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-ISSUES AND CHALLENGES
1
Gopal Prasad, Regional DirectorCMPDI, Asansol
1200 million people - Second-largest population
after China
Impressive annual GDP growth averaging 7.6%
from 2000 to 2007 and around 8 % since then
INDIA-SOCIO-ECONOMIC SCENARIO
from 2000 to 2007 and around 8 % since then
Among top five countries of the world in terms of
absolute GDP, based on purchasing power parity
(PPP)
2
BUT..
On per-capita income basis - well behind other
fast-growing nations
Human development index Very poor
Poverty still remains a major challenge.
INDIA-SOCIO-ECONOMIC SCENARIO(Contd.)
Poverty still remains a major challenge.
Per capita electricity consumption (779 KW) far
below the world average (2500 KW)
Nearly 60 crore Indians do not have access to
electricity
3
Must maintain Economic growth of 8 % to
10 % over the next 25 years to eradicate
poverty and meet human development goals
And to achieve sustained growth Growth
of Power Sector is paramount because:
WHAT NEEDS TO BE DONE
of Power Sector is paramount because:
Electricity a basic human need and
economic indicator
Electricity - Critical infrastructure on which
the socio-economic development of the
country depends
4
Access to Electricity To be made available
for all households
Availability of Power - Demand to be fully
met by 2012
NATIONAL ELECTRICITY POLICY OBJECTIVES
met by 2012
Per Capita Electricity Ensuring Per capita
availability of electricity over 1000 units by
2012.
5
One of the largest and most important industries in
India fulfilling the energy requirements of various
other industries.
One of the most critical components of infrastructure
affecting economic growth and the well-being of our
nation.
INDIAN POWER SECTOR
nation.
Significant progress after Independence 1362 MW
in 1947 to 190592 MW (Feb, 12) 140 fold increase in
65 years
Per capita consumption of electricity from 15 kWh in
1950 to about 779 kWh in 2009-10 about 52 times.
6
Thermal Power65.4 % of total installed capacityMain raw material used is coal around 84.5 % of thermal
power generated using coal and rest (14.5 %) by using Gas and Oil
Hydro Power20.4 % of total installed capacity Hydro power generation potential worth 1,50,000 MW Only
25 % harnessed till date
share of generating capacity declined from 34 per cent at the
end of the Sixth Plan to 20.5 per cent at the end of the eleventh
PRIMARY SOURCES OF POWER
end of the Sixth Plan to 20.5 per cent at the end of the eleventh
Plan.
Nuclear Power2.5 % of total installed capacity Heat sourced from nuclear reactors is used
Renewable Energy Sources11.7 % Renewable sources like sun, wind, biomass
Great potential to contribute to our energy security and
reducing green-house gas emissions
Among top 5 largest wind power generators in the world. 7
PRESENT INSTALLED CAPACITY
All
India
Thermal Power Nuclear Hydro RES Total
Coal Gas Oil Total
MW 105437.4 18093.9 1199.8 124731 4780 38848.4 22233.2 190592.6
% 55.3 9.5 0.6 65.4 2.5 20.4 11.7 100
POWER GENERATIONPOWER GENERATION
798949.5 Million Units up to Feb-12 against
the target of 855000 Million Units for 2011-12
Energy deficit of 11.1 % and peak demand
deficit of 12.1 % during February-2012.
8
Year Projected
population
(million)
Projected demand of Electricity Target for
2011-12Total
Electricity
(Billion KWh)
Peak
Demand
(GW)
Capacity
(GW)
2011-12 1200 1167 168 233 Capacity192
PROJECTION OF COUNTRYS ELECTRICITY
DEMAND - IEP REPORT
2011-12 1200 1167 168 233 Capacity192
Giga Watts
Generation
880 Bl. Units
2016-17 1275 1687 250 337
2021-22 1347 2438 372 488
2026-27 1411 3423 522 685
2031-32 1468 4806 733 960
Power generation to grow at an average rate of not
less than 6 % in years to come
9
COAL TO REMAIN AS MAINSTAY
Indian power sector heavily dependent on coal for
meeting its power generation targets
Consumes about 66 % of the coal Consumption (Year-
2010)
Power Steel Cement Others Total
Million 372 41 26 127 566Million
Tonnes
372 41 26 127 566
% 65.8 7.2 4.6 22.4 100
Above trend to continue in future It is estimated
that Coal would account for 56 % of installed capacity
in 2030
10
POWER COAL DEMAND-SUPPLY GAP
Most of the recent incremental generation
capacity additions - coal based
Future Scenario - to remain unchanged
IX Plan
(Actual)
X Plan
(Actual)
XI Plan
(Likely)
XII Plan
(Potential)
Incremental capacity
addition (MW)
19119 20950 52000 80000
Coal Based (MW) 7930 8575 35000 62700
11
Period Coal
consumption
Total Coal receipt by TPPs
including import (MT)
Import of coal
by Power
Trend over the years - gap between demand of coal
and its indigenous availability is increasing resulting
into increased volume of coal import
POWER COAL DEMAND-SUPPLY GAPContd.
consumption
By TPPs (MT)
including import (MT) by Power
Sector (MT)
2006-07 300.561 301.417 7.780
2007-08 322.437 321.433 8.067
2008-09 346.543 349.754 14.190
2009-10 360.845 367.652 23.230
2010-11 377.875 380.336 30.302
2011-12 (up to
Dec-12)
292.652 292.370 33.251
12
Projected Demand Supply Gap : As high as 943
POWER COAL DEMAND-SUPPLY GAPContd.
Gap between demand and supply of thermalcoal is showing increasing trend.
Besides Power, Coal is also required by theother industrial sectors of the Country.
Projected Demand Supply Gap : As high as 943
MT in 2031-32
XI Plan (2011-12)
(Target in MT)
XII Plan (2016-17)
(Projection in MT)
XIII Plan (2021-22)
(Projection in MT)
IEP (2031-32)
(Projection in MT)
Demand of Coal 696.3 980.50 1373.00 2343.00
Domestic
production
554.00 795.00 950.00 1400.00
Gap 142.03 185.50 423.00 943.00
13
SECURED COAL SUPPLY FOR POWER
SECTOR WAY FORWARD
To achieve the objective of secured supply of coal,
effective management of both-the supply side and
demand side of Coal - is of paramount importance.
Supply side comprises coal resources
augmentation, production and procurement of coal
and movement of coal from the source to the Power
Plants.
Demand side of coal is represented by conversion,
distribution and utilization of electricity.
14
MANAGING THE SUPPLY SIDE
Augmentation of Coal resources
Type of Coal Proved (MT) Indicated (MT) Inferred (MT) Total (MT)
Coking Coal 17669.03 13703.32 2101.91 33474.26
Non-Coking Coal 95738.76 12368.44 31488.11 250895.31
Tertiary Coal 593.81 99.34 799.49 1492.64
Grand Total 114001.60 137471.10 34389.51 285862.21
(GSI Figures)
Geological hard coal resources of 286 BT, but only 40 % proven
Geological hard coal resources of 286 BT, but only 40 % proven
Experts estimate that only 21% of the inplace resources can be
recovered (inplace resource to mineable reserve ratio of 4.7:1)
Recoverable coal reserves, thus, about 58.6 BT.
Thus, urgent need to bring inferred and indicated resources under
proven category by increased rate of detailed exploration
Prop up the rate of promotional drilling for augmenting the overall
resource base
Introduce modern techniques for achieving higher exploration rate.
15
INITIATIVES TAKEN
CIL in association with GSI, MECL and private drillers
has upped drilling performance
Aim - to increase resources in proved category and
add new resources through promotional drilling.
Drilling targets increased from 520000m in FY-10 to
610000m in FY-12.610000m in FY-12.
Going for adoption of modern exploration
technologies for rapid delineation of resources.
Efforts are being made towards classification of
resources as per UNFCC code.
16
MANAGING THE SUPPLY SIDE (Contd.)
Enhancement of Indigenous Coal production
Envisaged targets
Sources CIL
(MT)
SCCL
(MT)
Captive Block owners
and others (MT)
Total
(MT)
2011-12 447 51 56 554
2016-17 615 57 123 7952016-17 615 57 123 795
2021-22 650 63 237 950
IEP (2031-32) 1400
Indigenous coal production from primarily three
sources CIL, SCCL and Captive Block Miners and
others.
Limited scope of augmenting coal output from SCCL
Onus on CIL and captive Mining.17
MANAGING THE SUPPLY SIDE (Contd.)
CHALLENGES BEFORE CIL
Growth from 70 MT in early 1970s to in excess of
400 MT at present
Stagnating in recent years
Year FY-05 FY-06 FY-07 FY-08 FY-09 FY-10 FY-11Year FY-05 FY-06 FY-07 FY-08 FY-09 FY-10 FY-11
MT 324 343 361 379 404 431 431
Reasons
Problems of Land acquisition
Delays in obtaining Environmental Clearances
Law and Order problems
Low Productivity18
Problems of Land acquisition
Biggest bottleneck for CIL in achieving targets
Projects delayed due to non-acquisition of land
Against the target of 62000 Ha of land during XI Plan,
acquisition of only 6000 Ha
In-ordinate delays in acquisition of forest land In-ordinate delays in acquisition of forest land
multiple State and Central Government agencies
Delays in acquisition of Tenancy land
non-availability of ownership records
non-cooperation from local administration
absence of uniform R&R policy
19
Delays in obtaining Environmental Clearances
Normative time for obtaining EC is 2-3 years,
but on average it takes 5-6 years
In the FY-11, 154 projects (210 MT total
capacity) of CIL were waiting for environmentalcapacity) of CIL were waiting for environmental
clearance.
Augmentation of production from existing
projects also requires fresh EC delay in
expansion Projects
20
A good chunk of CILs mining areas fall in Naxal-
affected belts
Frequent Bandhs affecting coal output adversely
Land acquisition in these areas is doubly difficult.
Law and Order problems
Low Productivity
Production from the UG mines showing downward
trend over the years
UG mines are operating with very low productivity.
Mass production technology adopted in very few
mines.
Many small Open cast mines also operating with
very low capacity HEMMs and low efficiencies
21
91 projects (ultimate capacity 207 MT) identified in X
Plan of which 86 approved and underway Expected to
contribute 100 MT in FY-12
76 projects (ultimate capacity 178.78 MT) identified in XI
Plan approved and underway
Adopting latest technologies in its mines going for high
capacity equipment in Open Cast mines.
INITIATIVES TAKEN BY CIL
capacity equipment in Open Cast mines.
Introduced high wall miner to win the coal blocked beyond
the ultimate pit boundary.
Introduced independent truck dispatch system in OCPs
Introduced continuous miners in several UG mines
aiming to introduce mass production technology for UG
operations.
Invited bids for private participation in winning coal in
abandoned mines. 22
Efforts to identify sources of coal in the foreign countries acquired two
virgin blocks in Mozambique
Invited EOI from global operators for selection of strategic partners for
overseas operations
Efforts for long term contracts with foreign sources of coal with an aim
to ensure secured supply of coal on sustainable basis
Envisaging buying stakes in foreign coal companies for obtaining coal
supplies.
INITIATIVES TAKEN (Contd.)
Strengthening coal evacuation infrastructures MOU with RITES for
upgrading existing Sidings and also for launching new rail line projects
Proposal to Railways for allowing self owned railway wagons
Proposal to build three new rail links totaling 350 km to connect interior
coal fields
JV with Shipping Corporation for handling import of coal and with Indian
Railways to transport imported coal to customers doorstep.
Constant touch with various Ministries and State/local administration for
statutory clearances in time and to obtain the assistance of local/state
administration, wherever needed.23
Coal sector has been one of the most regulated sectors of Indian
Economy till 1993
Subsequently, captive coal mining has been allowed in several sectors
including Power generation aim was to augment domestic coal
production.
Captive mining did not perform, as envisaged
Out of 208 allotted blocks, mining could be started in only 26 blocks till
date
Likely contribution around 50 MT against targeted 100 MT (FY-12)
CAPTIVE MINING CHALLENGES
Likely contribution around 50 MT against targeted 100 MT (FY-12)
Reasons for poor performance
Lack of serious efforts by several block allottees towards
development of allotted blocks leading to de-allocation of blocks
Land acquisition problems
Employment claim of land losers irrespective of quantum of land
Resistance of PAPs against shifting to rehabilitation sites
Scarcity of land for rehabilitation sites,
Demand of exorbitantly high rate of land compensation
Failure/ delays in obtaining Environmental and forestry clearances
Delay in issuance of mining leases by State Governments
24
Captive mining will have to come of age in future
Output from these blocks needs to be enhanced from a
level of around 50 MT in FY-12 to 123 MT in FY-17 and 237
MT in FY-22.
Some of the required reforms/steps for augmenting the
coal output from captive blocks may be:
Allocation to serious players newly introduced system of
CAPTIVE MINING WAY FORWARD
Allocation to serious players newly introduced system of
competitive bidding likely to eliminate non-serious entities
To create market mechanism for surplus coal produced
Adopting single window system for statutory clearances
Formulating an effective and uniform Land Acquisition
and R & R Policy
Provision of cost effective coal evacuation infrastructure
Support from State Govt. agencies25
MANAGING THE SUPPLY SIDE (Contd.)
Import of CoalGap between demand of Coal and indigenous availability of power coal is
showing increasing trend.
Besides Power Sector, Coal is also required by the other industrial
sectors of the Country.
In view of the projected demand of coal and anticipated indigenous
availability, the demand-supply gap is likely to get wider:
XI Plan (2011-12) XII Plan (2016-17) XI Plan (2021-22) IEP (2031-32)XI Plan (2011-12)
(Target in MT)
XII Plan (2016-17)
(Projection in MT)
XI Plan (2021-22)
(Projection in MT)
IEP (2031-32)
(Projection in MT)
Demand of Coal 696.3 980.50 1373.00 2343.00
Indigenous
availability
554.00 795.00 950.00 1400.00
Gap 142.03 185.50 423.00 943.00
Up till now, the demand-supply gaps were not very wide and therefore
have been managed by import of coal at a relatively smaller scale.
However, to meet the burgeoning coal demand, there is no other way but
to go for the import of coal in a comprehensive and planned manner.
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MANAGING THE SUPPLY SIDE (Contd.)
Import of CoalIssues involved
International coal market is facing severe competition owing to
spurt in coal demand from all corners.
Rising demand of coal in the international market to lead to
increased price volatility.
Present capacity of Indian ports not enough to handle the
imported quantity
Total coal handling capacity of 81 MT against coal traffic of 92
MT (FY 09) idling of vessels
Entry of cape size vessels restricted owing to lower draft of
Indian ports requiring more number of trips of small size vessels
Proposed capacity addition of ports will not be sufficient to
handle the projected volume of coal import.
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INITIATIVES TAKEN AND WAY FORWARD
To ensure sustainable import of coal at reasonable price, assured
coal supply sources need to be located either by entering into long
term agreement with foreign suppliers or by owning mines in a foreign
country or by combination of both.
Indonesia, South Africa and Mozambiqe would be ideal countries to
approach for the sustainable import.
Urgent need to ensure coal supply through import through bilateral
Government level understanding between the two countries.Government level understanding between the two countries.
Indian ports will have to be upgraded to meet the increased volume
of coal import.
Time has come to develop a modern and exclusive deep sea Coal
terminals accompanied with dedicated/captive cargo.
Besides augmenting the cargo handling capacity of ports, it is also
essential to enhance the evacuation capacity for the outward
movement of imported coal from the port to its destination.
Government has taken a welcome decision in the Budget-2012-13 to
exempt the import of coal from custom duty.
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MANAGING THE SUPPLY SIDE (Contd.)
Strengthening logistic infrastructure
Ironical that at on one hand Power Plants are facing shortage of coal
and on the other hand CIL has a pit head stock of around 50 MT (as on
1.1.12) lying unutilized.
Mismatch clearly indicates that the countrys coal evacuation
infrastructure is not capable enough to handle its entire coal
production. The evacuation infrastructure has failed to keep pace withproduction. The evacuation infrastructure has failed to keep pace with
coal production constant increase in the pit head stock from 27.20
MT on 01.01.07 to 49.16 Mt on 01.01.12.
Indigenous Coal production to rise constantly and may reach the
level of 1400 MT by 2030.
Also, about 900 MT coal likely to be imported (2030) to meet the
Countrys projected energy demand.
Thus, role of coal evacuation infrastructure is of paramount
importance.29
WAY FORWARD
Major chunk of coal movement by Rail (49 %) [ Road (27 %) and MGR (19
%)]
Scope of augmenting evacuation capacity through roads is limited.
MGR is an area specific mode of transport cater to a limited area
Hence, burden of coal transportation to be borne primarily by the
Railways Coal traffic by rail mode to surpass 900 Million tonnes by 2030.
Need of dedicated rail lines special NS & EW corridors may have to be
considered by railways.
Introduction of lighter wagons Will reduce the high net to tare load Introduction of lighter wagons Will reduce the high net to tare load
ratio.
A good option is to use Inland Water Transport for Thermal Power Plants
located near the river basins eg Farakka & Kahalgaon Super TPS
Emphasis on coal beneficiation will result in enhanced thermal
efficiency of power plants and also reduction in hauling need by 6-10 %.
Need to upgrade sidings and associated loading equipments,
Loading & unloading infrastructure needs to be fully mechanized
Aerial ropeway, Conveyor belt and Merry-Go-Round rail systems etc.
need to be created and re-vamped wherever necessary30
MANAGING DEMAND SIDE OF COAL A VIABLE
OPTION OF REDUCING DEMAND-SUPPLY GAP
The Demand side of Coal can be monitored and managed
by focusing primarily on three key areas namely:
Improvement in conversion efficiency of TPPs
Average conversion efficiency - 30 %, lower than world average of 36 %.Average conversion efficiency - 30 %, lower than world average of 36 %.
Results in increased specific coal consumption - more CO2 emissions
Steps needed to improve the efficiency of thermal power plants, which
in turn would ensure reduced coal demand:
Maintenance of existing TPPs
Adopting high standards of plant maintenance, to maintain efficiency for
longer periods.31
Design of new Power PlantsAdoption of supercritical (SC) and ultra-supercritical (USC) steam conditions for
new generating plants, in conjunction with modern steam turbine designs key to
improved plant efficiency Coal consumption is almost half in comparison to
conventional sub-critical power plants.
Drying of coal to reduce moisture content
MANAGING DEMAND SIDE OF COAL A VIABLE
OPTION OF REDUCING DEMAND-SUPPLY GAP
contd.
Drying of coal to reduce moisture content High moisture content of coal reduces the efficiency of Coal-fired plants up to five
percentage points
Adoption of efficient coal-drying technology using either waste heat or low-grade
steam
Reduction of Ash percentage Causes loss of heat Results in reduced conversion efficiency
High ash content coal should be beneficiated prior to feeding to the power plants.
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Checking the Transmission and distribution losses
Transmission and distribution losses are still
hovering around 30 % a staggering loss.
On the other hand such losses are as low as 4 % in
Japan, South KoreaJapan, South Korea
Even many developing countries have managed to
peg this loss under 15 %
Urgent need to curb such losses, which in turn
would result in reduced coal demand.
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Judicious use of electricity, use of energy
efficient home appliances, conservation of power
etc. Electricity saved is equivalent to electricity
generated.
FEW MORE STEPS FOR REDUCING THE DEMAND OF COAL
More emphasis on other sources Non-
conventional sources, Nuclear power, Hydel power,
gas based power etc.
Developing alternative sources of energy such as
CBM, CMM, Shale gas, Coal to liquid etc.
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Conclusion
India has the secondlargest population after China, with an estimated 1200 million people. Although Indias annual GDP
growth has been impressive in recent years, but human development index has not improved. Poverty still remains a
major challenge. If India has to eradicate poverty and meet its human development goals, it needs to sustain an
economic growth of 8 % to 10 % over the next 25 years for which proportionate growth in power sector is a must. Power
sector has a very important role to play in achieving the desired growth rate in a sustainable manner. To meet the power
requirements, the sector will have to add at least 20-30 GW of generation capacity on yearly basis.
Indian power sector is heavily dependent on coal for meeting its power generation targets. About 66 % of the coal in the
country is presently consumed in the power sector (Year-2010). At present about 55 % of total electricity production in
India is from Coal Based Thermal Power. It is estimated that Coal would account for about 56 % of power generated in
India even in 2030. Thus coal is going to remain mainstay for achieving the Power generation targets for many years to
come.
At present, India is unable to meet its thermal coal requirements from indigenous sources. The gap between the demand
of thermal coal and indigenous supply is gradually getting wider. During the current financial year 2011-12, the
anticipated gap between the requirement and availability of domestic coal has been estimated around 54 MT, which isanticipated gap between the requirement and availability of domestic coal has been estimated around 54 MT, which is
being made up by import of coal. In view of the projected demand of coal and projected availability of indigenous coal,
the demand-supply gap is bound to get wider in the coming years.
It, therefore, becomes extremely important for the growth of countrys power sector to not only ensure development and
availability of domestic coal resources but also look for import of coal in a sustained manner to fill up the demand-supply
gap.
However, there are various issues and challenges, which need to be tackled for a secured supply of coal to the country
in general and power sector in particular. There is immediate need for initiating multipronged corrective actions to
overcome the various issues and challenges, which are coming in the way secured supply of coal to the industries.
Some of the suggested actions are augmentation of indigenous coal resources, ease and clarity in land acquisition
process, effective and time bound Environmental & Forestry clearance process, emphasis on increased productivity in
mines, adoption of modern technology-both in mining as well as power generation, stress on coal beneficiation, effective
action towards securing import of coal from reliable foreign sources in a sustained and cost effective manner,
modernization of coal evacuation infrastructure, laying emphasis on increased generation efficiency, checking T & D
losses etc.
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