The most important point to note is that a developing country like India may have to consume electric power by higher amount. This is because without consuming more power material condition of the common people can not be uplifted. At the same time the cost of power should not be so high so that it becomes beyond means of the common masses. Moreover, the availability of cheap power supply has been a precondition to competitiveness in the global market. This is why the production of coal based power has been the first option for India. Side by side India has to modernise its power production system with a view to increasing efficiency of the use of coal.
The recent perspective
After the Glasgow COP26 Climate Summit last November, there has been a common perception that use of coal is the main culprit for rising greenhouse gas emission, climate change and global warming. It is a matter of another controversy that there is debate among scientists as to whether the cause of global warming or climate change is human induced or a naturally occurring phenomenon. A section of very well-established scientists consider that it is a natural phenomenon and not caused by human activity. But a disproportionately higher number of scientists believe that these factors are human-induced and can be reduced with focused policy level interventions.
Status-quo of coal based energy in the economy as awhole
In 2019, coal comprised 27% of the world’s primary energy consumption and 36.4% of all electricity generated in the world. So, coal is considered as an essential resource for tackling the challenge of the energy crisis – globally. Consumption of energy has been rising rapidly in the world. Besides power generation, coal has other important uses in different industries. Metallurgical (coking coal) is a key ingredient in steel making. Coal converted to coke is used to produce around 70% of the world’s steel. Cement production is also dependent on coal for its energy source. At present fly ash, a by-product of coal, is heavily used in producing cement around the world. Coal is heated and pressured with steam to produce gas for domestic lighting, heating and cooking. Coal based energy cannot be replaced completely by renewable energy It is liquefied to make synthetic fuels similar to petroleum or diesel. Coal gasification can further be processed to produce chemical building blocks such as methanol, ammonia and urea. Coal is also largely used in paper, textiles and glass industries.
Supply of coal to be seamless in India
A coal crisis has been developing in India for over a year. Coal production has been dipping in 2020-21. At the same time, import of coal has also been slowing down so there is no scope to offset the crisis. At present, coal prices in the international market are very high. Additionally, the Indian government is disinterested in importing coal. High prices of petroleum oil have impacted the economy badly. Energy related components like natural gas, crude oil, electricity and coal cumulatively comprise about 6% of India’s consumers’ price index number (CPI) basket. It is studied that the higher energy cost could add about 0.6% to 1% point to headline inflation over the next six months.
The present situation of coal supply
The overall coal production during October 2021 has significantly increased by 28.2% to reach 63 million tonne (MT) compared to October 2019 (pre covid period) and 14.7% compared with October 2020. On a cumulative basis, India’s coal production increased by 12.2% during April 2021 to October 2021. In August and September, the despatch or supply of coal was badly hit. But in October, shipment of coal was much higher. It had been 70.4 MT in the month of October 2021 as compared with 59.9 MT and 50.5 MT in October 2020 and October 2019 respectively. The despatch of coal to the power sector and captive power plants increased by 42% and 44% respectively during October 2021. But in other sectors like cement, steel and sponge iron, supply of coal decreased if one compares the figures with those of October 2019.
Stock at power sector
The coal stock in the power sector has increased but it is not at all comfortable. The average daily stock at 135 coal fired thermal power plants increased to six days on November 1, 2021 as against around four days of fuel stocks seen in mid October 2021. This, of course, is much lower than the prescribed 22 days’ fuel stocks.
The mismatch of demand and supply of power
The domestic demand for coal from the power sector picked up during August 2021 due to rise in business activities in the country. It is expected that the supply of domestic coal will rise as usual in the coming months. In the winter season, the supply of coal in India increases. At the same time, rising demand for coal cannot be met through import of coal only. One of the reasons has been the very high prices of coal in the international market. So, the mismatch may remain in the coming months. At the same time, the demand for power will be lower in the vast areas of the country in the winter season from the household and commercial sectors. Experts think the sudden decrease in supply of coal was due to natural calamities like floods and prolonged rains this year. Actually India has the capacity to meet the demand for coal on its own. But it will take some time.
Use of coal should be continued but its efficiency to be increased
It has been already mentioned that the use of coal is so encompassing in India that reduction of coal use is not possible even in the medium term. Some experts think that reduction of marginal use of coal in the economy is the only way. That means in the future, the share of coal used in producing power or in other industries will have to be lowered. But most importantly, many experts suggest that increasing the thermal efficiency of coal plants is most important for reducing emissions from thermal power generation. At the same time, this policy will have to be taken up by other industries as well. Advanced supercritical plants have thermal efficiency rates which are 80% higher than that of our state electricity board plants. Scrapping and replacing old plants with modern ones is the first step. Installing kits to clean up the flue gas is another. This can be implemented provided developed countries keep their promises to give financial support to the developing countries for reduction of emissions. Coal can be gasified and burning that gas to produce power reduces emissions by 50%. There are various chemical processes through which coal can be cured to be used more efficiently and with lesser emission