INTERVIEW | Coal to stay as main energy source: CIL Chairman Pramod Agarwal

Pramod Agarwal, Chairman of Coal India, the country’s largest coal producer, in an interaction with Rakesh Kumar, talks about the country’s coal availability future and of coal green energy efforts.
Pramod Agarwal, Chairman, Coal India
Pramod Agarwal, Chairman, Coal India

NEW DELHI: India was facing an ‘unprecedented’ coal crisis a few months ago, and now as the situation has eased a bit, the talks of unavailability of coal to power and non-power sectors have died down for now. Pramod Agarwal, Chairman of Coal India, the country’s largest coal producer, in an interaction with Rakesh Kumar, talks about the country’s coal availability situation, future and of coal green energy efforts.

Last year, there were reports of coal shortage in the country post monsoon. What is the situation this year?

The recurrence of such a situation is highly unlikely this year as current coal supply is at a higher growth trajectory and stock position is relatively much more comfortable. Our production has hit a historic high of 253 million tonnes (MT) till August with 21% growth. The 44.6 MT rise in absolute terms in just 5 months and 4 days of the ongoing fiscal outdid the previous best of 44.5 MT of FY16, which was for the entire year. Also, better loading by CIL and logistics management by railways saw the rake loading to power sector going up by 14% during the period. These moves would avert any annual monsoon crisis at power plants.

What is the status of CIL’s coal supply right now?

On the back of the improved production, our supplies also peaked to record levels. Supply to the power sector has grown by nearly 40 MT till the first fortnight of September this fiscal. To a level of 264.7 MT from 224.8 MT of last year. Total offtake has increased to 308 MT, which is a year-on-year (YoY) jump of nearly 24 MT. Pitheads of Coal India are stocked with 29 MT. Coal inventory at power plants was close to 27 MT (including imported coal) with Coal India accounting for a major portion of it. Additionally, 7.6 MT was awaiting shipment at private washery sidings, goods sheds, ports and CIL’s own sidings. With sufficient coal available in the system, there is no cause for shortage apprehension.

How is Coal India gearing up to meet the increased coal demand of thermal power plants with festive season round the corner?

Like I said earlier, if you look at our production and offtake surge to thermal power plants till August, the growth is in the high double digits. Production hike is 21%. Power plants have received 18% more coal than they did last year. Improved production gives us a launching pad to increase our supplies. Adequate coal stocks are within reach. We also have an on-tap coal import pact for 6 MTs in place with a scalable option to 12 MTs.

What is the status of the coal import order placed on Indonesia’s Bara Daya Energi? How much coal has arrived in the country and who all have procured the coal?

Based on the indents and advances received from state gencos and independent power plants, CIL has placed the schedule for delivery of 2.83 lakh tonnes (LTs) of coal from overseas. Of this, three vessels of 2.13 LTs have reached the Indian shores and one vessel carrying 70,000 tonnes is in transit and expected to reach the country’s port by the month-end. Destination is ports on the eastern coast of the country. State gencos of Tamil Nadu and Karnataka have procured the coal so far. Coal imports depend on how the coal demand pans out.

Given that the coal crisis has emerged in the country in the past two years, do you think India will be able to quickly switch to renewable energy for power? Will coal continue to be the main source of power in India for the next decade or so?

Coal outweighs renewables by five-fold in the country’s power generation. It is still long way ahead and continues to fuel India’s energy needs for at least two decades more. Entry of renewables doesn’t portend the end of the road for coal. Renewables complement but can’t compete with coal, at least for now. The switch over will be a gradual and long process. Till then both these fuel sources must co-exist.
In a positive sign renewable energy is, it is steadily expanding. By August-end of this fiscal, the share of renewables in the country’s power generation leapt by 16.6% YOY to 96.26 billion units (BU). In contrast, out of India’s total power generation of 709.36 BU, coal-based generation was 485.49 BU during this period. Of this, 96% or 466.28 BU was generated through domestic coal where the bulk of supplies were from CIL. Coal can’t be erased from the country’s energy canvas abruptly.

What are the new technologies or eco-friendly techniques Coal India is adopting for mining?

Our focus is to be minimally invasive on environment and land, with availability of land being a persistent problem. The focus is on increased deployment of eco-friendly surface miners, which entail blast-free selective mining with minimal damage to the environment. We are planning to strengthen fleet by 50 more in addition to existing 21.

In-pit crushers, already in use, help reduce movement of dumpers, minimising diesel exhaust and lessening air pollution. OB cutting technology curtails noise and air pollution. Reviving environmentally clean underground production, we are adopting a slew of green mining technologies like high wall mining and powered support long wall. Mineable coal assets can be extracted at a low cost with a low gestation period. Paste fill technology is another environment-friendly frontier.

There have been calls for privatisation of coal sector as a solution to India’s coal crisis. A section of people think privatisation would improve performance and efficiency of CIL. What’s your views on the same?

Coal India’s operational efficiency and belt tightening measures in cost of production have already improved over the years. Competition from private players is not a worrying factor for CIL. Their role will be complementary as they replenish additional quantities of domestic coal into the supply chain reducing the import burden. What makes Coal India retain its energy leadership is decades of core competence, large human resource pool of skilled manpower, multi-disciplinary professionals, established infrastructure, streamlined operations, uniform coal quality and reliable timely delivery of supplies. Our mines have a favourable stripping ratio making our coal highly cost-competitive.

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