual capacity of 36 million tonnes;
Western Coalfields Ltd. which operates in Madhya Pradesh and Maharashtra and has an annual capacity of 18 million tonnes;
Neyveli Lignite Corporation which operates in Tamil Nadu and has an annual capacity of 17 million tonnes of lignite.
In March 2012, it was reported that India’s government lost hundreds
of billions of dollars by selling coalfields to companies without
competitive bidding, according to a leaked audit report that the auditor
itself called misleading. Opposition party leaders demanded an
explanation from Prime Minister Manmohan Singh of why about 155
coalfields were sold to select private and state-run companies without
competitive bidding, resulting in an estimated loss of nearly $210
A report issued by India think tank Energy and Resources Institute
(TERI) in December 2009 estimated that the country has approximately 45
years’ worth of usable coal reserves. Previous estimates from geological
studies had suggested that India had about 267 billion tonnes of coal,
including approximately 105 billion tonnes of proven reserves, which
could last for up to 200 years. The TERI report said the revised
estimate showed the importance of developing policy initiatives for renewable energy, including aggressive promotion of solar energy
technologies. Rajendra Pachauri, TERI’s director-general, said, “It’s a
myth that India has a virtually unlimited supply of coal. Much of our
coal is so deep that it cannot be mined.” According to the report, India
will have to increase its coal imports to about 1,300 million tonnes
per year by 2030, unless initiatives are launched to lessen the
country’s dependence on coal – if renewable energy initiatives are
launched effectively, coal imports could be restricted to 200 million
tonnes per year.
In August 2010, the EIA projected that India has coal reserves of 62,300 million short tons.
In May 2011, the coal ministry said it plans to redefine the
boundaries of 28 coal blocks in the country, to “help in improving
availability of the essential fuel by 34 per cent.” Out of a total 602
coal blocks in nine coalfields in the country, the environment ministry
said the available areas for mining in the country would increase by up
to 64 per cent from 59 per cent, according to estimates of the coal
On June 24, 2011, India Environment Minister Jairam Ramesh approved
coal blocks in Chhattisgarh, after overruling the Forest Advisory
Committee. Out of three blocks – Parsa East, Kante Basan and Tara in the
Hasdeo-Arand forest region – the first two are allotted for Rajasthan
and third is for Chhattisgarh.
Domestic Coal Mining
Between 1996 and 2005 Indian hard coal production increased from 285
million tonnes to 397.7 million tonnes in 2005. In addition, 37.1
million tonnes were estimated to have been imported in 2005 with a total
coal consumption of 433.4 million tonnes. The World Coal Institute
estimates that coal demand could grow to 758 million tonnes in 2030.
In 2011 it was reported that India was the third largest miner in the
world and will produce around 554 million tonnes of coal, but will burn
Government sources said the production target for Coal India (CIL) is
likely to be set at 464 million tonnes (MT) for 2012-13. CIL has
decreased its current production target to 440 MT from 452 MT, and has
also decreased its production target for the 2011-12 to 448 MT. CIL has
emphasized delays in the grant of forestry and environmental clearances
for decreased output. Other problems include coal shortages and high fuel prices.
In January 2012 the chairman of CIL, Nirmal Chandra Jha, is quoted as
saying delays in rail construction has been a major factor in lower than
expected coal output. He stated, “For over a couple of years, our
production has not grown, but our inventory at rail sidings all across
kept piling up.” One rail project connecting the Vasundhara and
Mand-Raigarh rails had a completion date of March 2012 (end of 11th Five
Year Plan) but is currently not close to completion, with one connector
track not yet started.
It was reported in July 2012 that the ministry of environment and
forest gave conditional approval to 15 mines operated by PSU coal miner
Financing of India’s coal plants
Financing of India’s coal rush is an under-studied topic. The Power Finance Corporation is the lead government-owned entity, and it is the “nodal agency” for the program of Ultra Mega Power Projects. International public investment institutions such as the World Bank
have also played a significant role in financing India’s coal plants,
and that role has been highly controversial due to the application of
funds from the Clean Development Mechanism for new coal plants. Private equity has been a smaller factor but is growing rapidly.
Barh power station
Bhilai Works power station
Ib Valley power station
Kahalgaon power station
Krishnapatnam Ultra Mega Power Project
Krishnapatnam power station
Mumbai Jindal power station
Mundra Ultra Mega Power Project
Pathadi power station
Simhadri power station
Sipat power station
Sasan Ultra Mega Power Project 6
Girye Ultra Mega Power Project
not yet determined
Ghogarpalli Ultra Mega Power Project
Power Finance Corporation
Sakhigopal Ultra Mega Power Project
Power Finance Corporation
Sundargarh Ultra Mega Power Project (Lankahuda)
Cheyyur Ultra Mega Power Project
Coastal Tamil Nadu Power
Marakkanam Super Thermal Power Project
Tata Mundra Ultra Mega Power Project 1
Tata Mundra Ultra Mega Power Project 2-3
Tata Mundra Ultra Mega Power Project 4-5
Tilaiya Ultra Mega Power Project 1-5
Tilaiya Ultra Mega Power Project 6
Sasan Ultra Mega Power Project 1-2
Sasan Ultra Mega Power Project 3
Sasan Ultra Mega Power Project 4-5
Annual CO2 (tons)
Krishnapatnam Ultra Mega Power Project 1-2
Krishnapatnam Ultra Mega Power Project 3-6
Pudimadaka Ultra Mega Power Project
Vadarevu Ultra Mega Power Project Stages II-III
Andhra Pradesh Power Generation Corporation (APGENCO)
Varadevu Ultra Mega Power Project Stage I
Andhra Pradesh Power Generation Corporation (APGENCO)
Akaltara Ultra Mega Power Project
Surguja Ultra Mega Power Project
Ultra Mega Power Projects
For more details, see Ultra Mega Power Projects in India.
India has proposed a series of ‘ultra mega’ coal-fired power stations of 4,000 megawatts or more.
The program of Ultra Mega Power Projects (UMPP) was introduced in 2005 by the Ministry of Power in association with the Central Electricity Authority and the Power Finance Corporation
to overcome bureaucratic obstacles hindering the development of large
thermal plants and thereby address India’s chronic power deficits.
“The government’s capacity addition programme has been grossly
inadequate in the past. In the 9th and 10th Plans, less than 50% of the
targeted capacity was added. In the on-going 11th Plan, while the Centre
had originally planned to add 768,577 MW [sic – one digit too many] of
capacity, the power ministry has now scaled down the target to 62,000
MW,” wrote Amiti Sen & Subhash Narayan in the Economic Times.
The Ministry of Power stated that the projects would be ‘super
critical’ coal plants which would either be located at the pithead of
specific coal deposits or at coastal projects to be based on imported
In an attempt to make the projects attractive for private sector
investors, the Ministry of Power, the Central Electricity Authority and
the Power Finance Corporation determined that it “was deemed necessary
to provide the site, fuel linkage in captive mining blocks, water and
obtain environment and forests clearance, substantial progress on land
acquisition leading to possession of land, through a Shell Company.” The
shell companies were also given the initial task for finalizing
agreements with power purchasers.
The Ministry stated that the Central Electricity Authority (CEA) had
selected the sites in consultation with state governments with the
coastal sites being the Mundra, Krishnapatnam, Tadri, Girye, and Cheyyur
projects. The mine pithead sites are the Sasan, Tilaiya, Sundergarh and
Table 2: Summary statistics for proposed coal plants in India
# of Plants
Annual Tons of CO2
Newly commissioned (since 1/1/2010)
For a complete table of over 400 proposed coal plants in India, sortable by state, project name, sponsor, size, status, and CO2 emissions, see Proposed coal plants in India.
2012: The plant boom shows signs of slowing, but hundreds of projects remain in the pipeline
In August 2011, a study by Prayas Energy Group found approximately
590,000 megawatts (MW) of coal projects in the pipeline, having received
or expecting imminent environmental approval.
However, since the release of the Prayas study there has been a major
slowdown among planners of new coal capacity. As shown in Table 2,
41,650 MW of projects were deferred (i.e. progress was on hold) as of
May 31, 2012, and an additional 22,420 MW of projects had been
cancelled. The reasons for the slowdown were multiple: (1) Dramatic
rises in the cost of imported coal; (2) Insufficiency in domestic coal
output; (3) An unfolding domestic crisis over the integrity of the coal
allocation process, known as “Coalgate,” (4) Difficulties obtaining
financing. Nevertheless, 87,122 MW or projects were under construction
as of May 31, 2012 and an additional 68,200 MW of projects were in
advanced development, having achieved most milestones (permits, water,
land, coal, and financing).
2007-2012: The Rush to Build Coal Plants
For more details, see Proposed coal plants in India and Existing coal plants in India
2007-2011: The rush begins
As shown in Table 1 below, India’s coal plant capacity was relatively
stagnant through the end of the 10th Plan on March 31, 2007. Since
then, growth has been rapid, including a 79% increase in capacity from
March 31, 2007 through May 31, 2012 (mostly since the beginning of 2010)
and an additional 76% increase represented by projects currently under
Table 1: Coal plant capacity additions since 1985, and current capacity under construction
(5 years, 2 months)
Under construction 5/31/12
Ramagundam Thermal Power Station, Andhra Pradesh
Coal is the main commercial energy fuel in India, amounting to 55% of installed electrical capacity in 2011Ambitious
plans by the Indian government to extend the electrification rate from
its 2005 level of approximately 44% to the whole population, as well as
catering for rapid growth in industrial and household consumption, are
driving plans for a massive expansion of installed electricity capacity.
India has “proved” coal reserves estimated by the Ministry of Coal at
93 billion tonnes and are estimated to be sufficient for 30 to 60
years; however Indian coal is of low quality as it has a high ash
content. In August 2010, the EIA projected that India has coal reserves of 62,300 million short tons.
Peak (thermal) coal ?
December 10th, 2012
Most of the news on CO2 emissions has been bad. In particular,
there are plenty of stories suggesting that coal-fired electricity is
booming, and that this can be expected to continue. Although the
evidence is mixed, I’m coming to the opposite conclusion. It’s already
clear that no new coal-fired power stations will be constructed in the
US for some time to come, and that many old ones will close, thanks to
cheap gas and EPA regulations. And, while there are some new stations
coming on-line in the EU, closures will predominate there too, although
they still need to work out what to do with Poland.
But the big news is from China. Not that long ago, the standard story was that China was turning on two new coal-fired power stations every week. Now as this AFR report (paywalled, but another version here) says, China is cutting back hard on coal expansion.
I found this story from March, in which the China Electricity Council
says that it expects coal consumption in 2015 to be below the 2011
level, implying that the peak is very near. India is also planning some
big expansions, but if China can grow without coal, so can they.
All of this suggests that the peak in global use of thermal coal
could be much closer than is generally thought. Demand for metallurgical
coal, used to produce steel, seems much more robust at least as long as
investment-driven growth continues apace in China and India. Looking at
the other fossil fuels, we reached plateau oil
at least five years ago. On the other hand, gas (less carbon-intensive
than the others, but still a source of CO2) is booming. So, there’s
still a lot of work to be done before we can end the growth in
emissions, let alone start on the 80 per cent reductions we need.
Source: National Grid, ‘Going Green’ scenario in the
Future Energy Scenarios 2014
Coal and the UK’s climate legislation are basically
incompatible, barring large-scale carbon capture and storage. The
UK has a legally binding commitment to
reduce emissions by 80 per cent by 2050. As the power sector
currently accounts for
about 30 per cent of the country’s emissions, a lot of the cuts
will have to be made by switching to cleaner sources, like nuclear
or renewables. EU legislation also requires the UK to
ramp up renewables and
old coal power plants.
But as the data we’ve just discussed suggests, without
international efforts to decarbonise, it’s likely the coal that the
UK or Europe would have used will still get burned somewhere.
Coal’s global future ultimately depends on whether policymakers
implement stringent climate policy.
In summary, a range of projections suggest coal is
not dead and is probably not going to die any time soon. For now,
assessments of the coal industry’s health rather depend on which
part of the world is under the microscope.
the climate brief
Licensed under a creative
Published by Climate Brief Ltd – Company No. 07222041
Eurostats, Inland energy consumption by fuel: solid fuels, by
1,000 tonnes of oil equivalent
In the long term, the downward trend in coal use is likely to
resume. Policies such as the
large combustion plant directive and
industrial emissions directive which limit air pollution are
expected to force many coal plants to reduce the amount they
operate, and eventually shut.
Officials hope the EU’s
energy efficiency policies and renewable
energy goals will also see the region use less energy and
switch to less polluting power sources.
UK: A coal minnow
The EU trends are expected to be reflected in the UK.
report from the network operator National Grid looks at four
ways the government could decarbonise the UK’s energy sector.
Unsurprisingly, coal has a limited role in each of them.
The scenarions show coal’s share of the UK’s power generation
falling to between one and nine per cent by 2035, down from around
40 per cent today.
Gas could be expected to take over as the primary fossil fuel
used to generate electricity, with perhaps as much as 47 per cent
of our electricity coming from gas in 2035, National Grid
Credit: Doc Searle
Coal is primarily used for power generation. Despite the
country’s well publicised shale gas boom, coal remains the main
fuel used for electricity generation, generating
about 40 per cent of the US’s power in 2013, with gas producing
about 29 per cent, according to the Energy Information
Administration (EIA), the energy statistics department of the US
doesn’t expect this to change much in the next two decades. It
projects coal providing about 40 per cent of the US’s power in
2035, despite the
President’s much lauded plans to curb coal power
Similarly, the US is likely to keep producing a lot of coal. The
EIA expects coal production to increase gradually to 2035, with
most of the fuel exported.
US Energy Information Administration. Graph by Carbon
EU: Long term squeeze
It’s a very different picture on the other side of the Atlantic,
where the EU’s long term commitment to
addressing climate change should see coal increasingly squeezed
out of the energy mix.
The European Commission expects energy
consumption from coal to halve by 2050, from 16 per cent to 8
per cent. As renewables increase their
share of electricity generation, much less coal is expected to
be used to fuel the region’s power stations. The commission
projects coal generation will account for 12 per cent of the EU’s
electricity in 2030, and 7 per cent in 2050 – down from 24 per cent
Although the EU’s coal consumption has dropped significantly
over the last two decades, there has been a slight uptick in recent
years, as the graph below shows. That’s partly down to countries
using cheap coal imports for power generation instead of
less-polluting gas, in part as a consequence of the US shale
The Indian coal sector: Challenges and future outlook
That means India is likely to become increasingly
depend on imports, and is set to become the world’s largest coal
importer by around 2020, according to the IEA.
Australia: Relying on exports
While some have argued that a solar power boom means the
coal industry is no longer economically viable, the country
remains the world’s second-largest coal exporter.
While domestic consumption is expected to reduce in coming
years, the Australian Bureau of Resources and Energy Economics
(BREE), an Australian government economic research unit, still
thinks coal has a future.
Electricity consumption from coal is expected to get squeezed in
the coming decades as renewable energy – particularly small scale
solar – starts to become more competitive, the BREE predicts.
Likewise, domestic energy consumption from coal is expected to tail
off (the dark blue bars on the chart below).
Source: Australian Bureau of Resources and Energy
Economics data. Graph by Carbon Brief.
In contrast, BREE expects coal production (the light blue bars
on the chart above) to increase up to 2035, before falling
BREE predicts that coal production will be at a higher level in
2050 than it was in 2013, with most of the coal likely to be
exported to Asia’s emerging economies, as China’s demand drops.
USA: Coal going strong despite shale gas
The US uses the most coal of any developed economy, according to
the IEA – with the country accounting for 45 per cent of the OECD’s
total coal consumption.
Energy Information Administration
Last September, the government prohibited the building of new
coal power plants in three populated areas around Beijing,
Shanghai, and Guangzhou
as part of the country’s national action plan. That should help
curb coal power generation. But the
World Resources Institute, an environmental thinktank, says
further national policies will be needed if the country is to make
significant steps to reduce power sector emissions.
expects China to continue to be a major industrial coal consumer.
Aside from the power sector, the iron, steel and cement industries
all rely on the fuel for heat and power. As such, coal is set to
continue as China’s main energy source all the way up to 2035, and
possibly beyond, according to the IEA. And China will continue to
ramp up coal production to meet demand, the IEA says.
India: Coal boom
India is currently the world’s third largest coal consumer, and
demand for the fuel is set to grow in coming decades.
PwC, a consultancy, projects India’s coal demand will grow by
about seven per cent each year for the next decade. The IEA expects
India to more than double its coal consumption by 2035.
Commercial, technical and legal difficulties – alongside a
series of major political
scandals – have held up the expansion of India’s mining
industry. That means that while India produces a lot of coal, it’s
unlikely to be able to increase production quickly enough to meet
rocketing demand – creating an ever-largening gap between
production and demand, as this chart shows:
The future of coal in China, India, Australia, the US, EU, and UK
16 Jul 2014, 13:00
Have reports of coal’s demise been greatly
exaggerated? It depends which part of the world you look
Global coal use has grown significantly over the last decade,
with global demand increasing 60 per cent between 1990 and 2011,
according to research body the International Energy Agency (IEA).
With some countries implementing climate policies to limit the use
of polluting fuels, some commentators are predicting
coal’s imminent demise.
BP Statistical Review of World Energy
That’s probably premature. While some European countries are
ramping up renewables, shutting coal plants and closing mines,
other parts of the world are planning an extraction frenzy to feed
emerging economies’ seemingly insatiable energy demand.
Here’s a quick guide to coal’s prospects around the world.
China: Coal is dominating the market
China is the world’s largest coal user, producer and importer.
Motivated by air quality concers, China is making some efforts to
reduce use of coal power, but the country still uses a huge amount
of coal –
4.2 billion tonnes in 2012, according to the Energy Information
That’s about four times as much as the whole of
Europe consumed the same year.
Congestion persists, but India’s improvements in coal import infrastructure center on smaller and deeper ports. Imports are up after the
Supreme Court ruled in August that India’s longstanding method of
allocating coal mining concessions was “illegal and arbitrary.” UMPP
(started in 2006) focuses specifically on coal imports because the more
efficient plants being deployed need higher quality coal to achieve full
load. Larger plants can obtain the economies of scale to compensate for
the higher costs associated with foreign coal. India’s domestic thermal
coal is currently around $10 or $20 cheaper per tonne than imports, so
a bifurcated approach using imported coal with high-efficiency global
technologies could establish a pathway for Indian coals. Many boilers in
India are jumbo-sized because of the elevated ash content of local
coal, and these units can blend higher quality imports with domestic
Coal Imports Will Continue to Boom
The IEA projects that India will be the world’s largest coal importer
by 2020. India’s large reserves (5th globally at 61 million tonnes)
should be tempered by a few factors:
India needs more capital intensive underground mining, which has
stagnated from an over-focus on cheaper opencast mining. Underground
mines account for 60% of CIL’s mines, but they only account for ~10% of
the company’s total production, versus 95% in China, 40% in the U.S.,
and 28% in Australia.
Technical and institutional problems have restricted the mechanized
longwall technology used to minimize underground mining losses. India’s
underground output requires a quantum jump from 0.50 to 2.7 tonnes per
The true size of India’s coal endowment isn’t known. Natural
resources in the country are often assessed geologically, not the more
appropriate techno-economically. Technical energy terms like “resources”
and “reserves” have been misused in Indian appraisals.
The quality of Indian coals is lower, especially high ash and low
calorific values. Indian coal does have low sulfur content, but this
leads to less boiler efficiency, meaning more coal input per output
India’s own met coal supply has been falling, and domestic reserves
constitute just 13% of the country’s total. Many are inaccessible
because they sit under communities or land reserved for farming.
The Incredible Scale of Latent Demand for Coal-Based Electricity in India
India’s Coal Generation Capacity Will Nearly Quadruple (2011-2035)
Source: IEA, WEO 2013; Mining Weekly
The Need for More Coal to Make Steel
Met (metallurgical) coal is used to produce coke which is critical in
steelmaking. Indian steelmakers used ~40 million tonnes of met coal
last year, and imports could more than triple to 110 million tonnes by
2025, while steel capacity also triples to 300 million tonnes. India’s
needs for more met coal and steel arise from a rapid urbanization
process that has population centers swelling by nearly 15 million people
annually. India is still just 32% urbanized, compared to 52% in China
and 82% in the U.S. Thus, India’s per capita steel use is still very low
at 57 kg/year, versus 310 kg in the U.S. and 480 kg in China. Steel and
Mines Minister Tomar wants to roll back the 2.5% customs duty on met
coal to help the domestic steel industry. Global overcapacity has met
coal markets at the bottom of the cycle, and the inevitable recovery is
emerging (see here and here).
Coal market watchers remember: 1) cities are built on electricity,
steel, and cement (coal is the basis of all three) and 2) global cities
are expanding by ~75 million people a year.
Importantly, India has watched neighbor China leverage coal power to
lift 650 million people out of poverty since 1990, and sail past the
global average for Human Development Index. Over that time, China’s per
capita coal electricity use rate increased to 3,200 kWh, up from just
420 kWh in 1990. Wanting the same, India’s coal demand structure has
evolved from 54% power generation in 1990 to 68% today, against 85% in
the EU and 93% in the U.S. Since 2000, India’s coal power has nearly
doubled to 800 TWh, while real GDP/capita doubled and Health Adjusted Life Expectancy increased 5 years to 58. India’s new modern coal plants are reducing SO2, NOx, and particulates and slash CO2 emissions by nearly 40%. And
despite staggering energy poverty, India has impressively lowered its
carbon intensity (on a PPP level) by ~17% since 2006 (when UMPP
started), on par with EU progress. Indeed, environmental groups MUST
realize that even under the IEA’s highly optimistic best-case policy
projection for renewables (450 Scenario), wind and solar together will
be just 8% of India’s electricity in 2020 and 17% in 2035. And even
then, 20 years from now, Indians at most are expected to consume just 20% of WHAT AMERICANS CONSUME TODAY.
Note: refrigerators are among the biggest consumers of electricity in
homes, generally using more than the average Indian uses in total.
Source: EIA; Reuters; The Sydney Morning Herald
The Need for Coal-Based Electricity
India is easily the most energy-deprived nation on Earth, with 1) 700 million lacking modern energy services,
2) 310 million lacking electricity, and 3) just a 700 kWh/capita/year
electricity use rate (80% below the global average). India’s long-term
demand for thermal coal stems from a massive coal-fired build out (Ultra
Mega Power Plants, UMPP) that will deploy larger (capacities > 4,000
MW) and much more efficient (> 43% vs. 29% for subcritical)
super/ultra-supercritical plants to reduce feed and emissions. Well more
than half of new coal-based capacity for the 12th Five Year Plan
(2012-2017) will deploy these advanced coal technologies. Cheaper, more
reliable baseload coal power will help alleviate widespread electricity
shortages that have been eroding the Indian economy by some $65 billion a
year! Power Minister Goyal has coal playing an “essential role” in his $250 billion plan to provide “Power for All” by 2019. Per the International Energy Agency (IEA), coal is expected to rise from 43% of total energy supply today to 46% in 2020 and 51% in 2035, while maintaining its ~68% hold on electricity.
…and I am Sid Harth
Thursday, December 18, 2014
e-action on Coal Blocks’ e-auction
Jude Clemente Jude Clemente Contributor
I cover energy, environment, security, & human development. full bio →
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Energy 11/09/2014 @ 7:48PM 3,681 views
India Will Be Using and Importing More Coal
State-owned Coal India Limited (CIL) is the world’s largest producer (465 million tonnes/year), but underperformance has the country moving toward imports and privatization. CIL’s output/employee/year has been around 1,200 tonnes, compared to over 10,000 tonnes in Australia. Capital expenditures for domestic assets this year were less than $800 million, in contrast to China’s Shenua Group, which spends a few billion dollars a year increasing coal production. It’s no wonder that India’s coal supplies and transportation systems are struggling to keep pace with surging demand, and more foreign coal are needed to fill the gap. Prime Minister Modi’s “Make in India” campaign will bring in foreign firms to build factories, expand economic growth, and elevate India’s living standards, still among the lowest of the emerging markets. India’s real GDP/capita is just $1,700, versus $4,560 for the rest of the developing world.
India’s Coal Imports Have Nearly Tripled Since 2008
I have serious problems in very vague language of this article. Today is Thursday. Stakeholders are supposed to reply, object or propose any, valid or invalid suggestion by Monday, December 22, 2014. Very short time for them to collect their wits, as certain undefined words may prolong this charade till eternity.
So I said, so sue me.
…and I am Sid Harth