India Must Take Steps Like China, To Reduce Use Of Low Quality Coal: Niti Aayog

The coal quality use in India has high ash content and low energy content, according to Niti Aayog. In order to improve the current situation, the think-tank in its three year action agenda 2017-18 to 2019-20, has pitched to follow China in order to reduce the usage of low quality coal in the country.

“India uses 640 grams coal per kWh. Whereas, in 2015 China reported use of 308 grams coal per kWh and further targets less than 300 grams coal per kWh under 2014-2020 state council energy action agenda,” said Niti Aayog.

Apart from low quality coal, the draft also mentions the problem of low energy efficiency levels of Indian coal-fired power plants, operating on 30 per cent - 32 per cent with an average CO2 emission of 1.08g kg/kWh. Both the indicators put India on the lower band of the world comparison table.

As a part of the action plan, the think tank says that the efficiency of existing thermal plants should be raised through Renovation and Modernization (R&M). The old plants with high station heat rate, especially when located in or near heavily populated regions, should be phased out.

It also suggests that the new power projects to be initiated during the Action Agenda period, especially if located in or near heavily populated areas, should be on ultra- super critical technology which uses 20 per cent less coal per unit of electricity as compared to a subcritical coal plant.

“The collaborative research and development on Integrated Gasification Combined Cycle (IGCC) between NTPC Ltd and Bharat Heavy Electricals Ltd (BHEL), and other agencies should be actively pursued,” adds the action plan.

Also, Coal India Ltd (CIL) has to raise its production from the current level of 536.5 million tonnes (MTs) in 2015-16 to 1 billion tonnes by 2019-20, depending on coal demand.

“The reality of India’s energy sector is that around three-quarters of our power comes from coal powered plants and this scenario will not change significantly over the coming decades. Thus, it is important that India increases its domestic coal production to provide energy security and reduce its dependence on imports,” says Niti Aayog.

In order to increase the coal productivity in the country, the action plan calls for several measures:

Use of market mechanisms to open the coal-mining sector for commercial mining. Allowing specialized mining firms to mine coal can go a long way towards improving the efficiency of mining.

Ending the current practice of segmenting coal markets between power and non-power sectors with subsidy being given to the ultimate intended beneficiary through direct benefit transfer.

The implementation of the proposal to spin-off the subsidiaries of CIL as separate public sector entities for them to independently develop their own strategies and business models.

Efforts to improve labour productivity, increase coal production and enhance efficiency of distribution. The output per man shift (OMS) from underground mines should be raised to increase coal production from underground coalmines, which is currently around 8 per cent of the total coal production.

By 2019, completion of three critical Railway lines namely Tori-Shivpur, Jharsuguda-Barpalli and Mand-Raigarh to significantly augment coal evacuation.

The on-going auction process and transfer of mining lease and other related activities of captive mines to the new successful bidders should be expedited by 2018. The production from captive blocks has been targeted at 400 MT by 2020; the yearly targets should be devised and, where required, coalmines should be re-allocated to achieve the above target.