Coal Scales

by Aakash Ahuja | 26 August 2021

As of April 2020, India’s estimated coal reserves stood at a massive 344 billion tonnes. Yet coal imports continued their upward trend.

Coal imports lie amongst the top 5 Indian imports and the cost to the tune of 25 billion USD. Which is why sometime in 2016, the Indian government identified coal imports as an area that needed addressing to reduce the foreign exchange outflow. The fact that India has 5th largest proven reserves of coal only underscored the strategy.

Yet, coal imports have only grown in the last few years. Let us see why.

The demand has continued to increase since coal forms a very vital part of key industries like electricity generation, steel production, cement production, gasification and liquefaction of synthetic fuels, chemicals amongst others. Infact our energy consumption has been outshining production for years on end. And the gap is only widening.

So, what is pushing the imports up north when India has such huge reserves? Turns out that land acquisition for coal mining, delay in environmental clearances, lack of transportation and storage facilities are some major causes of a slow ramp up in domestic coal production.

At the same time, there is a slowdown in new investments in this segment. The improving economics of renewable energy sources may be a major reason for this phenomenon. Currently, India has about 100 GW of installed capacity from renewables, comprising about 25% of overall installed capacity. The ambitious target for renewables is 450 GW by 2030.

We love our planet and we are all for renewables. The faster our renewables scale up, the quicker the coal imports (on account of energy generation) will reduce. A greener planet will only be the best outcome of this.

References:
1. NSE Energy Business
2. Ministry of Statistics and Programme Implementation
3. Niti Aayog

Originally published at https://blog.prospareto.com.