Under-utilization of India’s Coal Mines: GEM Report

Context

• An analysis by Global Energy Monitor (GEM) shows that India’s coal mines are severely under-utilized amid push for new ones.

About

• Global Energy Monitor (GEM) is a firm that tracks utilization of the fuel source internationally.
• GEM performed its analysis by surveying annual reports of Coal India Limited (the largest coal producer in the world) and its subsidiaries.

Key Findings of the GEM Report

• Capacity underutilization: While some mines are utilizing only two thirds of their capacity, some other large ones are using only 1%.
• Short term supply ­crunches: 

• 99 of India’s coal mine projects under development which were expected to yield 427 million tonnes per annum (MTPA) are unnecessary.
• Opening new coal mines might not mitigate short term supply crunches. 

• Coal crisis: 

• India experienced severe coal crises at least twice in 2021.
• More than 100 of 285 thermal power plants witnessed fall in coal stocks below the critical mark of 25% of the total stock and below 10% in over 50 plants. 

• Power shortages: Coal crisis led to power shortages in several States likeAndhra Pradesh, Jharkhand, Uttarakhand and Madhya Pradesh.  
• Coal India Limited (CIL): The company however, doesn’t consider capacity constraints as a reason for underutilization of capacity and failure to reach production targets.  
• Plethora of factors: The CIL reported that competition from renewables, infrastructure impasses, and land use concerns as factors hindering output.

• Tribal displacement: Coal mines under development threaten to displace hundreds of villages severely affecting lives and livelihoods of 87,630 families, in which at least 40% of the predominant population is tribal communities. 
• Threat to natural resources: Mines under development have the potential to threaten-

• 22,686 hectares (ha) of agricultural land
• 19,297 ha of forest
• Consumption of at least 168,041 kilolitres of water per day (comparable to the daily water needs of over one million people).  

• Underlining of concerns: The GEM report highlights potential issues with the mines under development and the proposed mines, as follows:

• Increase India’s likelihood of stranded assets
• Delay a clean energy future
• Irreversible impacts on India’s rural communities and environments 

• Warning signs ignored: The Indian government is ignoring the fact that new mines can’t remedy the coal industry’s old problems. Opening new mines in the present might intensify the sector’s weaknesses and inefficiencies in future. 

Coal

• Coal is fossil fuel and is also known as ‘Black Gold’.
• In India, coal is found in a form of sedimentary rocks.
• Coal Reserves: Gondwana coal constitutes around 98% of India’s total coal reserves, rest is Tertiary coal.
• Types: 

• Anthracite (purest and with carbon content of 80-95%)
• Bituminous (carbon content 60-80% and impurities)
• Lignite (carbon content of 40 to 55% and high moisture content) 
• Peat (carbon content less than 40% and heavy in organic matter)

• Coal is a widely available conventional source of energy and has several industrial applications. For example, coking coal in the iron and steel industry.
• Thermal power plants (coal as a raw material) are widely distributed in India as they have lower capital costs than hydel and nuclear plants.

India’s Energy Mix

Coal Distribution: 

• Jharkhand has the largest reserves of coal (26% of the total)
• Chhattisgarh has the third largest coal reserves, but ranks first in the production of coal (extraction).

Way Forward

• The government of India needs to factor in competition from renewables and possibility of rising conflicts over land use in future.
• The Prime Minister of India has announced a goal of net zero (emission from consumption of fossil fuels) target of 2070.
• Realization of the target will require optimum capacity utilization of existing mines, enhancing the share of renewable energy market w.r.t solar energy, hydrogen fuel, ethanol blending etc.

Source: TH