Home » India Coal Conference 2011: Coal-based power no longer lucrative biz

India Coal Conference 2011: Coal-based power no longer lucrative biz

India Coal Conference 2011: Coal-based power no longer lucrative biz

Conference discusses viable options before coal industry; domestic production of coal, not increase in its price, needs a boost to correct situation, say experts.

Estimates say demand for coal in 2021-22 is pro­jected at 1,353 million tonne (mt) against the production assessment at 1,084 mt, leaving a shortfall of 269 mt. Demand for coal is growing faster than oil and gas as China and India, and India may double imports of thermal coal to 104 mt this fiscal.

In the same environment, more power producers than ever before are shying away from coal-based power generation – a fallout of the price rise in coal. With a highly regulated power sector and a far more open coal sector, the recent pullout by captive power producers magnifies the need for a better match between user and producer sectors. A day after Coal Minister Sriprakash Jaiswal announced that 216 coal blocks will be available for competitive bidding, practitioners in the India Coal conference in Kolkata were heard lamenting that many blocks available for private companies are among the least viable. “Inefficient allocation” of coal blocks is partly responsible for not meeting coal demand, said NN Gautam, conference chair and Advisor (Projects) to the Ministry of Coal.

This year, India Coal conference, held in Kolkata on 26-27 July, focused on the theme “Harnessing new tech­nologies and methods for a sustainable future”, including a need for augmented efficiency through technology, infrastructure and methodologies. “Policies must emerge from new technologies,” said Chief Guest Satish Puri, Director General of Mine Safety. Speakers also pointed out to the need for monitoring of such processes: comprehensive Detailed Project Reports (DPRs) should be mandated, as the industry has not been preparing such reports effectively. From “blast-less” mining technology to the need to encourage more underground mining and a proposal to set up “mega coal mining” blocks, speakers made a case for coal's sustenance through adopting new technologies, processes and ideas. Larger capacities and connectivity are major deterrents in viable growth, JP Panda, MD, Priya Mining Consultants, and Ganesan Natarajan, President & CEO, Ennore Coke, said.

The conference also witnessed a healthy debate on the feasibility of import of coal (27 mt coal is imported, 85 per cent of which is from Australia) and acquisition of coal mines. There must be a reason private players are choosing to import rather than utilise coal blocks, dele­gates said on the sidelines of the conference. Relatedly, optimisation of coal flows can bring about annual savings to the order to Rs 5,800 crore-about 25 per cent of total transportation cost, said Bidyut Chakraborty of KPMG, recommending a logistics reform and “linkage consolidation” for coal. Linkage-based power plants will face an increasing shortage of coal-up to 32 per cent in the next five years, he said.

Problems of infrastructure and dealing with various agencies of the government for clearances are among the irritants, speakers said. Gautam said forest clearance issues are likely to result in 250 mt of coal loss in the short term. Citing two recent examples on the con­fe­rence's sidelines, practitioners said the trend will be to hire and outsource clearances to private “consultants”, thereby institutionalising “payoffs” for the purpose. The Ministry of Environment and Forests should spend on creating new forests and ease up Port capacities and railways' general lack of initiative in making coal-frie­ndly policies continue in the face of rising demand.

The Indian coal industry is the fourth largest in ter­ms of coal reserves and third largest in terms of coal pro­duction in the world. But despite its huge resource base, India has not been able to minimise its coal deficit.

Earlier, welcoming the gathering, ASAPP Media's Group Executive Editor Shashidhar Nanjundaiah laid down the theme for the conference and said the conf­erence hoped to develop and take forward recomm­en­dations that emerge to relevant authorities.

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