India’s coal demand to be 2 BT by 2047; transition from coal not imminent: Govt

Coal demand in India is going to increase to 2 BT by 2047 and a transition away from coal is not happening in the foreseeable future, says a Coal Ministry report
India’s coal demand to be 2 BT by 2047; transition from coal not imminent: Govt
India’s coal demand to be 2 BT by 2047; transition from coal not imminent: GovtEnergy Watch

New Delhi: A report prepared by the Energy Cell of the Ministry of Coal has said that coal demand in India is going to increase even after 2030 through 2047 to 2 Billion Tonnes (BT) and despite the global pressure, a transition away from coal is not happening in the foreseeable future. Additional Coal Secretary M Nagaraju, who has penned the foreword for the report, said, “In India, coal is the main source of energy, contributing to around 73 percent of the energy mix, and around 75 percent of electricity is generated by coal. Even though there is immense pressure from the global community to move away from coal, in the near future, it will not be easy for developing countries like India, which is highly dependent on coal, to move away from coal. As per our analysis, coal demand is likely to rise to 1.5 BT by 2029- 30 and 2 BT by 2047.”

India’s coal demand yet to peak: Report

The report, released by the Coal Ministry on February 13, said that India’s coal demand is yet to peak. As per Economic Survey 2022-23, coal demand is estimated to be around 1.3-1.5 billion tonnes by 2030. It is also estimated that the demand will likely continue to peak between 2030 and 2035. Electricity generated by coal-based power plants increased by 10 percent between 2021-22 and 2022-23, said the report.

It is also observed that there is no decline in coal-based electricity generation in the FY 2022-23 over the FY 2021-22. There is no report of any coal-based power plant shutdown due to coal shortages during 2021-22 and 2022-23, the report stated.

Despite global pressure, transition away from coal not happening: Govt

Referring to the mounting global pressure to move away from coal, the report said that a transition away from coal is not possible for developing countries like India. The Coal Ministry’s report also clearly stated that since there is no scenario of a transition away from coal, no impact is envisaged on stakeholders involved in coal mining.

The report and the statement is significant because it comes at a time when the government is looking to increase private investments in the coal sector through commercial coal mine auctions. Successful bidders who have won coal mines under various rounds of auction have approached the ministry, citing difficulties in getting financing from lending institutions for coal mines. The Coal Ministry has also reached out to state-run non-banking finance company (NBFC) REC Limited, requesting the company to extend loans to the coal mining sector.

“However, there is immense pressure from the global community to move away from coal. However, the transition from coal is not happening in the foreseeable future. It is difficult to move away from coal in developing countries like India, which is highly dependent on coal. Thus, as of now, there is no scenario of transition away from coal affecting any stakeholders involved in coal mining. However, the Ministry of Coal has constituted a Sub-Committee to look into holistic closure of abandoned/legacy mine sites and mines closing due to exhaustion of reserves, viability issues etc., and involving social aspects of mine closure on principles of just transition in addition to physical and environmental closure,” said the report.

Coal contributes 73% to India’s energy mix

Citing an increase in coal-based power generation, the report said, “There is likely an increase in coal-based generation on account of the uncertainty in the realisation of the expected/scheduled capacity addition from hydro, nuclear, renewable sources and climactic factors like drought conditions, etc. In India, coal is the main energy source; it contributes around 73 percent to the energy mix, and around 75 percent of the country’s electricity is generated by coal.”

During FY 2021-22, the consumption of energy from coal and crude petroleum was the highest, accounting for about 47 percent and 31 percent of the total consumption, followed by electricity from hydro, nuclear and other renewable energy sources at 14 percent, natural gas at 7 percent and lignite at 1 percent, which indicates the dominance of coal in the overall energy consumption in India, said the report. The main sources of electricity generation are coal, natural gas, hydro, nuclear, biomass and other renewable sources, it added.

“The coal sector has witnessed an unprecedented upswing, with production, dispatch and declining import trends. The Ministry of Coal remains committed to consistently maintaining energy security through coal production and dispatch, ensuring an uninterrupted supply for a reliable and resilient energy sector that contributes to the nation's continued growth and prosperity,” the report stated.

“Electricity is central to many parts of life in modern societies. It will become even more so as its role in transport and heating expands through the widening use of electric vehicles and heat pumps. Coal has been the main contributor to power generation for many decades. Power generation is currently the largest source of CO2 emissions globally. Still, it is also the sector leading the transition to net zero emissions through the rapid deployment of renewables such as solar and wind,” said the report.

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