As focus shifts to green energy, govt to put aside 1 billion tonne coal production plan
It's time for a reality check for Coal India Ltd (CIL) and the coal-based economy as a whole.
The central government has decided to put aside the grandiose project Utkarsh-- a roadmap for achieving 1 billion tonne production by CIL by 2020 at an investment of over Rs 1 lakh crore -- in the light of rapidly changing socioeconomic dynamics in which the country needs less coal.
It is now looking to formulate Vision 2030 for the coal sector.
There is now a realisation that "there is uncertainty about the long-term future of the coal sector which employs around a million people" and that "India does not need additional non-renewable power plants till 2027" -- factors which have prompted the government to go for a revised roadmap, according to the brief given to the consultants wanting to draft strategy for the vision document available with DNA Money.
"It may be said that the Indian coal sector is at a crossroads today. While it has performed well in the last several years, the potential for performance of the sector needs to be assessed in light of multiple changes in the energy sector. Hence, the Ministry of Coal intends to assess the long-term vision up to 2030 for the coal sector in India," the document says.
Coal has long been the mainstay of power generation in India, with around 60% of the installed capacity and 76% of the total generation coming from coal-based generation.
The government believes coal would be the dominant source of fuel for power generation till such time affordable, sustainable and reliable option for power is found.
However, there is uncertainty over the long-term future of the coal sector.
"Draft National Electricity Plan, 2016 states that India does not need additional non-renewable power plants till 2027 with the commissioning of 50,025 mw coal-based plants under construction and additional 1 lakh mw renewable power capacity. With government's efforts to push renewable energy due to international conventions on climate change, increase in carbon cess and other initiatives for lesser use of coal, there is a need for 'Vision 2030 for the coal sector' which takes into account the environmental factors such as reduction of carbon footprint, non-abatement of global warming," the documents highlights.
To draw up the strategy paper, the consultant needs to study economic and regulatory environment and trends and impact on coal demand; energy demand by 2030 based on expected economic growth and energy intensity of the economy; technology trends like falling cost of renewables, evolution of energy storage and growth of electric; evaluate impact of climate change and carbon footprint reduction obligations and strategy to meet the obligations under climate change agreement.
... & ANALYSIS
- Coal has long been mainstay of power generation in India, with around 60% of the installed capacity and 76% of the total generation coming from coal-based generation
- The government believes coal would be the dominant source of fuel for power generation till such time affordable, sustainable and reliable option for power is found
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"It may be said that the Indian coal sector is at a crossroads today. While it has performed well in the last several years, the potential for performance of the sector needs to be assessed in light of multiple changes in the energy sector. Hence, the Ministry of Coal intends to assess the long-term vision up to 2030 for the coal sector in India," the document says.
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