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Power shortage forces govt to look for ways to boost domestic coal production

Govt pitches unused mines to private players

coal-rep Representational image | Reuters

The mid-summer power shortage in the country has led to a re-think in the place of coal in India’s energy blueprint, with the government aiming to increase coal production, including offering up to 20 unused coal mines to private players for mining.

The aim of the government is to increase domestic coal production to 1.2 billion metric tonnes by next financial year, said Union Coal and Mining Minister Pralhad Joshi at an investors meet on Friday, signalling a shift away from climate goals that included slow phasing out of coal in favour of renewable sources like wind and solar.

One of the reasons for the major shortage of power, that has led to multiple hours of load shedding in many North Indian states over the past fortnight, was that domestic power generating companies fell short of coal. This was mainly because they had not brought international coal as prices were too high, though supply chain issues with transporting domestic coal from mines also played a part. Thermal power is generated by using a mix of domestic and imported coal in many of India’s power plants.

Coal India Ltd. (CIL) will offer its 20 closed/discontinued underground coal mines to the private sector to reopen and bring them into production on revenue sharing model. Addressing the investors at the event, Joshi said the target of coal ministry is to minimise the import of thermal coal and make the country Aatmanirbhar in the sector. Showcasing the opportunities to the investors present at the session, he said, “Not long ago, people used to say the need for coal is going to reduce but we are currently witnessing a surge in coal requirements.”

To get coal cheap, the plan is now to jack up the production of domestic coal. “Extractable reserve in the closed/discontinued coal mines is around 380 million tonnes; 30-40 million tonnes of coal can be easily extracted from the mines, the minister said, adding, “The continuation of mining activities will help in increasing coal supply to thermal power plants while creating employment opportunities for local people.”

The minister said the country is witnessing a revolution in the energy sector. “Government’s efforts for electrification in remote areas, changing fuel choices in transport, and modern lifestyles have led to increased demand for electricity. While we are stressing on developing renewable sources of energy, coal is also going to be one of the major contributors in energy production.”

India has some of the largest coal reserves in the world, though ironically the country continues to be a net importer of fossil fuel. The government believes that since the 20 closed or discontinued mines already have ready infrastructure built in them, restarting them for coal production will be quick and easy, leading to production of desperately needed coal in as soon as a few months.

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