• The country’s coal production increased by 12.94 per cent to 89.96 million tonnes in January 2023.

• India’s coal output stood at 79.65 million tonnes (MT) in the corresponding month of the previous fiscal.     

• As per provisional data of the coal ministry, Coal India Ltd (CIL) registered a production growth of 11.44 per cent in January, whereas Singareni Collieries Company Limited (SCCL) and captive mines, and others posted a growth of 13.93 per cent and 22.89 per cent, respectively.

• Of the top 37 coal producing mines, production of 28 was more than 100 per cent, while the output of three mines stood between 80 and 100 per cent during last month. 

• At the same time, coal despatch increased by 8.54 per cent to 81.91 MT last month compared to 75.47 MT in January last fiscal.

India is the 2nd largest coal producer

• As per Coal Directory 2020-21, India is the second largest coal producer and importer in the world.

• According to the Economic Survey, the coal production for FY23 is estimated to increase to 911 million tonnes, about 17 per cent higher compared to the previous year. In April-December, 2022, coal production  rose by 14 per cent on a year-over-year basis and was 21 per cent higher than the pre-pandemic of FY20.

Different measures have been initiated towards achieving self-reliance in coal production. They include:

i) Private participation in coal production.

ii) FDI under the automatic route.

iii) Auctioning of coal blocks for commercial production.

iv) Expansion of existing mines and opening of new mines. 

v) Greater use of mass production technology in mining, mechanisation of loading, development of evacuation infrastructure, etc. 

• The coal industry is expected to grow at 6-7 per cent annually to reach a production level of 1 billion tonnes by FY26 and about 1.5 billion tonnes by 2030. 

• The enhanced domestic coal production is expected to meet domestic coal demand, replace substitutable imports, and escalate exports. 

• There has also been a persistent effort to improve system capacity utilisation from about 80 per cent to above 90 per cent.

Maintaining energy self-reliance during uncertain times

• At the beginning of the financial year 2022-23, coal availability became a challenge for India’s largely thermal-based power generation plants because of a resurgence in economic activity and the emergence of intense heat waves from early March to mid-May of 2022, increasing the demand for power in the country. 

• In addition, in the wake of rising international coal prices, the power sector curtailed coal import drastically from 69 MT in FY20 to 45 MT in FY21 and further to 27 MT in FY22. 

• As domestic coal production could not keep pace with its rising demand from power-generating plants, its availability got limited. 

• Resultantly, in April 2022, even as coal offtake rose to meet higher demand, coal stock with power plants, as on April 31, 2022, fell to eight days from 12 days a year ago. 

The government of India undertook several steps on a priority basis through April and May of 2022 to address the supply constraints of coal. 

They were:

i) All generators were asked to import coal to the extent of 10 per cent of their requirements (as against 4 per cent earlier). Penalties, including curtailment of domestic coal entitlements, were announced if power plants failed to import coal. 

ii) Section 11 of the Electricity Act 2003 was invoked to direct imported coal-based plants to run at full capacity with the assurance that their enhanced cost of operation would be compensated. 

iii) Tolling was enabled, which allowed states to transfer their allotted coal to private generators near the mines instead of transporting it too far away from state generators. This move eased the burden on the availability of railway rakes. 

iv) Rural Electrification Corporation (REC)/ Power Finance Corporation (PFC) and commercial banks were advised to facilitate the availability of additional working capital to power generating plants.

Manorama Yearbook app is now available on Google Play Store and iOS App Store