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India's Energy Security: Role of Coal, Shri R V Shahi, Former Secretary, Ministry of Power

The Energy & Resources Institute (TERI) organized a multi-stake holder discussions on "Coal for India's Security : Where are we heading ?" on August 29, 2007. This was attended by a distinguished group of experts and professionals. Shri P.C. Parakh, Former Union Coal Secretary, moderated the discussions. There were three important and comprehensive presentations - by Central Mines Planning and Design Institute (CMPDI), by Shri S.K. Chand, an expert on coal and by the Director General of Geological Survey of India, Shri Mukhopadhaya.

The discussions centered around some of the very major issues concerning coal and regarding the long term strategy which the country should follow as an overall framework of its approach towards energy security. As of today, obviously coal occupies the most dominant role. As a matter of fact, more than 60% of power generation is based on coal. Some of the specific issues, that need deeper analysis for formulating our strategy, were identified as follows :

  1. With regard to the availability of coal, it is essential to have, as accurate as possible, an estimate of India's coal reserves.

  2. It is not enough to have just the coal reserve estimation. Perhaps, more important it is to determine, keeping in view the technological capability, how much of these reserves can be extracted.

  3. On a long term time horizon, our strategy also needs to focus on the extent of dependence that the country can afford on use of imported coal.

  4. Quite apart from import of coal, the need for acquisition of coal mines abroad, in the context of enhancing the energy security for the country, and also an objective analysis of its impact in the case of any disruption of production and supply of such coal would be essential.

  5. The institutional framework which can deliver best possible results by deployment of suitable technology, adoption of best possible practices and through modern approaches to management, is required to be put in place.

  6. Globally, climate change related issues are receiving extensive attention and the countries which depend on coal as an important source of energy are definitely going to be the target of discussions and, in many cases, persuasion for minimizing coal consumption. Therefore it would be important to formulate an appropriate approach towards mitigating global warming problems and also towards articulating India's position vis-à-vis global concern on climate change.

  7. Large scale production of coal has seen, over last three decades, reversal of proportion of underground mining substituted by open cast mining. This has inevitably resulted in massive destruction of forest reserves. It would be essential to see how best the concerns of protection of environment and forests are addressed.

  8. By 2032, as per Integrated Energy Policy, the installed capacity of power has to rise to 800 GW from the present level of 135 GW. Though, in the coming decades all attempts are being made to substantially jack up the proportion of capacity from other sources such as hydro electric, nuclear, gas, wind, bio-mass etc., the dominant role of coal as primary fuel for power generation is likely to continue, though its overall proportion might decline in the next 25 years. Yet, in this time frame, the coal supply may have to be increased from 400 million tones per year as at present to almost 2 billion tones per year by 2032. We have to project and predict the impact that this would create on need for land acquisition, forest destruction and therefore consequential need for massive afforestation and rehabilitation and resettlement of people who are displaced for development of these coal mines.

  9. A very important issue is the extent of recovery out of the exploitable reserve. There are various estimates which vary from 15% to a high figure of 30%. The overall itself seems to be a very low figure of less than 25%. The role of new technology and modern extraction methods to enhance the extent of recovery is essential.

  10. The demand side management which relates to the need for efficient consumption of coal is equally important. Here, the track records of all the consuming sectors require much to be desired. In the case of power sector there are old power plants which have inefficient machines consuming almost 25% more coal than they should consume. Modern power stations are comparatively better but even in these cases there is considerable scope for improving fuel efficiency.

These are the main issues around which various presentations followed by comments and observations focused. An important point that emerged is in relation to our estimation for coal reserves. As in April 2007, the coal reserves both for coking and non-coking coal is estimated to be of the order of 257.38 billion tones. About 87% belongs to the non-coking category meant primarily for power sector. The following Table presented by CMPDI gives the details of coal reserves:

Coal Resources

Type-wise Coal Resources as on 1.4.2007

Coal Type Category Total (in Bt) Resource (%)
Proved (in Bt) Indicated (in Bt) Inferred (in Bt)
Prime Coking 4.61 0.70 - 5.31 2.07
Medium Coking 11.85 11.60 1.88 25.33 9.84
Semi Coking 0.48 10.03 0.22 1.71 0.66
Total Coking 16.95 13.30 2.10 32.35 12.57
Non Coking 81.64 106.77 35.67 224.08 87.05
Tertiary 0.47 1.06 0.37 0.94 0.37
Total 99.06 120.18 38.14 257.38 100
% Share 38.49 46.69 14.82 100
*As per Indian Standard Procedure (ISP)

There have been limitations in the process of estimating coal reserves particularly when it relates to reserves at lower depths. As per the estimates, more than 60% of the reserves fall in the category of depth upto 300 Meters. If we go upto the depth of 600 Meters almost 92% of the total reserve get covered. The following Table presents the picture about reserves at various depths.

Coal Resources

Depth-wise Coal Resources as on 1.4.2007
Depth (m) Proved (In Bt) Indicated (In Bt) Inferred (In Bt) Total
(In Bt) (In %)
0-300 76.72 65.56 14.30 156.58 60.84
300-600 6.97 42.61 16.03 67.61 26.27
0-600 (Jharia) 13.71 0.50 - 14.21 5.52
Sub-Total 97.40 108.67 32.33 238.40
Coal Resources beyond 600 m depth
600-1200 1.67 11.51 5.80 18.98 7.37
Total Coal Resources upto 1200 m depth
Grand Total (0-1200) 99.06 120.18 38.14 257.38 100
% 37.5 47 15.5 100
*As per Indian Standard Procedure (ISP)

The following points which emerged during very extensive discussion about issues relating to estimation of reserves are relevant to be mentioned.

  1. Adequacy of our technology and method of estimation:

The Director General of Geological Survey of India highlighted a number of constraints that we are faced with in making such estimates. He also emphazised that this was a continuing process and over a futuristic time frame more and more of reserves could get identified. Constraints of both the hardware including tools and tackles which may correspond to the latest state of the art technology as well as adequacy of capable manpower do present a problem if we have to expedite the process and make it more accurate.

  1. The group had a number of eminent mining engineers and geologists. It was a general consensus that India has significantly higher coal reserves than discovered so far. In years to come when we are able to cover more areas and deeper seams, coupled with technological advancements in the process of investigations and discoveries, more reserves would be found out.

  2. It was an agreed conclusion that the Geological Survey of India needs to be strengthened and empowered in terms of technologies and in terms of manpower. They also need to be given the required degree of autonomy of operations so that they are able to deliver much better results.

While the estimated reserves as mentioned earlier are of the order of 257 billion tons, as per Coal Vision 2025, the extractable reserves are only of the order of 52.24 billion tons as given in the following Table :

Total extractable reserves (Based on 2005 data)

Proved Bt Indicated Bt Inferred Bt Total Bt Extractable Bt % of Total
CIL 67.71 19.42 4.56 91.69 30.03 33
Rest* 25.25 97.66 33.24 156.15 22.21 14
Total 92.96 117.08 37.80 247.84 52.24 21

*Includes SCCL, DVC, Tata, Jindal, and all others

There was a long and involved discussion on the data presented in the above Table. A few points emerged :

  1. It was difficult to find out how much of the 52 billion tons is out of the proved reserves of 92.96 billion tons where detailed investigations have been done. A clear picture also did not emerge on how the estimations have been done from the indicated and inferred reserves so as to determine the extractable reserves from these categories. It was quite clear that for better reliability of these data the system and method must be made completely unambiguous.

  2. Experts were of the agreed view that as the time advances, the quantum of extractable reserves could definitely increase. The organizational set up of CMPDI, its capability to undertake the vast and challenging task did come up as a matter of serious concern. The chart presented by CMPDI itself indicated that almost 60% of the reserves are in the non CIL Group. CMPDI is the premier institution for the purpose of investigations and preparation of geological reports to highlight the extent and the nature of reserves. Its scope includes not only CIL coal blocks but all blocks for the whole country.

  3. In this context it was felt that we need to have a number of agencies which should be developed, and should be facilitated to acquire expertise so that in a given time frame, the country is in a position to know more comprehensively all the relevant details of our coal deposits.

Important points, which were brought out by way of action strategy for the future could be summarized as below:

  1. India must acquire a large number of coal mines abroad. Coal India Ltd. and other agencies should have taken this initiative long back. China has already done so in a number of countries. In the interest of energy security, this strategy is considered necessary and important. Coal India, NTPC and large companies in power could take this up on priority with urgency.

  2. Unlike Petroleum sector, where these reserves are concentrated in pockets and in a few countries - the countries which have demonstrated a very unpredictable market behaviour - coal deposits are available in much larger number of countries and particularly in such countries from which we could expect a much more predictable approach. Wisdom therefore lies in identifying the right places where Coal India Ltd. and others could be encouraged to acquire coal mines even now though we are late.

  3. Underground coal mining has been neglected, with inevitable adverse consequence on quality of coal as also on environment. Steps need to be taken to reverse this process. Large coal companies have particularly special responsibility for this.

  4. The rate of recovery from the extractable reserves is very low in India. Our experts have to put their heads together to see how best we improve the rate of recovery from the present level of 20-25%.

  5. Forest clearance for the mine development is really posing a serious problem. Forest banks which were thought several years ago have yet to become a reality in practice. Power and Coal sector alone have contributed large amount of funds but at the level of State Governments larger portion of there funds have not been used for forest development. It is time that all the coal companies and the power companies under the Govt. of India umbrella revive the scheme of creating a special purpose vehicle (SPV) to develop large national and regional forests. The country has waited far too long for appropriate use of the money that has been deposited in last 20 years by these companies with the hope that these funds will be used for creating forests under the compensatory afforestation programme. This has also led to lack of confidence among the public in general and the concerned NGO's in particular towards the genuine concern of the scheme and of the Govt. If we would have been able to develop, in last 20 years a few very large national and regional forests through proper utilization of these funds, the approach of authorities and agencies, of NGO's and of global agencies, with reference to sanctions of coal and power projects might perhaps have been different.

  6. In futuristic time frame, more and more of reserves could get identified. Constraints of both the hardware including tools and tackles which may correspond to the latest state of the art technology as well as adequacy of capable manpower do present a problem if we have to expedite the process and make it more accurate. Both the premier organizations namely the Geological Survey of India and CMPDI need substantial strengthening - in terms of number and in terms of quality of people. They also need to be provided adequate funds so that the latest technologies including instrumentation could be used for the regional surveys as also the detailed geological investigations.

  7. It was a revelation during discussions that the estimates that have been projected also include the burnt out coal as well as the coal which has been extracted. This obviously then presents a highly distorted picture about coal reserves. What would be necessary to know for formulation of an appropriate strategy toward energy security is a) correct estimation of reserves which are unused and can be extracted, and b) with best possible technology and modern production process the amount of coal that can be produced. Any other picture mixed with so many variables would not lead to any meaningful conclusion let alone a dependable strategy for energy security.

  8. The ultimate objective of getting the best from our coal as natural resource towards mitigating energy security concerns can be met only when the coal sector is opened up. This was the considered view and the consensus during these discussions that open access in mining would lead to introduction of new technologies, competitive process of production and therefore competitive price in the interest of consumers at large. However, even with the best of intentions, the Bill on opening up of coal sector has been under consideration of the Parliament for last over seven years. It may take some more time for the opening up of the coal sector to happen. In the meantime all efforts should be mounted to make the captive mining initiative of the Govt. a success. This may not be the best but this is definitely the second best solution.

  9. During the transition period till the competitive market structure, with a large number of players producing coal emerges, role of regulator becomes crucial. The consumer interests have to be balanced with the interests of other stake holders. A suitable regulatory mechanism therefore appears to be necessary for developing coal industry and for fixing price during such transition stage.

  10. Another suggestion - A very practical one - which was put forth was in relation to declaration by the Environment and Forest Ministry for "No Go Area". This would, in a transparent manner, let the coal development agencies know in advance that certain areas are not possible, from the point of view of environment/forest, to be touched. However, this exercise has to be done very carefully and any indiscriminate exclusion or declaration of restricted area might render a lot of our energy resource remaining unexploited. A more positive and practice approach could be to create much larger areas of new forests, in lieu of what is destroyed, so that this issue is squarely addressed forever.

  11. Power Sector must deploy latest super critical technologies in its future projects so that higher efficiency of these plants require lesser amount of coal. There should be a phased programme for modernization of old plants with this objective in view, keeping in view, however, the economics of these interventions.