INDIA’S ENERGY SECURITY: COAL SECTOREnergy security in India revolves around coal sector, which has dominant use in three core sectors i.e. pow er, steel , cement. C oal Ind ustry i tsel f t oo is par t of cor e se ctor. Ap art from this ther e is inconsi stent demand from small sc ale industry involved in br ick manufacturing or ceramics . There is increased imp etus on moving away from coal based techno logies to cleaner and effici ent technologies , but still demand of coal will cont inue to ris e almost in proportion to indu strial growth in India. This is because bas e infrastructure in a ll core sec tors is desi gned fo r coal consum ptio n and still India’ssupply of power and steel doesn’tmatch the demand. Even new capacity additions in th ese sector using clean energies will fa ll short of incremental dem and and agai n u sag e of coal in capacity add ition will be indispensable. India is well placed to fulfill this demand given th ere is adequate tr anspa rent g overnment policy and r eforms in state m onop olized sector. RESERVE S I N INDIA India has 4 th largest reserves of coal and holds abou t 286 billion of world’s some 850 billion of pr oven reserves. Indian coal is class ified in 2 categor ies i .e. cok ing coal and non-cok ing coal. This is a usage based class ification, as coking coal is ess ential for Iro n and s teel indu stry. More, streamlined clas sifi cat ion is on basis of car bon content and stage of for mat ion. Coal is for med by fossi ls of plants, tr ees, bushes etc. which got depo sited in shall ow basins millions of year ago. Later decom position by b acteria c onverts it into peat, wh ich i s generally unviable to mine. After this bio- chemical action ceas es and geo ch emical action becomes dominant. It results in gradual devel opm ent of Lig nite, Bituminous and Anthracite coal. Peat is Im pure, has very low carbon content (in turn calorific value) of about 40%. Lignite, bituminous, anthracite coal has carbon content of 40-60%, 60-80% and 80-90% respectively. Remaining matter in the coal is called volatil e m aterial s uch as m ois tur e, as h content and sulfur con tent. Thes e are graduall y remo ved by metamorphic process i.e. pressure and heat. Bituminou s coal has specia l si gnificance because it co ntains Bi tum en which on heat ing in absence of oxygen is c onv erted into coking coal. This remo ves volatile mat erial in the coal and is further
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Energy security in India revolves around coal sector, which has dominant use in three core sectors
i.e. power, steel, cement. Coal Industry itself too is part of core sector. Apart from this there is
inconsistent demand from small scale industry involved in brick manufacturing or ceramics. There is
increased impetus on moving away from coal based technologies to cleaner and efficient
technologies, but still demand of coal will continue to rise almost in proportion to industrial growth
in India. This is because base infrastructure in all core sectors is designed for coal consumption and
still India’s supply of power and steel doesn’t match the demand. Even new capacity additions in
these sector using clean energies will fall short of incremental demand and again usage of coal in
capacity addition will be indispensable. India is well placed to fulfill this demand given there is
adequate transparent government policy and reforms in state monopolized sector.
RESERVES IN INDIA
India has 4th
largest reserves of coal and holds about 286 billion of world’s some 850 billion of
proven reserves. Indian coal is classified in 2 categories i.e. coking coal and non-coking coal. This is a
usage based classification, as coking coal is essential for Iron and steel industry.
More, streamlined classification is on basis of carbon content and stage of formation. Coal is
formed by fossils of plants, trees, bushes etc. which got deposited in shallow basins millions of year
ago. Later decomposition by bacteria converts it into peat, which is generally unviable to mine.After this bio- chemical action ceases and geo chemical action becomes dominant. It results in
gradual development of Lignite, Bituminous and Anthracite coal. Peat is Impure, has very low
carbon content (in turn calorific value) of about 40%. Lignite, bituminous, anthracite coal has
carbon content of 40-60%, 60-80% and 80-90% respectively. Remaining matter in the coal is called
volatile material such as moisture, ash content and sulfur content. These are gradually removed by
metamorphic process i.e. pressure and heat.
Bituminous coal has special significance because it contains Bitumen which on heating in absence of
oxygen is converted into coking coal. This removes volatile material in the coal and is further
heated to get Coke, which is used in blast furnaces to extract iron from iron ore.
This type of Coking coal is what India lacks, as 88 % of reserves are of Non Coking type and rest 12
% have high Ash content. Indian Coking Coal is cheap and of poor quality and imported Coking coal
is expensive and good quality. Steel industry blends both to secure a moderate cost and quality.
(Coking coal is used to make Pig iron through blast furnace. Other type of iron ‘sponge iron’ doesn’t
need coking coal instead natural gas is used. India is largest manufacturer of sponge iron in the
world. But most of the big corporates in India are dominantly involved in manufacturing of Pig iron)
COAL SECTOR IN INDIA
India’s coal sector is in almost wholly in hands of Coal India Ltd. (CIL, central government PSU).It
produces about 80 % of national production. In nationalization drive of 1970’s coal mining of India
was nationalized by passage of ‘Coal Mines Nationalization Act, 1973′ and CIL was formed. Only a
few captive mines with Tata Steels, Steel Authority of India and Damodar Valley Corporation weremade exception. Latter, this privilege was extended to power (1993), cement and coal to liquid
sector(2006), in addition to iron and steel(1976). For allotment of mines ‘screening committee’ was
formed in 1993 which had representatives from Coal ministry, states and CIL to consider the
New government has given approval to an ordinance, empowering government to take back
mines and reallocating it.
But why an ordinance?
Because this all is being done under sanction Coal Mining Nationalization Act and anything
covered by this law can’t be done by an executive order. Amendment is must for legality.
By this ordinance –
1. Government aims to reallocate blocks to captive users through e-auction. There’ll be no
guarantee of getting same block that a company currently holds.
2. Public sector companies/undertakings will get allocated block as per their need on priority
bases.
3.
Government retains option to open commercial mining to private sector.
4. Proceeds from coal blocks will go to respective states. This step was much needed as Coal rich
states such as Jharkhand, Orissa, Chhattisgarh are also poorest states.
5. Foreign companies will not be eligible.
6. Government has retained option to allot blocks to private players for commercial mining.
Issues Involved:
1. When a block is allocated, then company has to buy land above that block from market. Now
when block will be taken back and allotted to some other user that issue of price of transfer of
that land will arise. FM has ensured that adequate mechanism will be put in place for this
problem
2. Other issue is of whether commercial mining should be opened for private players. There are
diverse opinions for this –
Pro private arguments:
1. Coal India is government monopoly and abuses its position, by keeping prices high , supplying
low grade coal, no redressal of customer grievances. Interestingly, Other government PSU NTPC
dragged CIL to ‘Competition Commission of India’ over the similar issues and Coal India was
fined Rs 1773 crores for ‘Anti- competitive Behaviour’
2. When more precious and expensive resource sector Oil and Natural gas is open for private
sector, why discrimination against Coal sector?
3. Coal India is not able to fulfill demand of the economy and it still makes super profits. Cash and
bank balances of CIL are more than Rs 40000 crores. Our electricity sector is dependent on coal
(70%) and there are frequent coal outages at power plants.4. Coal washing (a process which removes impurities and ash content in coal) facilities (washeries)
of CIL are inefficient and steel manufacturers have to depend increasingly on private washeries.
1. Methane is hazard in Mines. Being poisonous, it can cause serious harm to miners. So it is
better to extract this in advance.
2. Methane is very potent greenhouse gas (about 20 times than CO2). So it shouldn’t be let
escape to environment when it can be captured.
3. It is very viable resource. It has good calorific value and about half the emissions that of coal.
Coal Bed Methane Policy is in place from 1997. 4 rounds of auctions have taken place allocating 33
gas blocks. Commercial production has started in some blocks.
Director General of Hydrocarbons, Coal India Ltd and Ministry of Oil and Petroleum cooperate for
CBM policy. For its extraction well is dug through which water in the coal seam is taken out. It
results in reabsorption of methane in pores and through same well CBM is taken out.
Carbon Sequestering: This is technique for ‘enhanced coal bed methane recovery’. Here CO2 will be
pumped in to coal seam. Coal has better absorption capacity of CO2 and it will result in more
desorption of CBM.
COAL GASIFICATION AND LIQUEFACTION
This gives Methane, Hydrogen, Carbon monoxide by combination of Coal, Water and oxygen. Theseproducts can be used for power generation and industrial processes. Oxygen and water is pumped
in seam which decomposes coal in above products and these are extracted through a well.