Coali

nIndi
a
2015
Furt
heri
nformat
ion
Formoreinf
ormati
ononotherDepar
tmenti
nit
iat
ivespleaseseet
heDepart
mentswebsi
teat:
www.indust
ry.
gov
.au/
OCE
Formoreinf
ormati
onort
ocommentont hispubl
icati
onpleaseemai
l
:chief
economist
@indust
ry.
gov
.au

Proj
ectTeam
KatePenney
I
anCr onshaw

Acknowl edgements:
Theaut horswouldli
ketoacknowl edgethecontri
buti
onsof:
BruceMur phy,Counsel
lorIndust
ryandSci ence,
NewDel hi
ResouresDi v
isi
on,DepartmentofIndustryandScience
GeoscienceAustrali
a
Mineral
sCounci lofAustr
alia
LauraJones
Thepubl i
cati
onalsobenefitedfr
om v al
uablecomment smadebyot
herst
affmember
s.

Thevi
ewsexpressedi
nthi
spubli
cati
onarethoseoft
heaut
hor
sanddonotnecessar
il
yref
lectt
hoseoft
heAust
ral
i
an
Gover
nmentortheDepar
tmentofIndust
ryandSci
ence.

Commonweal
thofAust
ral
i
a2015

I
SBN:
978-
1-925092-
63-
9[Onl
i
ne]

Thisworkiscopyr
ight.Apartf
rom useunderCopy ri
ghtAct1968,nopartmayber eproducedoralter
edbyanyprocesswithout
pri
orwr i
tt
enpermissi
onf r
om theAustr
ali
anGov ernment.Requestsandinqui
riesconcerningrepr
oducti
onandri
ghtsshouldbe
addressedtochi
efeconomist@indust
ry.
gov.au.Formoreinfor
mat i
ononOf fi
ceoftheChi efEconomistr
esear
chpapersplease
accesstheDepart
ment
swebsi t
eat:www.industr
y.gov.
au/OCE

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v eCommonsLi cence
Withtheexcept i
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icati
oni slicensedunderaCr eati
veCommonsAt tri
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aLicence.
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v eCommonsAt tri
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aliaLi
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TheCommonweal t
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Source: Li
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om t heCommonweal thofAust r
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ibuti
on3.0Aust ral
i
aLicence.The
Commonweal t
hofAust ral
i
adoesnotnecessar il
yendor set hecont entoft hispubli
cati
on.
For
ewor
d
Wor ldener gyconsumpt i
onislikelytobeoneoft hedef iningissuesoft he21stcentury,
particular
ly
thewayi nwhicht heworldsimul t
aneouslyaddr essescl i
mat echangeandaccesst oener gy.Energy
mar ketsar eevolv
ingwithgov ernmentpol i
ciesandt echnol ogicaladv ancementssuppor t
ingr apid
growt hinrenewabl eenergycapaci t
y.Whatisof tenov erlookedi sthatev eni
nrecentyearstheuseof
fossilfuelshasgr ownbyev enmor einaggregat etermst hanr enewabl es.ManyOECDcount ri
eshav e
alreadydel i
veredoncommi t
ment st oreducethei ruseofcoal andoil, butthi
shasbeenmor et han
offsetbyhi gherconsumpt i
oni nhighlypopulatedemer gingeconomi essuchasChi na,I
ndiaandSout h
-EastAsi a.

Manyemer gingeconomiesarest i
l
l i
nvesti
ngincoal-
fi
redelectr
ici
tygener
ati
ontoensurer
eli
able,low-
costelect
ri
cit
yaccesstosuppor tthei
rindust
ri
alexpansionandgrowingpopulat
ions.Whi
l
et hefocus
ofenergyandcoalmarketanalysisinthepastdecadehasbeenonChi na,I
ndi
aisnowemer gingasa
keyconsumer .I
ndi
ast
hermal coal i
mportshaveincr
easedf r
om almostzeroint
he1990stohav ingit
overt
akeJapanast heworld
ssecondl argesti
mpor t
erin2013.

TheCoal i
nIndi
areportisint
endedtocontri
butetot hedebatebyexami ni
ngtheenergypol i
ciesand
regulator
ysetti
ngsthatwilli
nfl
uencetheoutl
ookf orIndi
ascoalindust
ry,
highl
ightt
her oleofcoalin
i
mpr ov
ingenergyaccess,anddiscusshowtechnical advancescanreducegrowthinIndia
scar bon
i
nt ensi
ty.I
ndoingso,iti
dentifi
esopport
uni
ti
esf orAust r
ali
anproducersandminingequi pmentand
technologyservi
cescompani esinmeeti
ngIndia
sgr owingdemand.

Ihi
ghl
yrecommendCoali
nIndi
atoanyoneseeki
ngtodevel
opagr
eat
erunder
standi
ngoft
hef
act
ors
shapi
ngthegr
owthi
nIndi
a
scoaluseovert
helongert
erm.

MarkCull
y
Chi
efEconomist
Depar
tmentofIndust
ryandSci
ence
Cont
ent
s

ABBREVI
ATI
ONSANDACRONYMS 10

EXECUTI
VESUMMARY 12

I
NTRODUCTI
ON 17

I
NDI
ASELECTRI
CITYANDCOALMARKETS 21

St
ruct
ureoft
heI
ndi
anener
gysect
or 21

El
ect
ri
cit
ysect
orst
ruct
ure 23

Coal
mar
ketst
ruct
ure 25

Ener
gyandel
ect
ri
cit
yuse 27

Chal
l
engest
oIndi
a
sel
ect
ri
cit
ygener
ati
on 35

Coal
consumpt
ion 39

Coal
-f
ir
edpl
antper
for
mance 42

Coal
suppl
y 43

Coal
producer
s 48

Tr
anspor
t 49

I
mpor
ts 51

MODIGOVERNMENTPOLI
CIES,
REFORMSANDI
MPACTS 55

Economi
cdev
elopment 56

Ener
gyandel
ect
ri
cit
y 57

Cl
i
mat
echangeandr
enewabl
es 58

Mi
ningandf
uel
suppl
y 60

OUTLOOKFORI
NDI
ASCOALDEMAND,
SUPPLYANDTRADE 63

TheI
EAWor
ldEner
gyOut
look 63

El
ect
ri
cit
ygener
ati
on 64

Wor
ldcoal
consumpt
ion 67

I
ndi
a
scoal
consumpt
ion 68
Wor
ldcoal
product
ion 72

I
ndi
a
scoal
product
ion 73

Chal
l
engest
oIndi
a
spr
oduct
iongr
owt
h 74

I
MPLI
CATI
ONSFORAUSTRALI
A 79

APPENDI
XCOALFUNDAMENTALS 85

Par
tACoal
proper
ti
esandext
ract
ion 85

Coal
mini
ngmet
hods 90

Par
tBCoal
-f
ir
edel
ect
ri
cit
ygener
ati
on 93

Car
boncapt
ureandst
orage 98

Par
tCTr
endsi
nwor
ldcoal
use 99

REFERENCES 101

LI
STOFFI
GURES

Fi
gur
e1.Wor
ldener
gyconsumpt
ion 18

Fi
gur
e2.I
nst
it
uti
onal
str
uct
ureofener
gyadmi
nist
rat
ioni
nIndi
a 23

Fi
gur
e3.St
ruct
ureofI
ndi
a
sel
ect
ri
ci
tysect
or 25

Fi
gur
e4.St
ruct
ureofI
ndi
a
scoal
sect
or 27

Fi
gur
e5.Pr
imar
yener
gydemand 29

Fi
gur
e6.I
ndi
a
sener
gymi
x 30

Fi
gur
e7.El
ect
ri
cit
yuseandeconomi
cdev
elopment
,2012 31

Fi
gur
e8.I
ndi
a
sel
ect
ri
cit
yuseperper
son,
2014 32

Fi
gur
e9.I
ndi
a
spowergr
idr
egi
ons 33

Fi
gur
e10.I
ndi
a
sel
ect
ri
cit
ygener
ati
on 34

Fi
gur
e11.I
ndi
a
sinst
all
edcapaci
tyandgener
ati
on,
2012 34

Fi
gur
e12.Tr
ansmi
ssi
onanddi
str
ibut
ionl
osses,
sel
ect
edcount
ri
es 37

Fi
gur
e13.I
ndi
a
sinst
all
edcoal
-f
ir
edcapaci
ty 40

Fi
gur
e14.I
nst
all
edcoal
-f
ir
edgener
ati
oncapaci
tyofI
ndi
a
sut
il
it
iesbyr
egi
on,
Nov
ember2014 40

Fi
gur
e15.Ef
fect
sofdi
ff
erentt
echnol
ogi
esoncoal
useandcar
bonemi
ssi
ons 42
Fi
gur
e16.I
ndi
a
spr
ovedcoal
reser
vesbyr
egi
on,
2014 44

Fi
gur
e17.I
ndi
a
scoal
product
ionbyr
egi
on,
2013 45

Fi
gur
e18.I
ndi
a
scoal
suppl
yanddemand 46

Fi
gur
e19.I
ndi
a
sther
mal
coal
product
ion 47

Fi
gur
e20.I
ndi
a
scoal
impor
ts 51

Fi
gur
e21.I
ndi
a
sther
mal
coal
impor
ts2013,
bysour
ce 53

Fi
gur
e22.I
ndi
a
sel
ect
ri
cit
ygener
ati
onbysour
ceandCO2i
ntensi
ty,
NewPol
i
ciesScenar
io 65

Fi
gur
e23.I
ndi
a
sel
ect
ri
cit
ygener
ati
oncapaci
tyunderdev
elopment>50MW 67

Fi
gur
e24.Wor
ldcoal
demand,
byscenar
io 68

Fi
gur
e25.I
ndi
a
scoal
demand,
byscenar
io 69

Fi
gur
e26.Wor
ldcoal
impor
ts,
NewPol
i
ciesScenar
io 71

Fi
gur
e27.Shar
eofwor
ldt
her
mal
coal
tradebyt
ype,
NewPol
i
ciesScenar
io 72

Fi
gur
e28.Wor
ldcoal
product
ion,
NewPol
i
ciesScenar
io 73

Fi
gur
e29.I
ndi
a
scoal
product
ion,
bymet
hod 75

Fi
gur
e30.Keycoal
pri
cei
ndi
cat
ors 81

Fi
gur
e31.Pr
oject
edcoal
product
ionbydeposi
tty
pe 83

Fi
gur
e32.Coal
for
mat
ion 86

Fi
gur
e33.Ty
pesofcoal 87

Fi
gur
e34.Open-
cutcoal
mini
ng 91

Fi
gur
e35.Longwal
lmi
ning 92

Fi
gur
e36.Coal
-f
ir
edpowerpl
antschemat
ic 94

Fi
gur
e37.Rel
ati
onshi
pbet
weenCO2emi
ssi
onsandpl
antef
fi
ciency 97

Fi
gur
e38.Geol
ogi
cal
stor
ageofcar
bondi
oxi
de 98

Fi
gur
e39.Wor
ldcoal
consumpt
ion,
ther
mal
andmet
all
urgi
cal 100

LI
STOFTABLES

Tabl
e1.Conv
ersi
onequi
val
ent
sbet
weenuni
tsofener
gy 28

Tabl
e2.I
ndi
ant
her
mal
coal
classi
fi
cat
ion 46
Tabl
e3a.Aust
ral
i
asmet
all
urgi
cal
coal
expor
tsbydest
inat
ion,
Mt 80

Tabl
e3b.Aust
ral
i
ast
her
mal
coal
expor
tsbydest
inat
ion,
Mt 80

Tabl
e4.Ef
fectofpl
antef
fi
ciencyoncar
bonemi
ssi
ons 95

Tabl
e5.Ty
pical
pressur
eandt
emper
atur
eranges,
byt
echnol
ogyt
ype 96

LI
STOFBOXES

Box1.Ener
gymeasur
ement 27

Box2.Coal
-f
ir
edel
ect
ri
cit
ygener
ati
ont
echnol
ogi
es 41

Box3:
Coal
transpor
tat
ion 50

Box4:
Indi
a
sFi
veYearPl
ans 58

Box5.I
ndi
ani
nvest
menti
ntheGal
i
leeBasi
n 82
Abbr
evi
ati
onsandacr
ony
ms
AUSC adv
ancedul
tr
a-super
cri
ti
cal
(coal
plant
)

CCS car
boncapt
ureandst
orage

CI
L Coal
Indi
aLi
mit
ed

COP conf
erenceofpar
ti
es

CPS cur
rentpol
i
ciesscenar
io

CSP concent
rat
edsol
arpower

DWT deadwei
ghtt
onnes

FDI f
orei
gndi
recti
nvest
ment

FYP f
ive-
yearpl
an

Gcal gi
gacal
ori
e

GDP gr
ossdomest
icpr
oduct

GW gi
gawat
t

GWh gi
gawat
thour

HELE hi
ghef
fi
ciency
,lowemi
ssi
ons

HHV hi
gherheat
ingv
alue

I
EA I
nter
nat
ional
Ener
gyAgency

I
GCC i
ntegr
atedgasi
fi
cat
ioncombi
nedcy
cle

I
NDC i
ntendednat
ional
l
ydet
ermi
nedcont
ri
but
ion

kcal ki
l
ocal
ori
e

kWh ki
l
owat
thour

MBt
u mi
l
li
onBr
it
isht
her
mal
uni
ts

METS mi
ningequi
pment
,technol
ogyandser
vices

MNRE Mi
nist
ryofNewandRenewabl
eEner
gy

MOC Mi
nist
ryofCoal

MOP Mi
nist
ryofPower

MOPNG Mi
nist
ryofPet
rol
eum andNat
ural
Gas
Mt
ce mi
l
li
ont
onnesofcoal
equi
val
ent

Mt
oe mi
l
li
ont
onnesofoi
lequi
val
ent

MW megawat
t

NEEPCO Nor
thEast
ernEl
ect
ri
cPowerCor
por
ati
on

NHPC Nat
ional
Hydr
oel
ect
ri
cPowerCor
por
ati
on

NI
TI Nat
ional
Inst
it
uti
onf
orTr
ansf
ormi
ngI
ndi
a

NPS newpol
i
ciesscenar
io

NTPC Nat
ional
Ther
mal
PowerCor
por
ati
on

OECD Or
gani
sat
ionf
orEconomi
cCo-
oper
ati
onandDev
elopment

PCC pul
ver
isedcoal
combust
ion

PSU publ
i
csect
orunder
taki
ng

PV phot
ovol
tai
c

ROM r
unofmi
ne

SCCL Si
ngar
eni
Col
l
ier
iesCompanyLi
mit
ed

TJ t
eraj
oul
e

TWh t
erawat
thour

UHV usef
ulheat
ingv
alue

UMPP ul
tr
amegapowerpl
ant

UNFCC Uni
tedNat
ionsFr
amewor
kConv
ent
iononCl
i
mat
eChange

USC ul
tr
a-super
cri
ti
cal

WEO wor
ldener
gyout
look
Execut
iveSummar
y
Indiaist
heworld
sthi
rdlargestenergyconsumer,anditsenergyuseisprojectedtogrowat
ar api
dpacesupport
edbyeconomi cdevelopment,ur
banisat
ion,i
mpr ovedelectr
ici
tyaccess
andanexpandingmanuf actur
ingbase.By2040, t
heInternat
ionalEnergyAgencyprojects
thatIndi
a
senergyconsumpt i
onwi l
lbemor ethanOECDEur opecombi ned,andappr oachi
ng
thatoftheUni
tedStates.

Indiasenergysectori sgov ernedbyacompl exinst

ituti
onalstr
uctur
ethatr equi
resheav y
i
nt eract
ionacrossMi nistri
esandj uri
sdict
ions.Accordingly,
poli
cydevelopmentort he
i
nt roducti
onofref ormst othesectorcanbedi ffi
cul
t, whichhascontr
ibutedt oongoing
weaknessi nener gypol icyandpr ovisi
on,i
ncludinginadequateenergydeliv
er yi
nfr
ast r
uctur
e
andcont rolandco- ordinationissues.

Tomeeti tsgrowingener gyrequi r

ements,Indiaisdevelopingall avai
labletechnology
options.TheGov er
nmenthassetambi ti
oust arget
st oincreaset heinstall
edcapaci tyof
renewablet echnologiesto175gi gawatt
sin2022( f
rom around65gi gawat tsinear l
y2015).
I
ndiai salsorapidlyexpandingi tscoal-
fi
redelectri
cit
ygener ati
oncapaci t
y,witharound113
gigawattsofnewcapaci t
yalreadyunderconst ructi
onorappr ov edinaddi t
iontot he205
gigawattsofexi sti
ngcapacity .I
n2012, coal-
fir
edelectri
cityaccount edfor60percentof
I
ndiasinstall
edcapaci t
yand71percentofi tselectri
cit
ygener ation.Giventhei nvestment
underwayi nthesect or,coalwi l
lremainakeyi nputintoIndia
sel ectr
ici
tygener ati
on.

India
scoal-fi
redel
ectr
ici
tygener ati
oncapacit
yi slargelybasedonsubcr i
ti
cal t
echnology
andi sdesignedtousedomest icall
y-sour
cedcoal .Althoughsubcr i
ti
caltechnologyis
relati
vel
ylowcostcompar edwi thotheravai
lablet echnologies,itusesmor ecoaland
gener at
esmor eCO2emi ssions.Fr om 2017,al
l newcoal -fi
redpr oj
ectsdev elopedinIndiaare
requiredtousesupercri
ti
cal technologyorbetter.Theset echnologiesoper ateatahigher
effici
encythansubcri
ti
cal plantsandassuchusel esscoal andgener at
ef eweremi ssions.
Plantsusingthesetechnologiesr unmor eoptimallyusinghi gh-energy,l
owashcoal .India
s
coal r
esourcesaretypi
call
yl ow- energyandhighash.

Indi
aisthewor l
dsthi
rdl argestproducerofthermalcoal.Whil
epr oductionhasincr
eased
overthepastfewdecades, thepaceofgr owthhasbeeni nsuff
ici
entt omeetdemand.
Consequently
,Indiahasbecomemor erel
iantonimportedcoal(thermal coali
mports
i
ncreasedfrom 10mi l
liont onnesin2000t o142mi ll
iontonnesin2013) .MostofIndia
s
ther
mal coali
mpor tshav ebeensour cedf r
om Indonesi
abecauseofi tsr el
ati
vel
ylow-cost
comparedwi t
hot heri
nt ernati
onall
ytradedcoal;it
sspecifi
cati
onsmor eclosel
ymatch
Indi
a
sdomest iccoal;andsev er
alIndiancompaniesownI ndonesianmi nes.

Indi
asinvestmenti nnewcoal -f
iredgener at
ioncapacitywi l
lsupportani ncreasei ncoaluse.
Indi
ahaspl anstoalmostdoubl ei t
spr oducti
ont oonebi l
l
iont onnesby2020t omeeti t
s
growingr equir
ement s.Howev er,growthi nproducti
onislikelytobeconst rainedby
diff
icult
iesinaccessingland,lengt hyapprovalprocesses,inadequatet r
anspor tat
ion
systems, andpoorpr oducti
vit
yl argelystemmi ngfrom theuseofout dat edpr oducti
on
techniques.Further,t
heincreaseduseofadv ancedcoal-f
iredgenerationtechnol ogieswil
l
requirehighqualit
ycoal t
hatisnotav ail
ableinlargequantiti
esinIndia.Asar esult,
Indi
ais
l
ikelytocont i
nuet orel
yonimpor ts.
Theex pansi
oninIndia
scoal usepresentssomeoppor tunit
iesfortheAustr ali
anindustry,
whichisnotcurrent
lyal argesupplierofthermal coalt
oI ndi
a.Aust r
aliahasl ar
gedeposi tsof
high-
energy,l
owashcoal thatissuitabl
ef oruseinadvancedcoal -
generati
ont echnologies.
Ther ol
loutofadvancedcoal generati
ontechnologiesinIndiapresentsasi gnifi
cantlong
term opport
uni
tyforcoal producersinAust ral
iaandelsewher e.Inadditi
on,India
sdesiret o
i
mpr ovetheproducti
vityandsaf etyofdomest i
ccoalminest hroughadv ancedt echnology
maypr esentanoppor t
unityforAust r
ali
a
smi ni
ngequipment ,technologyandser vices
sector.
I
ntr
oduct
ion
Ithasbeencl earforsomet i
met hatwor ldener gyconsumpt iongr owthhasbeendr i
venby
non-OECDcount ri
es,par t
icularlyinAsi a( f
igure1).Muchat tentionhasunder standablybeen
focusedonChi nagivent hesi zeofi tsrecenteconomi cexpansi onandassoci atedincrease
i
nener gyrequirement s.Howev er,asChi naseconomi cgrowt hslows, andwi t
hitgrowt hin
energyandcoal use,thef ocusi snowr ebal anci
ngtowar dsot heremer gingenergymar kets
thatar ehighlypopulat edandposi ti
onedf oraper i
odofeconomi cgrowt h.I
ndiaisalikely
candidatet obet henextmai ndr iverofwor ldenergyconsumpt ionasi tmeetsbot hoft hese
cri
teria.I
thasapopul ati
onofar ound1. 3bi l
li
onpeople, manyofwhom st i
ll
donothav e
accesst oel ectri
cit
y,andi sal readyi nvesti
ngheav il
ytoaddr esst heissuesinitselectri
city
mar kets.Fur t
hermor e,it
seconomyi sstartingtoexhibitrobustgr owthrateswi t
hthe
recentlyelectedModi gov ernmentpr ovi
dingasubst antiall
if
tinbusi nesssentiment.

Fi
gur
e1:Wor
ldener
gyconsumpt
ion

Sour
ce:I
EA2014d.

Indi
asener gyconsumpt ionhasgr ownsubst anti
allyov erthepastf or
tyy ear s,withthe
averagegr owt hratei ncreasi
ngint henewmi ll
ennium.Robusteconomi cgr owt h,an
expandi ngmi ddlecl assandgr owi ngpopulati
onhav eunder pi
nnedt hi
sgr owt h,allofwhi ch
aretrendst hatareunl i
kelytochangei ntheneart erm.Nev ert
heless,thechal l
engesf aci
ng
Indi
asener gysect orar eimmense.Despi tetheext endedper i
odofhi ghgr owt hinener gy
consumpt i
on, energypov er
tyremai nsasignifi
cantissuei nIndia.TheI nternat i
onal Energy
Agency( I
EA)est i
mat esthat304mi ll
i
onpeopl e(around13t imesAust rali
a stotal populati
on)
areunabl etoaccessanyel ectri
cityandmanyoft hoset hathaveaccessexper iencer egular
supplydi sr
upt i
onst hatnecessi t
ateexpensi v
edi esel back-upgener at
or s(IEA2014c) .To
date,planst odev elopnewel ect
ricit
ygenerationcapaci tyhavef al
lenshor toft he
governmentsambit
ionsandt ar
gets.Despi
tetheseshortf
all
s,t
herehasstil
lbeen
substanti
algrowt
hinI ndi
a
selectr
ici
tyconsumpt i
onandthishaspr i
mari
l
ybeenmett hrough
i
ncreaseduseofcoal .Eventhoughithassubstanti
alcoalr
esources,I
ndi
ascoalmining
sectorhasbeenchallengedbythegrowthindemandandt hedomest i
csupplyresponsehas
notkeptup.

I
ndiaselect
rici
tymar ketsandthecoal miningindustryi
nIndi
aareheav i
lyregulatedand
mostlymanagedbypubl i
cinsti
tut
ionsandbot hexper i
encesyst
emi csuppl
ydi sruptions.The
l
argescal eblackoutsinnorther
nandeast ernIndiainJuly2012,whenupt o600mi ll
ion
peoplelostelectr
icit
yaccess,epit
omi sedtheongoi ngweaknessesinenergypol i
cyand
del
ivery
, i
ncludinglackofgenerati
onandt ransmi ssi
oncapacit
y,contr
olandco- ordinati
on
i
ssues,andi nadequat eener
gysuppl y
.

Coalisexpectedtoplayamaj orrol
einaddressi
ngsomeofI ndia
senergychallenges.
Refl
ecti
ngi t
slargedomesticreserv
es,coali
salreadyamajorcomponentofI ndiasenergy
supply,
accountingfor45percentofitstot
alenergymix,60percentofinstal
ledelectr
icit
y
capacit
yand71percentofel ectri
cit
ygenerati
onin2012.Giventhepl
ansf orinvestmentin
newcoal -
fi
redcapacity
,coalwil
lconti
nuetobeamaj orcomponentofIndia
sener gymix
overthelongerter
m.

Oneoft hekeychall
engesf acingIndiaisbalancingtheener gyneedsofi tspopulationand
growi ngeconomywi ththegl obal mov etoreducecar bonemi ssions.Whi l
einvestmenti n
renewabl eenergysourcesi sundoubt edlyont heriseinIndi
a, thereisev engreater
i
nv estmentalreadyunder wayi ntocoal-f
ir
edel ectr
icit
ygener ationwhi chindi
catest hat
India
scoal consumptioni slikelyt
or i
seforsomet ime.Whatr emai nstobeseeni stherole
HighEner gy,LowEmi ssionst echnologies(HELE) ,suchasul tra-supercri
ti
calgener at
ors,and
carboncapt ureandstoragewi llpl
ayinIndiasenergymar kets.Bot hhav ethepot enti
alto
prov i
designif
icantr
educt i
onsi ncarbonemi ssions,butcomewi thhighercapit
alcost s.

Thisrepor tfocusesont het rends,pol ici

esandmar ketst ructur esthatareshapingIndia
s
electr
icityandcoal miningindust ri
esbot hint heshor tandl ongt er
m.I tdiscussesthelong
term out l
ookf orIndia
scoal consumpt i
on,productionandt radebyanal ysingthemar ket
struct
ur es,regulatoryenv i
ronment , electri
cit
yconsumpt iont rendsandi nv est
mentt hat
underpint hem.Thef ir
stchapt erpr ov i
desanov erviewofI ndi asel
ectri
cit
yandcoal
i
ndust ri
esi ncludingther ol
eofgov er nment ,mar ketstruct uresandr egi
onal consumpt i
on
patterns.Thesecondchapt erdiscussescur rentpoliciesandr efor
mst hatar eunderwaywith
anassessmentoft heeffect sthatthesemayhav eonI ndiascoal consumpt i
onand
production.

Chapterthreerevi
ewst heIEAout l
ookf orIndia
scoal demandandsuppl yinthe2014edi ti
on
oftheWor l
dEnergyOut l
ookincludingsomeoft hechallengestomeet ingplannedt argets.
Therepor tconcl
udeswi t
hadi scussi onont hei
mplicati
onsf orAustral
iaasamaj orcoal
exporterandpotential
investmentdest ination.Thi
sr eportalsoincl
udesaser iesofappendi x
thatprovi
desomebackgr oundinfor mat i
ononcoal asacommodi t
y,it
susei nelect
r i
cit
y
generati
on, HELEtechnologi
es,mi ningmet hodsusedt oextractcoalandtrendsi nwor ld
coaluseatt heendoft hereport
.
I
ndi
asel
ect
ri
cit
yandcoalmar
ket
s
Indi
aisal ar
geener gyconsumerandpr oducer,
wi t
hadi verseconsumerbase.Whi l
eits
energyusehasi ncreasedrapidl
yov erthepastfewdecades, percapi
taenergyuseinIndia
remainswell bel
owOECDcount riesandmanyot heremer gi
ngeconomi es.Coalhasplayeda
vit
alrol
einmeet i
ngIndia
sgrowingener gyneedsov erthepastf ewdecades.Eventhough
Indi
aisamaj orcoalproducerit
sout puthasnotkeptpacewi thdemandandt heyhave
becomei ncreasingl
yreli
antonwor ldmar ket
stosat i
sfytheirrequi
rements.

Ther ei
sahighlev
el ofgovernmentpart
ici
pati
onintheenergymarket
, i
ncludi
ngthe
dev el
opmentofpoli
cies,r
esearchanddevelopment,r
egulat
ionandprovisi
onofenergy
throughPubli
cSectorUnder t
aki
ngs.Al
thoughmar ket
-basedmechani
smsar esl
owlybei
ng
i
nt r
oducedandthereisincreasi
ngpri
vatesectori
nvol
v ement,
thegov
er nmentremainsakey
playerint
heprovi
sionofener gy
.

Thestr
uctureofIndiasenergysect
oriscompl ex,r
ely
ingonahi ghlevel
ofco-or
dinat
ionand
co-
operati
onbet weenf i
vemaj orMi
nistri
es.Thisi
sfurthercompl i
catedthr
oughthe
ext
ensi
v ei
nteracti
onbet weencentr
al andstate-
basedgov ernmentagencies.Asaresul
tof
thi
scomplexit
y ,
mar ketoperati
onandr efor
mscanbedi ff
icult
.

St
ruct
ureoft
heI
ndi
anener
gysect
or
TheI ndiangov ernmenti sthepr incipalagenti nit
sener gymar ketwi thresponsi bili
tyforbot
h
setti
ngener gypol i
ciesandadmi nisteri
ngt hepubliccompani est hatproduceener gy.The
i
nst i
tutionalset -
upf orIndiasener gysectori sacompl exst ructureoff ivemaj orMi ni
stri
es
thatar edirectl
yi nvolvedinpol i
cymaki ng,andhav er esponsibili
tyf orener gypr ovisi
on
(fi
gure2) .Ov erseeingt heseMi nistri
esi stheNat i
onal Insti
tuti
onf orTransf ormi ngIndia
(NITI),whichr eplacedt hePl anningCommi ssioninearly2015.TheNI TIi sdesi gnedt o
becomeasour ceofr elevantstrategi candt echni
cal advicetot hecent ral andst ate
gover nment swi thresponsi bil
it
iesacr osst hespectrum ofkeypol i
cyel ement s.Thef ormer
topdownmodel ofthePl anningCommi ssionisintendedt ober eplacedwi thamor e
consul tat
ive,co-ordinatingrole,especi al
lywher eissuescr osscent ral
-stateboundar i
es.

Thr eemajorMi nist r

ies;Coal ,PowerandNewandRenewabl eEnergy ,wer ecreat edf r
om a
singleEnergyMi ni strymor et han20y ear sago.Toi mprov eco- or
dinationanddel i
verbet t
er
outcomes, thethr eeMi nistri
esnowr epor ttoasi ngleMi nister,Pi
yushGoy al
,followingt he
changei ngov ernmenti n2014.TheMi nistryofCoal (
MOC)haspr imar ycar r
iageov er
polici
esandst r
ategi esf orcoal product ionanddev elopment .TheMOChasani nterestin
threePublicSect orUnder t
akings( PSUs)i nv ol
v edincoal production.TheMi nistryofPower
(MOP)i sresponsi blef orpl anning,impl ement ingandmoni t
oringpolicyi nthepowersect or.
TheMOPov erseessi xPSUsandt wost atut or
yaut hori
ti
es.TheMi nistryofNewand
Renewabl eEner gy( MNRE)t akest hel eadonpol i
cydev elopmentandpr omot i
onofnewand
renewableener gy .TheMNREhassev er alresearchanddev elopmenti nst i
tutest hatare
i
nv olvedi
nt esti
nganddemonst r
atingv ariousr enewablet echnologies; andt heident i
ficati
on
ofpot ent
ialsit
esf ordev elopment( IEA2012) .

TheMinist
ryofPetr
oleum andNaturalGas(MOPNG)ov er
seesIndia
soi
l andgassect
ors
i
ncludi
ngexplor
ati
onandpr oduct
ion,r
efi
ning,
dist
ri
but
ion,market
ing,pr
icing,
andtr
ade.The
MOPNGhasf our
teenPSUst hatproduceoi
landgas,andei
ghtstatut
orybodi
es.The
governmenthassoleresponsi
bil
it
yfornucl
earpowerundert
heI ndi
anConsti
tut
ion.The
DepartmentofAtomicEnergyhasf i
vePSUs,dedi
cat
edtonuclearenergypr
oducti
onand
research(
IEA2012).

Fi
gur
e2:I
nst
it
uti
onal
str
uct
ureofener
gyadmi
nist
rat
ioni
nIndi
a

Sour
ce:basedonI
EA2012,
p.18.

El
ect
ri
cit
ysect
orst
ruct
ure
Undert heI ndianConst i
tution,poweri sashar edr esponsi bili
tybetweencent ralandstate
gover nment s(f i
gur e3).Thecent ral governmenthasakeyr oleinelect r
ici
typlanni
ng,andt he
formul ation, i
mpl ement ationandmoni tori
ngofpol i
cyi nt hesect orthroughtheMOP.I talso
providesanov ersightandcoor di
nat i
onr olefort wost atutor ybodies( Centr
alElectr
ici
ty
Author ityandBur eauofEner gyEf fi
ci ency)andsi xst ate-ownedut i
li
ties.Theseagencies
covert her mal andhy dropowergener ati
on,transmi ssion, distr
ibuti
onandf i
nancing.The
stategov ernment sar ealsoimpor tantt otheI ndianel ectrici
tysectorasst ate-ownedut i
l
ities
control al argeshar eofthet ransmi ssionanddi stri
but i
onnet work(IEA2012) .Inpract
ice,
mostoft hewor ki ntheelectricit
ysect orisunder t
akenbyt hestates,wi t
hsomeengagement
andsuppor tfrom t hecent ralgov ernment( IEA2014b) .

Gov er
nment-owneduti
li
ti
eshav eakeyroleinsupply
ingelectr
ici
tyinI
ndia,account
ingfor
around70percentofIndiast
otalel
ect
ri
citygenerat
ion.Pri
vateuti
li
ti
esaccountforthe
remaining30percentofelect
ri
cit
ygenerati
onandar eslowlyplayi
ngalargerrol
ein
electr
ici
typr
ovisi
on.

Keygov
ernmentpowercompani
es

TheNati
onalThermalPowerCorporat
ion(
NTPC)i
sthelar
gestpowercompanyinIndia.I
t
hasdi
ver
sif
iedfrom i
stradi
ti
onalbaseoft
her
malasset
stoincl
udehydropower
,nuclearand
renewabl efacil
i
ties.I
toperates33powerpl ants,withacombinedcapaci tyof38gi gawatt
s.
Almost90percentofi tsi
nstall
edcapaci t
yiscoal-fi
red.Whil
eNTPCi sgov ernment-ownedit
hasMahar atnastatus,whichgivesi tgreaterautonomyf rom t
hecentr algovernmentin
decisionmaki ng( NTPC2015) .Compani eswi t
hMahar at
nastatuscani ncurcapit
al
expendi tur
ewi t
houtanyv alueceil
ing; enterint
ojoint-v
entur
esorst r
ategicalli
ances;
restructuretheorganisati
onincludingopeni ngof f
icesabroad;andraisedebtf rom capi
tal
mar kets.

TheNor t
hEaster
nElectri
cPowerCorporati
on(NEEPCO)wasestabl
ishedtodevel
op
el
ectri
cit
ycapaci
tyi
nt henor
theastofIndi
a.NEEPCOhas1130megawat t
sofinst
all
ed
capaci
tyandaccountsforal
mosthalfoftheinst
all
edcapaci
tyi
ntheregi
on(NEEPCO2015)
.

TheNat i
onalHydroel
ect
ricPowerCorporati
on(NHPC)isresponsi
blefordevel
oping
hydropower,
tidal
,geot
hermalandwind-basedelect
ri
cit
ycapaci
ty.I
tcurrent
lyhas20pl
ant
s
withacombinedcapacityof6500megawat ts(
NHPC2015) .

Keypr
ivat
epowercompani
es

Thepr i
vatesect
orisinvol
vedi nthegenerati
on,t
r ansmi
ssionanddi st
ri
butionofel ect
ri
cit
y.
Howev er,t
heyaccountforar el
ativ
elysmallshareoftheov er
allmarket.Adani Poweristhe
l
argestprivat
ether
mal powerpr oduceri
nI ndi
a.Ithasaninstall
edcapacityofar ound10440
megawat tsandownsI ndi
aslargestpowerplant,Mundra,i
nGuj ur
at.Thepl anthasnine
generatoruni
tswit
hacombi nedcapacityofaround4620megawat ts(Adani Power2015) .

TataPoweri sIndi
a
slargesti
ntegratedpowercompany .Itwasresponsi
blefordevel
opi
ng
I
ndiasfi
rst4000megawat tUlt
raMegaPowerPr ojectusi
ngsupercri
ti
caltechnol
ogyin
Gujurat
.Tat aPowerhasat ot
alinstal
ledcapaci
tyofaround8750megawat t
sbasedon
thermal,
hy dro,
sol
arandwi ndtechnologi
es(TataPower2015) .

El
ectri
citytar
iff
schargedbycentral
governmentcont roll
edutili
ti
esandindependentpower
producersthatdeli
verpowertomorethanonest at
ear eregulat
edbytheCent ralEl
ectr
ici
ty
RegulatoryCommi ssi
on(CERC).CERCalsoissueslicencesf orcompaniestransmitt
ing
el
ectri
cityacrossstat
esandactsasanar bi
trat
orindi sputesbetweencompani es.Stat
e
El
ectri
cityRegulat
oryCommi ssi
onsareresponsibl
ef orsetti
ngt ar
if
fsf
orstate-owned
ut
ili
ti
es( I
EA2012) .
Fi
gur
e3:St
ruct
ureofI
ndi
asel
ect
ri
cit
ysect
or

Sour
ce:I
EA2012,
p.33.

Not
e:UMPPi
sanul
tr
a-megapowerpr
oject
.Theyar
elar
gepr
oject
susi
ngsuper
cri
ti
cal
t
echnol
ogy
,wi
thacapaci
tyofar
ound4000megawat
tseach.

Coalmar
ketst
ruct
ure
Indiasdomest iccoal i
ndustryi sprimar ilygovernmentownedandco- ordi
nated.Thecentral
gov ernmentpl aysakeyr olei nIndiascoal pol
icydev elopmentandal soownst hepublic
compani esthataccountf ormostofI ndi a
scoal production(fi
gure4) .TheMOCi s
responsi bl
efort heformulationofpol ici
esandst rategiesforcoal explorati
on,project
appr ovalsandot herissuesr elati
ngt ot hepr oduction,supply,dist
ributionandpr i
cingofcoal
i
nI ndi a(MOC2014a) .TheCoal Cont rollerisasubor dinateofficeoft heMOCwhi chsets
standar dsandpr oceduresf orassessi ngcoal quality,i
nspectscoal qualit
y,perf
ormsan
arbitratorr
oleint heeventofqual i
tydi sputes,issuespr ojectapprov al
s, col
lect
sexci se
dutiesandmanagescoal -rel
at edst ati
stics( CoalCont r
oller2015).
Coal producti
oni nIndiahasbeencont roll
edbyt hecent ralgov ernmentf oll
owi ngt he
nationali
sati
onofI ndiascoal minesi ntheear ly1970s.Al lmet all
urgical coal mi neswere
nationali
sedin197172andt hermal coal minesi n1973.Coal IndiaLimi ted(CI L)was
formedasahol di
ngcompanyi n1975, i
ncorpor atingt hestate-ownedcompani est hatwere
createdf ol
l
owi ngthenat i
onali
sationofI ndia
scoal assets.Sincei t
sincept i
on, threenew
state-ownedsubsi diari
eswer edev elopedt or educet headmi ni
strati
vebur denofcompani es
spanni ngalargegeogr aphicarea.CI Lnowhasei ghtsubsi diari
esBhar atCoki ngCoal
Limited,CentralCoal f
ieldsLimited, East er
nCoal fi
eldsLi mited,West ernCoal fi
eldsLi mit
ed,
Sout hEasternCoal f
ieldsLimited, Nor thernCoal f i
eldsLimi ted,Mahanadi CoalfieldsLimit
ed
andt heCent r
al MinePl anningandDesi gnInst i
tute( MOC2014b) .TheI ndi anGov ernment
divesteda10percentshar einCI Li n2010andi ntendst osel lafurther10percentshar e
during2015( MOC2014c; I
EA2012; Kazmi n2015) .

CILaccount sforaround80percentofI ndia

stotalcoalproducti
on.TheMOCi sresponsibl
e
forsettingproducti
ontarget
sandot herper formanceindicatorsforCILthroughadedi cated
Memor andum ofUnderstanding.CILspr oducti
ont ar
getforthe201516f inanci
alyear(Apri
l
2015t oMar ch2016)hasbeensetat550mi ll
i
ont onnes,up8.5percentf rom theprevious
yearstarget
.Intheprevi
ousf iscal
y earCI Lproduced494mi ll
i
ont onnes,3percentbel owits
targetof507mi l
li
ontonnes(Bahuguna2015) .Toachievet henewt arget
,CI Lwil
lneedt o
produceanext r
a56mi ll
iontonnesdur ingt he201516f inancial
y ear
.

Alt
hought hecentral
governmenthaspr i
marycarr
iageoverIndi
ascoalsector,st
ate
governmentsretai
nsomei nfluenceoverdev
elopmentsthr
oughappr ov
al ofmi ni
ngli
cences
andleases,whicharerequir
edbef or
etheMOCgr antsfi
nalproj
ectapproval,androyal
ty
rat
es( I
EA2012) .

Fi
gur
e4:St
ruct
ureofI
ndi
ascoal
sect
or

Sour
ces:I
EA2012,
p.48;
MOC2014a.

Ener
gyandel
ect
ri
cit
yuse
Indi
aisthewor ld
sthir
dlar
gestenergyuser.I
n2012, Indi
astotalpri
maryenergydemand
was788mi l
li
ont onnesofoi
lequiv
alent(
Mt oe),
whi chwasgr eaterthanRussia,wel
li
n
excessofanyI EAmemberexceptt heUnitedStates,andaroundsi xti
mest hatofAust
ral
i
a
(fi
gure5).I
ndiaspri
maryenergydemandi n2012wasr oughl
yequal t
oChinasener
gy
consumpt
ioni
n1990.

Box1.Ener
gymeasur
ement

Ther eareaf ewbasi cconceptsthatar eusedext ensi

vel
yi ndiscussionsaboutener gyand
willassistinunderstandingdevel
opment sinwor l
denergymar ket
s.Ener gycanbel oosely
definedt oincludeheat,powerandf uels,suchasoi l
,gasandcoal .Inthecont extofthis
repor t
,energyuser efer
st othedi
rectuseofcr udeenergyt hathasntbeentransfor
medi nto
anot herenergysour cesuchaselectrici
tyorrefinedpetroleum.Electri
cit
ycanbepr oduced
usingnat uralenergysourcessuchashy dro,solarandwi nd,thr
ought heheatofnucl ear
fi
ssion, geothermalorsol art
her
mal, andt heburningofcombust i
blefuelssuchascoal ,oi
l
andgas.

Fuels,suchascoal ,oilandgas, aremeasuredf ortradingandmoni t

oringprocessest hat
produceoruset hem.Thesecanbeei therphysicalunitsforsol i
dfuels(tonnesorki l
ograms)
orvolumeuni tsforliquids(cubicmetresorli
tr
es) .Theseuni tscanbeconv ertedintoenergy
unit
st of acil
i
tatetheaggr egati
onofdiff
erentfuelsindi f
ferentphysicalstat
es.Themost
commonl yusedener gyuni tsaremil
li
ontonnesofoi lequivalent(
Mt oe),j
oules,calori
es,
Brit
isht hermal unit
s( Btu)andmi l
li
ontonnesofcoal equivalent(Mtce).Theconv ersion
equivalentsareexpr essedi ntable1.

Sour
ce:I
EA2005.

Theconv er
sionofafuelfr
om aphysicalorvolumeuni tt
oanenergyunitrequir
esa
conversi
onfactort
hatexpressest
heheatobt ainedf r
om oneuni
tofthefuel.Thi
s
conversi
onfactori
srefer
redtoasitscal
orif
icv alue.Thequal
it
yoffuel
sandhencet hei
r
cal
orif
icval
uesv ar
iesacr
ossdepositsandcount ries.

El
ect
ri
calcapaci
tyi
sthemaxi
mum el
ect
ri
cit
yout
putt
hatcanbegener
atedatapl
antunder
certaincondit
ions.Capacit
yi stypical
lymeasuredinmulti
plesofWat ts.Thechoiceof
mul ti
ple(ki
l
o,mega, giga,t
era)dependsont hesizeofthepl ant.El
ectri
cit
ygenerati
onand
usei stheamountofel ectr
icit
ypr oducedorconsumedov eracer tai
nper i
odofti
me.
Gener ati
onandconsumpt i
onar emeasur edasamul ti
pleofwat thours.Manyelectr
ici
ty
plantsdonotoper ateatfullcapacityall
theti
me, out
putisvariedbasedonoper ati
ng
conditions,
inputcostsandr equirements(I
EA2005) .

Fi
gur
e5:Pr
imar
yener
gydemand

Sour
ce:I
EA2014d.

Indiasenergydemandhasr oughl
yquadrupl
edsince1980, andincr
easedtwoandahal f
timessi nce1990,dri
venbybotheconomicandpopul ati
ongrowth.Thepowersectorhas
beent hemaincontr
ibut
ortotheexpansi
oninener gyuse,i
ncreasi
ngit
sshareoftotal
primar yenergydemandfrom 23percentin1990to39percenti n2012.Thebuil
ding( 27per
cent )andindustr
y(22percent)sect
orsaretheothermajorenergyconsumingact
ivit
iesin
India( I
EA2014a).

Between1990and2012t hecompositi
onofIndi
asener
gymi xhaschangedsharply
,with
tr
aditi
onalbiomass(suchaswoodusedi nheati
ngandcooking)inparti
cularl
osi
ngshare
(f
igure6).Theshareofcoalincr
easedtoalmost45percentin2012,upfrom 33percentin
1990.Thel owcostandreli
abil
it
yofcoal,
aswellasit
srelat
iveabundanceinIndi
a,madeita
prefer
redenergysourcei
nIndia.
Fi
gur
e6:I
ndi
asener
gymi
x

Sour
ce:I
EA2014d.

Ener gysecur ityinIndiahasbeeni nt erpretedasadr i

v et owardsmaxi mum l ev elsofsel f
-
sufficiency ,usingdomest icenergyr esour cesofhy drocar bons, bioener gy,otherr enewabl es,
andev ent hor i
um ( foruseinnuclearpowergener at
ion) .Thishasl edt oanov er-reli
anceon
gov ernment -ownedmonopol i
es,andi ntrospect i
vepol icymaki ng.Mor eover,ther elated
challengeofr apidlygrowingimpor tsoff ossilfuelsisbecomi ngmor epr omi nent .India
i
mpor tsl argev olumesofoi l(
Indiahasl imi tedr eserves) ,whichunt i
lrecentlyhasbeen
puttingconsi der ablepressureoni tscur rentaccountdef ici
t.Ofgr eaterconcer nt oI ndi
ai s
ther apidgr owt hingasandcoal impor t
s, becauset heyhav el arger eserves, wher et he
combi nationofl ocalproducti
onandt ranspor ti
ssueshav epr event edout putf rom gr owingat
thesamer ateasdemand.Thepowersect orlacksthedi versifi
cationofsour cest hatmost
ener gyimpor tersconsi deressentialforener gysecur it
y .Thisi sreflectedint hel ackof
diversifi
cat ioni nenergysuppl ysour ces.Ar ound83percentofI ndi a
st hermal coal imports
aresour cedf rom I ndonesiaand86percentofi tsgasi mpor t
sar esour cedf rom Qat ar
.

India
selectri
citygener at
ionquadr upledbet ween1990and2012, to1130t erawat thours
(TWh) .I
n2012I ndiawast heworldst hir
dlargestelect
rici
typroducerbehindChi naandt he
UnitedStates,andal mostequal toGer manyandFr ancecombi ned.Howev er ,I
ndi an
electr
ici
tygener atorshavev eryhighown- userequirements(electr
icit
yusedatt he
generati
onpl ant),lar
get r
ansmi ssionl osses(theelectri
cit
ylostduringtr
anspor t)i nexcess
of20percent ,andhi ghcommer ciallosses( f
rom powert heft
).Asar esul
t,Indiaselectri
cit
y
consumpt ionwas870TWh, onl
yfourt i
meshi gherthanAust r
ali
a.Giventhel argedi ff
erence
i
nt hepopul at
ionsofI ndi
aandAust ralia,t
hishighl
ightsthedispari
tyinperper sonel ectri
cit
y
use.

El
ect
ri
cit
yisessent
ial
toeconomi
candhumandev
elopment
.Itsuppor
tsi
ndust
ri
ali
sat
ion,
i
mpr ovedaccesst ocl
eanwat er,sanitationandbasicheal thaswel lasbettereducati
on
serv
ices.Indi
asperper sonelectri
cityusei sver
ylowcompar edwi thadv ancedeconomi es
andstil
llowr el
ativetootheremer gingeconomi es( f
igure7) .Indi
aslowener gyconsumpt ion
perpersoncanbeat tr
ibutedtoashor tfall
inel
ectr
icityinfr
astructure,suchasgr i
dnetworks,
aswellassuf fi
cientandr el
i
ablegener ati
ngcapacity.TheIEAest i
mat esthataround300
mil
li
onpeopl einI ndi
ahav einadequat eaccesstoel ectri
cit
yi nIndia.Thisrepresentsaround
aquarterofthepopul ati
on,withnear ly93percentoft hese300mi ll
ionpeopl elocat
edin
rur
alareas( I
EA2014b) .

Fi
gur
e7:El
ect
ri
cit
yuseandeconomi
cdev
elopment
,2012

Sour
ces:I
EA2014d,
Wor
ldBank2015.

Electr
ici
tyconsumpt ionperper sonisnotuni for
mi nIndiaandv ar
iesbetweenr egions(fi
gur
e
8).Thelowestel ect
ricit
yconsumpt ionperper soni sintheeastandnor t
h-eastregions,
whichhav epopul at
ionsofar ound271mi ll
ionand44mi l
li
onpeople,respecti
vely.On
average,residentsi
nBi harconsumedj ust179kilowat thours(kWh)eachdur i
ng2014.By
contrast
,westcoastr egi
onsconsumedmuchmor eelectr
ici
ty.I
n2014, resi
dentsinGoa
consumedar ound2300kWhperper son,almost13t i
mest heelectr
ici
tyconsumedper
personinBi har.Asacompar i
son,theav erageAust rali
anconsumesar ound10200kWhper
personwhi chisabout4. 5timesasmuchasaper soninGoaand57t i
mesasmuchasa
personinBi har.
Fi
gur
e8:I
ndi
asel
ect
ri
cit
yuseperper
son,
2014

Sour
ce:CEI
C2015

TheIndi anelectricit
ynet workcompr isesfiver egional gri
dsNor thern,Western,Sout hern,
EasternandNor thEast ern(f
igur e9).Thesegr i
dshav ebeeni nterconnectedsincet heendof
2013, butt r
ansmi ssionanddi stri
butioninfrastructurer emainunder devel
oped.Ther eis
consider abl
ediv ersit
yi ntheresour cesav ail
abl eforpowergener ationbetweent her egional
gri
ds.Thebestsol arresourcesar eintheWest( GujaratandRaj asthan);windint heSout h
(Tami lNaduandAndhr aPradesh)andWest( Guj arat)
;coal i
ntheEastandcent ralWest
(Jharkhand, OdishaandChhat tisgarh);nucleari ntheSout h,
Nor t
handEast( Kar nataka,
Andhr aPr adesh, JharkhandandMeghal aya);andhy dropowerint heEast( Si
kkim)( IEA
2014b) .Thedi f
fer encei navailableresourcesi nfluencest heamountofpowerav ai
lable
withi
neachoft her egions.Thosewi thinsufficientresour ceshaveapowerdef icit,
whi l
e
thosewi thlarger esour ceshav eapowersur plus.Onbal ance,I
ndi ahasbeeni npowerdef ici
t
forsev eralyear
s.
Fi
gur
e9:I
ndi
aspowergr
idr
egi
ons

Sour
ce:I
EA2014b

Indiasel ectri
cit
ymar ketispr i
ncipall
ypoweredbycoal whichaccountsforalmostt hree-
quar tersoft otalelectri
citygener at
ion(f
igure10).Indi
a
scoal-fi
redel
ectri
citygenerati
on
mor ethandoubl edf rom ar ound390TWhi n2000t o800TWhi n2012.In2012, I
ndiahada
total i
nst all
edelectricit
ycapaci tyofaround250gi gawatt
s.Around60percentoft hiswas
coal -
fired.Ot herrenewabl esaccountedfor13percentofI ndia
sinst
all
edcapaci t
y,butonly
suppl ied5percentoft ot algenerati
on,i
ll
ustrat
ingtherel
ativ
elylowutil
i
sationandef fici
ency
oft heset echnologies(figur e11).
Fi
gur
e10:I
ndi
asel
ect
ri
cit
ygener
ati
on

Sour
ce:I
EA2014d.

Fi
gur
e11:I
ndi
asi
nst
all
edcapaci
tyandgener
ati
on,
2012

Sour
ce:Pl
att
s2014;
IEA2014d.

Despi
tet
her
api
dincr
easei
nel
ect
ri
cit
ygener
ati
oni
nrecenty
ear
s,suppl
yhasst
il
lnotkept
upwi t
hdemandgr owt handI ndiahasnotgener atedenoughel ectri
cit
ytomeeti ts
requir
ement sf ormanyy ears.Oneoft hemai nway selectri
citydi str
ibuti
oncompani eshave
managedt hi sshortfallhasbeent oloadshedwhi chinvolvescut tingpowert oonepar tofthe
system sot hattheent i
renet wor kisnotov erl
oaded.Distri
but i
oncompani eshavetri
edt o
reducetheef fectofloadsheddi ngt hr
oughadv ancedwar ningsot hatconsumer scanpl an
ahead.Howev er,i
tgener all
yoccur sdur i
ngper i
odsofpeakuse5pm unt i
l11pm (
IEA2014b) .
Loadsheddi ngi sdisruptivetobusi ness,industr
y,hospital
s, school sandhousehol dsthatdo
nothav eaccesst oel ectri
cityforthedur ati
onoft heoutage.Fr equentorpr ol
ongedload
sheddingcanr educeeconomi cactivi
tyorbeadet er
renttobusi nessi nv
estment.Howev er,
l
oadsheddi ngi stypicallydirectedtoconsumer sthatpayt hel eastf orelect
ri
cit
ythe
resi
dentialandagr icult
ural sectors(EIA2014) .

Chal
lengest
oIndi
asel
ect
ri
cit
ygener
ati
on
El
ect
ri
cit
ypr
ici
ng

Elect
ricit
ypricesubsidiesarewi del
yusedinIndia.Indust
rialconsumer sareof t
enleviedwi
th
surchargestosubsi diseotherconsumers,part
icularl
yagricultural usersthatdonotpayf or
el
ectricit
y.Mostelect ri
cit
ysoldtohouseholdsisatpr i
cesbel owt hecostofel ectri
cit
y
generation.I
tisesti
mat edthataround87percentofhousehol del ectr
ici
tyconsumpt ioni
s
subsidised(Pargal&Baner j
ee2014).Art
if
ici
all
ylowel ectri
citypricesdonotsendt he
appropr i
atesignal
sf orconsumer stoimproveener gyeff
iciency, altert
heirelectr
ici
tyuseor
stimulateinvestment( I
EA2014b) .

Electri
cit
yinI ndiaissol dt hroughaf ewdi f
ferentmechani sms, l
ongt erm contract
s,short
term bil
ateralcont r
act sandt hespotmar ket.Distr
ibuti
oncompani espur chaseelect
ri
city
from stategener ationut i
liti
esonl ong-t
erm cont r
act.Theset r
ansact i
onsaccountf orthe
maj ori
tyofelect r
icitysalesi nIndia.Thepricesforthesecont ractsaredet ermi
nedby
regulatoryagenci esandar eusual lyatcostplusamar gi
n.Theel ectri
cit
ypr i
cesetby
regulatoryagenci esinpr inciplerefl
ectsfuelinputcosts.Howev er,elect
ricit
yprici
ngis
polit
icall
ysensi ti
veandr egul at
orsar erel
uctanttoincreasepr i
cest oofrequentlyorbytoo
much.Asar esult,distr
ibut i
oncompani esoftensellel
ectrici
tyatal osswhi chreducesthe
profit
abil
ityoft hesect or( I
EA2012) .

Powert
hef
t

Powertheftisawidespr eadpr
oblem inIndia,
withsomeutil
i
tiesclai
mingthatupt o80per
centoftheirpowerlossescanbeat t
ributedtothef
t(Gupt
a2014) .Thelossofrevenuef
rom
thef
treducest hef
inancesavail
ableformai nt
enanceofexi
sti
ngfacili
ti
esandinvestmenti
n
newgener ati
oncapacity.

Therearev ariousmet hodsofpowert heft

;includingill
egal
lytappi ngintoexi st
ingl i
nes.Inthe
mostpopul ousstateofUt t
arPradesh,powert heftismostpr ev al
entt hroughmet erfraud
andunmet eredusage.Met erfr
audi nv
olvesthepay mentofbr ibest ooffici
alssot hatt hey
wil
lrecordal owerusagef i
gur
eort amperingwi thmet ersusingmagnet s.Excessunmet ered
useofel ectri
cityappearstobemostcommonamongagr i
cultural consumer s,whoar enot
chargedf orelectri
cit
y.I
tisesti
mat edthatagricul
t ur
alconsumer saccountf or25percentof
tot
al el
ectri
cityconsumpt i
onandar er
esponsi bl
ef orthebulkoft hepowersect or
sfinancial
l
osses.Gi vent hewidespreadandr emotenat ureofsomeagr iculturalconsumer sisdiffi
cult
t
opr
ovi
deadequat
emet
eri
ngsy
stemst
othesear
eas(
Gol
den&Mi
n2012)
.

AfewI ndianstateshav ehadsomesuccessi naddr essingthepowert heftissue.Kerala

s
powerut il
i
tieshavear eputat
ionofexcell
entr evenuemanagementandhav eestabl
ished13
anti
-powert heftsquadsundertheanti-
theftandv i
gil
ancewi ngoftheKer al
aSt ateElectr
icit
y
Board( Pargal&Baner j
ee2014).Gujar
athasal sobeensuccessf ulincombat ti
ngpowert heft
especiall
yrelati
ngt ocorr
upti
onthroughthei ntroducti
onofl egi
slat
ion,t
heest abli
shmentof
poli
cest ati
onssol el
yfocusedonpowert heftandt hewi despreadinstal
lati
onofmet er s
(Wil
kes2014) .

Atanat i
onall
evel,
theI
ndianCabinetappr ovedaUS$4bi l
l
ionprogrammeinNov ember2014
torol
loutmetersondistri
buti
ontransformers,feedersandconsumer si
nurbanareasand
str
engthensub-t
ransmissi
onanddi str
ibuti
onnet worksini
ti
ati
ves.Thesemeasuresare
aimedatimprovingel
ectri
cit
yaccessandl i
miti
ngpowerl ossesthr
oughtheftandanyother
means( Reut
ers2014).

Tr
ansmi
ssi
onanddi
str
ibut
ion

AlthoughIndiahasinvestedheavil
yinnewel ectrici
tygenerati
oncapaci t
y,thesamel evelof
attenti
onhasnotbeendi rectedt
oi t
st r
ansmissi oninf
rastr
ucturewhi chhascont ri
but edto
thechallengeofmat chi
ngelectr
ici
tysupplywi thdemand.I nvestmentplanst oincrease
transmissioncapaci
tyhav ebeenstall
edbydel ay si
nacquiringland,delaysinschedul ingand
projectdeli
ver
y ,
alackofbestpracticeinprojectexecuti
onandi nsuf
fici
entpriv
at esect or
partici
pati
on(IEA2014b).

I
ndiasel
ectr
ici
tygr
idhashightransmissi
onanddi str
ibut
ionlossesrelat
ivetotherestofthe
world.Ev
enthoughlosseshavebeendeclini
ng,India
slossesareestimatedatbetween21
percentand30percentnational
lyandupt o67percenti nsomest ates(fi
gure12)
.The
nati
onalaver
ageisaroundthreeti
mest hesizeoflossesinChinaandt heUnitedStates.
Fi
gur
e12:Tr
ansmi
ssi
onanddi
str
ibut
ionl
osses,
sel
ect
edcount
ri
es

Sour
ce:I
EA2014e.

Therear emul t
ipl
er easonsforIndi
asel
ect
ri
ci t
ygri
dper f
ormance.Fr om atechnical
perspective,
gridlossespr i
mari
lystem f
rom insuf
fi
cientinvestmenti nmaintenanceand
system upgrades.Thi shasresult
edinanadhocappr oachtoext endeddistribut
ionli
nesand
overloadedtransformersandconduct or
s.From acommer cialperspecti
ve,theselossesare
theresultofpowert hef
t(di
scussedabove),
inadequatemet er
ingandexcessconsumpt i
on
i
nheav i
lysubsidi
sedsect ors(
IEA2014b).

Intheshor tterm,transmi ssi

on, di
stri
buti
onandcommer ci
allosseswi l
laffecttheabili
tyof
thesy stem t omat chsuppl yanddemand, whi chmayhav econsequencesf orIndia
s
economi cgr owth.Ov erthelongert er
m, i
ssueswi thtr
ansmissionanddi stributi
onwi l
lalso
affecttheabi l
i
tyofI ndi
at oincreaseitsreli
anceonr enewableener gysources.Cur r
ently,
Indiasnewsol arandwi ndcapaci tyisnotwel li
ntegr
atedintotheel ect
ri
citygrid.Sl
ow
timef r
amesf orgridconnect ionandpoorgr i
dmanagementhav eadv er
sel
yaf fectedgrowth
i
nwi ndpr ojectsandcoul dpr esentabarrierforthefurt
heradopt i
onofsol arphot ov
oltai
c(PV)
(IEA2014b) .

Thereareplansunderwaytodoublet
heinter
-regi
onal
transfercapacit
yofIndia
select
ri
cit
y
gri
d.TheMOPhasal soannouncedit
sintent
iontomoderniseIndia
selectr
ici
tydist
ri
buti
on
system andimprov
edat acol
l
ectiont
hroughtheRestr
ucturedAcceleratedDevelopmentand
ReformsPr ogr
amme.

Sect
orpr
ofi
tabi
li
ty

I
ndia
spowersect
orhasbeenmakinglar
gelossesovert
hepastsever
aly
ear
s.Pr
ofit
abi
li
ty
hasbeenaf
fect
edbyregul
atedel
ectr
ici
typr
ici
ng,powerthef
t(ast
hesect
ori
snotrecei
vi
ng
anincomef ortheel ectri
citygenerated),tr
ansmi ssionanddi st
ributi
onlosses, poorbill
ing
practices, consumer sf ai
lingtopayandt hemi sclassi
ficati
onofcust omer sassubsi dised
users( IEA2014b) .Ast eepr i
seint hecostofi nputshasal soincreasedt hecostof
gener ation.I nputcost shav eincreasedbecauseofdecl i
ningdomest icfuelavail
abil
ity(which
hasi ncreasedt her eli
anceonmor eexpensi veimpor t
s)andpoorpr ocurementpl anning,
whichr esul tsi ndi
st ri
butioncompani esmaki nglastmi nutepowerpur chasesf rom thespot
mar ketwhi chi stypicall
yhi ghercostt hanlong-t
erm cont r
acts(Pargal &Baner j
ee2014) .

In2011,thecombi nedlossesofthesectorwerearoundUS$10bi l
li
on, ar
ound17percentof
Indi
asgrossfiscal defi
citand0.
7percentofitsGDP.Sectorlossesar eoverwhel
mingly
concentrat
edint hedi str
ibuti
oncompanies(Pargal&Baner
jee2014) .Lowpr of
it
abil
it
yinthe
sectorr
educest hecapaci t
yofcompaniestoinvesti
nnewcapaci ty
,impr ovedeff
ici
encyand
othervi
talinf
rastructure.

Lossesi nt hesectorhav ebeenf i

nancedt hroughheav yborrowing, typicall
yint heform of
short-
terml oans,t
oensur ethatcompani escanmeett heiroperatingexpenses.Thi shas
resul
tedinamor eleveraged(debt-f
inanced)capi talstruct
ureacr osst hesect orandan
onerousi nterestburden.Persi
stentlossesandr isi
ngdebtbur denshav er educedt he
credi
twor thinessofthesect or
,parti
cularl
ydi str
ibutioncompani es.I nlate2011, many
l
enderswi thdrewfinancefrom thesector.Ascr edi tavail
abil
it
ydecl ined, dist
ributi
on
compani eswer eunabletopayf orpowerpur chasesev enwhenel ect r
icitywasav ail
abl
eto
themar ket( Pargal&Baner j
ee2014) .Asar esul
t,manygener atorswer efaili
ngt orecover
thei
roper at i
ngcostsandr esortedtoreduci ngout puttowel lbelowcapaci ty,creati
ngsupply
probl
ems( I
EA2014b) .Ithasalsoslowedi nvestmenti nnewel ectricit
ygener ati
oncapacity.

Shouldt
hesectorcont
inuetost
rugglewit
hpr ofi
tabi
li
ty,
wit
hf l
owoneff
ectsf
orthespeed
andscaleofi
nvestment,
iti
spossibl
ethatIndiawill
beunabletomeeti
tsambit
ious
expansi
ontar
gets.

Regul
ati
onandpr
ojectappr
oval
s

Indi
ahasof tenmissedt heelectr
ici
tycapaci t
yexpansi ont argetsoutli
nedi nit
sFive-
Year
Plans(FYP).Oneoft hegreatestbarri
erstot hedev elopmentofel ect
ri
cityinfr
astr
ucture
(bothgenerati
onanddi str
ibuti
on)isthet i
mer equir
edt oobt ai
nt herel
ev antclear
ances.
Whiletheseregul
at i
onshav eimportantfunctionsi nensur i
ngcommuni t
yrightsand
envir
onment alpr
otecti
on,dealingwithther elevantmi nist
riesiscompl exandatt i
mes
poli
ti
call
yandsoci al
lysensiti
ve.Morer ecently,i
nfrastructureproject
shav ebeendel ayedby
publi
cprotestsandf or
mal appealsthrought hel egalsy st
em (IEA2014b) .

Coalconsumpt
ion
Indi
aist heworldsthir
dlargestcoal consumerbehindChi naandtheUni t
edStates;andthe
shareofcoal i
nI ndi
aselectri
cit
ymi xhasbeenr i
sing.In2013Indiascoalconsumptionwas
esti
mat edat790mi ll
i
ont onnes( or516mi l
l
iontonnesofcoal equival
ent(Mtce),ar
ound10
percentl esst
hant heUni t
edSt ates(IEA2014f)
.Thermal coalaccountsforaround85per
cent,or665mi ll
iontonnes, ofI
ndi a
scoalconsumpt i
on.Met al
l
urgicalcoal(
80mi ll
i
on
tonnes)andl i
gnite(45mi l
li
ont onnes)makeupt hebal ance.

Thepowersect
oraccount
sformor
ethan70percentofI
ndi
a
scoal
useandsuppor
teda
fi
ve-f
oldincreaseincoaluseinelectricit
ygenerationoverthepastf ewdecades.Assuch,
thepowersect oriscl
earl
ycentraltot hecoaloutlookinIndia.Indi
asst
eel producti
onhas
i
ncreasedbyar ound25percentov ert hepastfi
vey ear
st oaround83mi ll
iont onnesin2014.
Thecementi ndustry,
thesecondlar gestgloball
yaf t
erChina,isalsoamaj orcoal user
,
accounti
ngf oraround5percentoft otalcoaluse.Otherindustri
alsect
ors, i
ncludi
ngbrick
manufacture,consumesmal lquantitiesofcoal.

Coal
-f
ir
edgener
ati
on

Indiahasi nv estedheav il
yinnewcoal -f
ir
edgenerati
onov ert hepastfewdecadest osupport
i
t srapidgr owt hinelectri
cit
yconsumpt ion(fi
gure13).Ther ateofgrowthinIndia
scoal-
fi
red
gener at
ioncapaci tyhasacceler at
edsince2008wi t
hinst all
edcapaci t
yalmostdoubl i
ngin
j
ustsi xy ears.Indiascoal-
fir
edcapacityislocat
edcloset ol argedemandcent reswith
around42percentofcapaci t
ylocatedinthewesternr egion, 27percenti
nt henorthand18
percenti nt hesout h(figure14).Unli
kemanyOECDcount ri
es, I
ndi
asinst
all
edcapacityi
s
relati
velynewandhasmanyy earsofoperati
onall
i
fer emai ning.

Fi
gur
e13:I
ndi
asi
nst
all
edcoal
-f
ir
edcapaci
ty

Sour
ce:Ener
dat
a2015,
www.
ener
dat
a.net

Fi
gur
e14:I
nst
all
edcoal
-f
ir
edgener
ati
oncapaci
tyofI
ndi
asut
il
it
iesbyr
egi
on,
Nov
ember
 2014

Sour
ce:CEI
C2015

Until2010al mostal lI
ndiancoal -fi
redplantsusedsubcr i
ticalt
echnology,withanaver age
eff
iciencyofar ound28percent , compar edwith36percenti nChi naand33percenti nthe
UnitedSt ates.Reflect
ingther el
at i
vel
yl owereffici
ency,t
heemi ssi
onsfrom I
ndia
scoal f
leet
arear ound1100gr amsofCO2perki lowatthour, whi
chiswel labovethemostef fi
cient
pl
ant satar ound750gr ams( IEA2014b; I
EACleanCoal Centre2014).Inadditi
on,t
heuseof
poorqual it
y ,
highash, Indi
ancoal ,whi l
eaffect
ingt hety
peofpl antsthathavetradi
ti
onal l
y
beenbui ltandhenceef fi
ciency,alsoreducespl antavai
labil
it
y,asmor efrequent
maint enancei srequir
ed.

Thesef act orshaveunderpi

nnedt het argetsintheTwelfthFYP( r
unningf r
om 2012t o2017)
tobuil
dl ar gescal
e,mor eeff
icientsuper cr
iti
calpl
ants.Furthermor e,i
tisint
endedtouse
mor eefficientcool
ingtechnologies,avoiddrawingoni ncreasinglyscarceinl
andwat er
resourcesandusehi gherquality
,lowashcoal inordertomaxi miset heeffi
ciencygains,and
rai
sepl antut i
li
sati
on,t
hroughhi ghercoal avail
abil
i
tyandshor t
ermai ntenancetimes.This
coalhast endedtocomechi eflyfrom Indonesia,wheresev eralpri
v at
epowercompani es
haveanowner shi
pstakeinlocal mines.

Thefir
stsupercri
ti
calplantinIndi
awascommi ssionedin2012.Iti
sexpectedthatplants
usi
ngt hi
stechnologywillaccountforanincr
easingshareofnewpl ant
sbei ng
devel
opedanest imated40percentofnewpl antsbeingdevel
opedov erthecurr
ent
decadeaspolicymandat estheirusebeyond2017.Nonet hel
ess,t
heef f
ici
encyofIndian
coal-
fi
redpowerpl ant
swi ll
remainwellbelowglobalbestpract
ice,
andsubcr i
ti
calpl
ant swi
l
l
dominatethepowermi xf orsomet i
me.

Box2.Coal
-f
ir
edel
ect
ri
cit
ygener
ati
ont
echnol
ogi
es

Pul
ver
isedCoalCombusti
on(
PCC)i
sthemostcommoncoal
-f
ir
edtechnol
ogydepl
oyed
wor
ldwide.Ther
ear
eaf ewPCCt
echnol
ogi
esbei
ngusedt
hathavemarkedl
ydi
ffer
ent
effi
ci
encies,cost
sandpoll
utionoutcomes.Theef fi
ciencyofaplantrefer
stotheelect
ri
cit
y
producedforagivenheati
nput.I
ncoal-f
iredpowerpl ants,thi
sdependsonthetemperature
andpressureofthesteam gener
atedintheboilerduringcombustion.Theef
fi
ciencyofa
pl
antincreasesasbothtemperatur
eandpr essurearei ncr
eased.

Subcri
ti
cal
technologi
esar
ethemostcommoncoal -f
ir
edplantut
il
ised.I
thasthel
owest
eff
ici
ency(
around30percent)oft
heavai
labl
etechnol
ogi
es.Subcrit
ical
plant
sgener
all
y
havelowcapi
talcosts,
whi
chsupport
sit
slarge-
scal
euptake.

Supercri
ti
calt
echnologiesachi
eveeffi
cienci
esofaround40percent.Thecapitalcostof
theseplant
sishigherbecauseitmustusemat er
ialswit
hagreaterheatt
oleranceinthe
boil
er.Super
cri
ti
calplantsuselesscoalandgeneratel
essCO2thansubcri
ticalpl
ants.

Ult
ra-
supercri
ti
cal andAdv ancedult
ra-
supercr
it
icalpl
antsoperat
eateffi
cienci
esbetween
4550percent .Thecapitalcostofthesepl
antsishighbecausetheymustuseadv anced
materi
als(wit
hhi ghnickelcontent
)intheboil
er.Theyuselesscoalandemi tl
essCO2than
super
cri
tical
plant s.

Plant
sthatuti
l
isesupercr
it
ical
technol
ogi
esandabover
equir
ehigherener
gycoal
,wi
thl
ow
ashcontent
,tooperat
eoptimall
y.SeeAppendi
xPar
tBforfur
therdet
ail
s.

Coal
-f
ir
edpl
antper
for
mance
Theav erageef fi
ciencyofI ndia
scoal -
fi
redpowerf l
eetisrelat
ivel
ylowcompar edwi thother
l
ar geener gyuser ssuchasChi naandt heUni t
edStates.Thetwounder lyingcausesoft his
aret hequal i
tyofcoal usedandt hetechnicalspeci
fi
cati
onsoft hegener ationf l
eet.
Impr ovement si nbothar eascoul dproducesubst anti
alimprovementsi nef fi
ciencyandt otal
out put,whil
er educingcar bonandpar ti
culateemissi
onsperuni tofelectricit
y.Figure15
i
llustratestheef fectofdifferenttechnologiesonan800megawat tpowerst ati
onoper ati
ng
atacapaci tyfactor(actual outputrel
ativetopotenti
aloutput)of80percentandgener at
ing
6TWhay ear(IEACl eanCoal Centre2014) .
Fi
gur
e15:Ef
fect
sofdi
ff
erentt
echnol
ogi
esoncoal
useandcar
bonemi
ssi
ons

Sour
ce:I
EACl
eanCoalCent
re2014.

Not
e:Emi
ssi
onsar
erel
ati
vet
oasubcr
it
icalpl
anti
.easuper
cri
ti
calpl
antgener
ates13percentl
essCO2

Indiasdomest icall
ypr oducedcoal t
ypicall
yhasal owtomedi um ener gycont ent,rangi
ng
from 2500ki localoriesperkil
ogram to5000ki l
ocalori
esperkilogram (Australiasexports
typicallyhaveanener gycontentgreaterthan5500kilocal
ori
esperki logram) .Theener gy
cont entofIndi ascoal hasbeendecl i
ningsteadil
yoverthepastsev eraldecadesasmi nes
depl etetheirresour ces.Theav er
ageener gycontentwas5900ki l
ocaloriesperki logram i
n
the1960s, 4200ki l
ocal or
iesperki
logram inthe1980sandar ound3500ki l
ocal ori
esper
kilogram int he2000s( IEA2014b).Thismeanst hatl
argervol
umesofcoal mustbebur ned
toachi evethesamel evelofel
ectr
icit
ygener at
ionandmor epol l
utantemi ssionsar e
gener ated.

Accordingtot heWor ldHeal t

hOr ganizati
on,sixofthetenci t
ieswiththehighest
concentrati
onsofPM2. 5( part
icleslesst han2.5mi crons)arelocatedinIndia.NewDel hihas
thehighestconcent rati
onofPM2. 5,withanannual averageof153mi crogramspercubi c
metre.Bycont rast
, Beij
inghasanannual averageof56mi crogramspercubi cmet re,al
most
athir
doft helev el
sobser vedinNewDel hi(WHO2014) .Coal-useinpowergener at
ioncan
contr
ibutetoPM2. 5,butisnott hemai nsource.Mot orvehicl
es, r
esidenti
alwoodbur ning,
for
estfires,agri
culturalburni
ngandsomei ndustr
ialprocessescanal socont r
ibutetoPM2. 5
concentrati
ons.

Thehi ghashcont entandmoder at

emoist ur
eofIndi
ancoal l
owersi
tsheatingv alueand
reducestheeffici
encyofi t
spowerpl ants.Thehighl
evelsofsil
i
cainIndiancoal alsoresul
t
i
nt heashby -
productbei nghighlycor
rosive.Thecor
rosionmakestheoper at
ionand
mai nt
enanceofI ndia
scoal-f
iredfl
eetandt heremovalofashmorediff
icultr
elativetoplant
s
usinghighergradecoal s.

Theef
fi
ciencyofapowerpl
anti
sal
soaf
fect
edbyt
het
emper
atur
edi
ff
erencebet
weent
he
i
nternalheatsour ceandt heext er nalenvironment .India
shighambi entt emper aturesand
rel
ativehumidityarenotconsi stentwi thachi evingsomeoft heefficienciesachi evedin
coolercli
mat essuchasi nEur ope.Coal -fi
redpowerpl antsinIndiat endt operfor m betteri
n
winterthaninsummer( I
EA2014b) .Finall
y, around90percentofI ndi ascoal-
firedf l
eet
uti
li
sessubcr it
icaltechnologiest hathav esubst anti
allyloweref f
ici
encyr atesthant he
supercrit
ical
andul tra-
super cri
ti
cal technol ogiest hathav ebeendev elopedanddepl oyedin
vari
ouscount ri
es( seeAppendi xPar tBf ormor edet ailontheset echnol ogies)
.Mor eover,
muchofI ndi
asoldergener atorsar esmal leruni tswi t
hef fi
ciencywel l below30percent( I
EA
2014b) .

Coalsuppl
y
Coalr
eser
vesandpr
oduct
ion

Coal i
sakeycommodi tyinensur ingIndiasener gysecur i
tybecausei tist hemostabundant
non-renewabl eener gysour cei nIndia.Ithast hewor l
dsf i
fthlargestpr ov edr ecov erable
reservesofcoal (60.6bill
iont onnes)af tertheUni tedSt ates( 237.3bi ll
i
ont onnes) ,Russia
(157.0bi l
l
iont onnes) ,China( 114. 5bill
iontonnes)andAust rali
a( 76.4bi l
liont onnes)( WEC
2013) .Howev er ,someexper tshav equest i
onedwhet hert hesedeposi t
sar eaccessi blegiven
currenttechnol ogiesbeingdepl oyed( I
EA2012) .Ifreserv esar eov erestimat ed, t
hiscoul d
becomeapr oblem f orproduct i
onpl anningov ert hemedi um tol ongert erm.MostofI ndi
as
coal r
eserv esar elocatedi nt heeast ,withJhar khand, Odi sha, Chhat t
isgar handWestBengal
account i
ngf orar ound78percentoft otalprovedr eserv es( f
igure16) .Thedi st r
ibuti
onof
Indi
ascoal r
eser vescreat esasuppl ychal l
engef orIndia.Thebul kofi tscoal resourcesar e
geogr aphical
lysepar at
edf rom i tsprincipalareasofconsumpt ionandi trequi ressubst ant
ial
i
nf r
ast r
ucturenet wor kstot ranspor titfrom mi nesi t
est ogener ators.

Fi
gur
e16:I
ndi
aspr
ovedcoal
reser
vesbyr
egi
on,
2014

Sour
ce:CEI
C2015
Refl
ectingthel ocat
ionofit
scoalr eserv
es,themaj or
it
yofIndiascoal pr
oduct
ioni
sbasedi
n
theeastoft hecount r
y(f
igure17).Jharkhand,Odisha,Chhat
tisgarhandWestBengal
accountforar ound65percentofI ndia
scoal pr
oduction.Afurther23percentofI
ndi
as
coalproductionissourcedfrom Madhy aPradeshandAndhr aPr adesh.

Fi
gur
e17:I
ndi
ascoalpr
oduct
ionbyr
egi
on,
2013

Sour
ce:CEI
C2015

Coal quali
t yvariessubst ant i
allyacrossI ndiaandt heMOCcl assifiest hermal coal intosev en
gradesbasedonheatv alue, ashcont ent,andgr osscal or i
fi
cv al
ue( tabl e2,MOC2014d) .
Indiancoal t
ypicallyhasal owener gycont entcompar edwi thot heri nt ernati
onal l
yt raded
coalswhi cht ypicallyhav eone- thi
rdt oone- halfgr eaterener gycont entt hanav erageI ndian
coals.Indiancoal sal sohav ehighashcont ent( 30percentt oasmuchas50percent ),and
l
owsul phurcont ent.Themoi sturecont entofI ndiancoal i
sv ar i
ableandi stypicallyhi gherin
coal produceddur ingmonsoonseason( IEA2012) .Accor dingly,Indi ancoal i
sgener al l
y
unsui t
edf orexpor t,wi t
hhi gherqual i
tyimpor tedcoal oftenbl endedwi thdomest iccoal to
raisequalityandhencet hecombust ionef fi
ciencyofI ndiascoal -
f i
redf leet
.Alternat ively,
Indiancoal i
swashedt or educet hev ol
umesofi mpur it
iesandi mpr ov ecoal quality.Howev er
,
benef i
ciat
ion( washi ng)capaci tyinIndiaisl i
mi tedandcapaci tyut i
lisat ionislow
(Bhattachar yaetal 2013) .Coal washing, i
dent ifi
edasakeyt echnol ogyi ntheEl event hFYP
from 2007t o2012, toimpr ov eeffi
ciencyandr educepol l
ution, f
ell farshor toft arget s,wi t
h
capaci t
yonl yreachi ng125mi ll
iontonnesay ear ,
andwashedcoal pr oductionf all
ingshor tof
50mi l
li
ont onnes.I nt heTwel ft
hFYPf r
om 2012t o2017, t
her mal coal washingcapaci t
yi s
plannedt or each175mi l
liont onnes.
Sour
ce:MOC2014d.

Indi
ai stheworldst
hir
dlargestproduceroft
hermal coal
,well
behindChi
naandtheUni
ted
States.Despit
elargereser
ves,producti
ongrowthhasbeenwel lbelowgr
owthin
consumpt ioni
nt hepastdecade( f
igur
e18).I
nr esponsetothewideni
nggapbetweenI
ndi
as
coal consumpti
onandpr oduction,i
mportsofthermalcoalhavegrownfr
om 12mill
i
on
tonnesi n2004to142mi ll
i
ont onnesin2013.

Fi
gur
e18:I
ndi
ascoalsuppl
yanddemand

Sour
ce:I
EA2014f
.
Indi
asther
mal coalpr
oductionincreasedmor ethansix-
foldbet ween1978and2009i n
responsetor apidgrowthincoal consumptionintheelectri
citygenerati
onsector.However
,
therateofgrowt hincoal pr
oductionhassinceslowedconsi der
ably.Ingeneral
,the
developmentofnewpr oject
shasbeenst al
ledbydiff
icult
iesi nobtai
ninglandaccess,
envir
onment alapproval
sandi nadequat etr
ansporti
nfrastructur
e.

CILhasmissedi t
sproduct
iontar
getsforthelastseveralyearsandi tsinabil
i
t yt
omeet
domesti
cr equi
rementsisbecomingoneoft hekeydilemmasf orIndia
sener gypoli
cy.I
n
2013,I
ndiaproduced518mi l
li
ontonnesofthermal coal.CIL
sproduct i
oni n201415( Apri
l
2014toMar ch2015)was3percentbel owitstargetof507mi l
li
ont onnes.CI Lci
tedheavy
rai
n,l
abourdisputesandenvir
onmentallawsasbei ngthekeyr easonsf ormi ssi
ngthetarget
(Dogr
a2015) .

Theav eragepr oducti

ongr owthr ateisalsodecl i
ning.Overtheperi
od1978t o2008,
producti
ongr owthaveraged6percentay ear
.Since2008t hishasdroppedt oj
ust2percent
ay ear(f
igur e19).Thekeyi ssuef orthegov er
nmenti stoov er
comet hi
sgapt otheextent
possibl
e, throughpoli
cyandot herref or
ms, sothatproducti
oncanaccel er
atetokeepup
withfastgr owingpowerandi ndust r
ialdemand.Thecompl exregul
atoryandinsti
tut
ional
setti
ngsf orIndia
scoal i
ndust r
ywi llbesignif
icantchall
engestoachievi
ngt hi
soutcome.

Fi
gur
e19:I
ndi
ast
her
mal
coal
product
ion

Sour
ce:I
EA2014f
.

Coalpr
oducer
s
Gov
ernment

CIList
helar
gestcoalpr
oducerint
heworl
d.I
taccount
sforar
ound80percentofIndi
a
s
tot
alcoal
product
ionandsuppli
escoal
to82ofIndi
a
s86coal-
fi
redpowerst
ati
ons.CIL
suppliescoal
atadi scountedpri
ce,relati
vet ointer
nat
ionall
ytr
adedcoal
,i
naneffortt
o
protectgener
atorsfrom exposuretopr i
cev olati
l
ity
.CILhasbeengrant
edMahar
atnast
atus
whichal l
owsitgreaterautonomyov erinvestmentandot herst
rat
egi
cdecisi
onst
oexpand
thecompanywi thoutf or
mal gov
ernmentappr oval(CI
L2014a).

Thecentral gover
nmenthasa49percenti nteresti
najointventur
ewi t
hthegover nmentof
AndhraPr adeshcall
edt heSingareniColl
ieri
esCompanyLi mited(SCCL).SCCLmai nl
y
suppli
escoal t
osouthernIndiaandaccount sforaround10percentofI ndi
ast
ot al
producti
on.TheNey veliLi
gniteCor por
ati
onbasedi nTami lNaduisalsounderthe
administ
rativecontr
oloftheCent ralGovernment( MOC2014c) .ThestateofGujarathasi
ts
ownmi ningcompany ,theGuj ar
atMi ner
al DevelopmentCorporati
on.

Pr
ivat
e

From 1976,publi
candpr i
vatecompani esinkeyindustr
ies,suchassteel
-making,cement
producti
onandel ect
ri
cit
ygenerati
on, t
hatrequi
redast ablesupplyofcoalwerepermitt
edto
operatecoalmines.Thi
spr oduct
ionisr ef
err
edtoas capti
veasitcanonlybeusedin
approvedacti
vit
iesandcannotbet radedorexpor t
ed.Howev er,anysur
plusproducti
oncan
besoldtoCIL( I
EA2012) .

Toexpedi t
egrowt hincapt iveproduction,theIndianGov ernmentall
ocat
ed218bl ocks(land
avail
ableforcoalprojectdev elopment)f ordevelopmentsi nce1993.However,theal
locati
on
oftheseblocksdidnotr esultinarapidincreasei nproductionforanumberofreasons
i
ncludingthecapacityoft hesuccessf ulapplicantstodev elopminesandav ery
cumber somepr ocessf orobt ai
ninglanduseappr ovals,andaccesstotr
ansportfaci
li
ti
es.Of
the109coal blocksallocatedbef ore2007, only28bl ockshadcommencedpr oducti
onby
201011( PrayasEner gyGr oup2013) .

InSeptember2014, t
heSupr emeCour tofIndiadetermi nedthatthepr ocessforall
ocati
ng
capti
vecoal bl
ockswasar bitraryandil
legal.Asar esult,214coal blockli
cenceswer e
cancell
ed(WorldCoal Associ at
ion2015a).Ar ound46oft heblockswer eopent otwo
separatecompetit
iveauctionsbet weenmi d-Februaryandl at
eMar ch2015( Si
nghMP2015) .
Theauct i
onprocesshasr aisedl ar
gesumsofmoneyf ortheIndiangov ernment.Asoflate
March,around33coal blockshadbeenauct i
onedf oraround2t ril
li
onRupees( around
US$32bi l
li
on).

Thegov ernmentusedar everseauct i

onpr ocesst osellcoalblocksal locat edt othepower
sectori nanat tempttor educef uel pricesandkeepel ectri
cit
yr atesdown.I nt hisprocess,
thebi dderwi ththelowestquot ebel owt hereserv epri
cewasawar dedt heblock.Thequot e
represent sthecompany sbasel evel costtopr oducecoal inclusiveoft axes.Theywi llbe
commi t
tedtopr oduceacer t
ainv olumeofcoal orwilli
ncurfinanci al penal ti
es( muchlike
take-or -
payar r
angement sf orinfrastructure).Becauseofst rongcompet i
ti
onf orthe
availablecoal blocks,
thegov ernmentsett her eservepriceatzer o.Ther ehasbeenconcer n
thatt heaggr essivebi
ddingt osecur eblocksmaymakesomeoft hepr ojectsunv iabl
e.
Howev er,i
tisnotant i
cipatedt hatthepr ofi
tabil
it
yoff i
rmswi llbeaf fect edbecauset he
captiv eproductionwilli
mpr ov ecoal avail
abil
it
y( somecompani eshav enotbeenoper ati
ng
becauseofi nadequatecoal supply)andr educer eli
anceonmor eexpensi vecoal imports
(Resour ceDi gest2015).
InMar ch2015, I
ndiasParl
iamentpassedt heCoal Mines( Speci
al Provisions)Bill
.Thebi l
l
affi
rmst hatcoal bl
ockswill nowonl ybeallocatedthroughauct iontoensur etr
anspar encyof
all
ocationandsecur elarger evenuestreamst othestates.Iti
sexpect edt hatmor ecoal
blockswi l
lbeauct i
onedov ert hecourseof2015.Thebi llalsoall
owsf oreigncompani eswi t
h
Indi
ansubsi di
ariesorinaj ointventurewit
hI ndi
ancompani estodev elopcoal depositsfor
ownconsumpt ionorsale(Wor ldCoalAssoci ati
on2015a) .Howev er,interestfrom for
eign
compani esisexpect edt
obel imitedbecauseofaper ceptionofexcessi vebureaucracy,
l
engt hyapproval pr
ocessesandpoorcoal qual i
tycompani eswoul drat hersellcoalt
oI ndia
thandev el
opIndi andeposits.Theappet i
tet oinvestinnewpr oj
ectshasal sobeenaf fected
bylowcoal pr
icesassociatedwi t
hglobalov ersupply(Das&Paul 2015) .

Theexperi
enceandpedi greeofthecompaniesthatar esuccessf
uli
nobt ai
ningcoalbl
ocks
thr
oughtheauctionprocesswi l
lpr
ovideagoodi ndicat
ionofwhethercapti
veproducti
onwil
l
beabletogrowatasuf fici
entpacetomeetIndiasgrowingrequi
rements,andindeed
whethert
heprivatesectorcanmaket hecontr
ibutionanti
cipat
edbythegov ernmentin
rai
si
ngcoaloutputrapidly.

Tr
anspor
t
Themaj or i
tyofIndi
ascoal -
fi
redgener ati
oncapaci t
yisl ocatedinthenor thernandwest ern
regionsoft hecountry(fi
gure14) .Onlyaround13percentofcapaci tyislocat edinthe
easternregionwher ecoal productionisconcentrated.Assuch, mostofI ndia
scoal
productionneedst obet ransportedlongdistancest ogett oitsfi
naldest i
nation,whichhas
placedconsi der
ablestrainont heinfrast
ruct
urenet wor k.In201314, around55percentof
CILsproductionwast ransportedbyr ail
,24percentbyr oad, 19percentbymer r
y-go-
round
and2percentbyot hermeans( CIL2014b).Adi scussionont hedi
fferentmet hodsofcoal
transportat
ioncanbef oundi nbox3.

India
scoalt
ranspor t
ati
onsy stemshav ebeenchal l
engedbyt herapidincreasei ndomest i
c
demand.Ashor tageofr ailinfrastr
ucturehasst all
edthemov ementofcoal from domest i
c
mi nestopowerplants,andhascont r
ibutedtot heincreasedr eli
anceoni mpor ts.Whil
e
India
scoali
mpor tshav eincreasedr apidlyoverthepastf i
v ey ear
s, I
ndiascapaci t
yto
cont i
nuetoi
mpor tlargev ol
umesofcoal hasal sobeenaf fectedbyi nfrastructureli
mitat
ions.
Dur i
ng2014,importswer eaf fectedbypor tcongest i
on,particular
lyont heeastcoast ;
a
shor t
ageofrai
lwagonsf orcedsomecompani estotranspor tcoal byroad, whichcosts
3040percentmor e;andi nadequat elogisti
cst omov ecoal from por ttout i
l
iti
es.

Thetr
ansportat
ioninf
rastruct
urechall
enge,particul
arl
yrail
,i
sl i
kelyt
obeexacerbatedas
I
ndia
scoalconsumpt i
ongr ows.Growthini
mpor tsint
ocoast all
ocati
onsmayreli
evesome
oft
hisburden.However,thedemandf orrai
lfreightcanonlyincreaseshar
plyasother
modesofcoal t
ransport
ationhavelit
tl
epotential f
orexpansion.

Box3:Coalt
ranspor
tat
ion

Onceextract
ed,coalmustbet ransport
edt oit
sf i
nalend-user
.Forpowerpl ant
sl ocated
wit
hincloseproxi
mitytothemi neorinaccessiblebyroad,coalcanbet r
ansportedby
conveyorbel
t,whichreducestransport
ati
oncost s.Conveyorbeltsgeneral
l
yt r
anspor tcoal
between8and24ki lometres.Theyarerelati
velylowmaintenance,butcanbeener gy
i
ntensi
veandoncebui
l
thav
eli
mit
edl
ocat
ionf
lexi
bil
i
ty.

Forpowerplantslocatedf urtherawayf r
om themi ne,butsti
lli
nr el
ati
vel
ycl oseproximi
ty,
coalcanbetransportedbyr oadintrucks.Thesetruckscanhav eacapaci tyofupt o200
tonnesinsomecount ries,butt hecapacit
yistypi
cal l
ylowerinIndia.Wherer oadis
accessi
ble,t
rucksprovidet hemostv er
satil
etr
anspor tati
onoption.Howev er,l
oadingand
unloadi
ngcanr el
easel argev olumesofdustpar t
icles.Inaddi
ti
on, tr
uckloadsar eusual
ly
uncoveredsotherecanbesomepr oductlossduringtransport
at i
on.

Railist
hemostcommonf orm ofcoaltranspor
tati
onf orlongdist
ancesbetweenmi neand
powerplantorport
.At ypi
caltrainwi
llhave100t o120car r
iages,
witheachcarr
iagehol di
ng
between100and110t onnes.Thecarriagesgenerall
ycanbeempt iedbytur
ningt hem
upsidedown,whichreducesunl oadi
ngt i
mes.Railistypical
lymoreenergyeffi
cientthan
othersyst
ems,butishighercost .

Amer ry
-go-
roundisadedi
cat
edshuttl
etraint
hatoperatesbetweent
hemineandthepower
plant
.Thetrai
ncanrev
ersedi
rect
ionwit
houtstopping,
whi chal
lowsi
ttol
oadandunloadi
ts
cargowhil
eitisst
il
lmovi
ngandimproveitsef
fici
ency.

Wherecoal mi
nesar eclosetowater
way s,
coalbargescanbeusedtotranspor
tcoaltoend
user
s.Typical
lyatowboatwi l
ltowfi
fteent
ofortybarges;
ajumbobargecancarryar
ound
1200tonnes.Bargescanpr ovi
deeconomiesofscaleandarety
pical
l
ycheaperthanrail
.
However,t
heyarer est
ri
ctedtowaterwayswhichcancauseslowerdeli
ver
y.

Shipsaremostcommonl yusedforint
ernat
ionaltransport
ation.Themostcommonshi p
si
zesar e:HandySi ze(40000to45000deadwei ghttonnes,DWT) ; Panamax(60000to80
000DWT) ,whichistechni
call
ythemaximum si zeforav esseltopasst hr
oughthePanama
Canal(pre-expansion)
;andCapesize(morethan80000DWT) ,whichisavesselt
hati
stoo
l
argetogot hroughthePanamaCanal andneedst osai lvi
atheCapeofGoodHopef r
om the
Pacif
ictotheAt l
anti
c(Spei
ght2013).

I
mpor
ts
Until
r ecently,
Indi
asdomest i
ccoal product i
onwassuf f
ici
entt omeetconsumpt i
ondemand.
Howev er
, t
hecombi nat i
onofrapi
dlyincr easinguseandt herecentdownt urninproducti
on
growthhav eunderpinnedanincreasei nI ndi
ascoali
mpor ts.From 2009,Indi
asimports
acceleratedbot hi
nv olumeandper cent ageofsupplyt erms,increasi
ngfrom 20mi ll
ion
tonnest o180mi l
l
iont onnesbetween2000and2013, andnowaccountf ormor ethanone
quarterofI ndi
ancoal use.Thermalcoal i
mpor tsi
ncreasedf rom 10mi l
li
ontonnesi n2000to
81mi lli
ont onnesin2010and142mi l
liont onnesin2013asI ndia
sproducti
onst r
uggledto
keeppacewi t
hdemand( fi
gur
e20) .
Fi
gur
e20:I
ndi
ascoali
mpor
ts

Sour
ce:I
EA2014f
.

In2005, Indiawasar ound90percentsel f-suf f

ici
enti ncoal suppl y.By2013, I
ndiascoal sel
f-
suffici
encyhaddecl i
nedt oaround75percent ,withther mal coal account ingf orar ound80
percentoft otalimpor ts.Ther apidr i
seint her mal coal impor tsresultedi nI ndi aov ertaking
Japanast hesecondl ar gestimpor teroft her malcoal i
n2013despi tehi gheri mpor tsi nto
Japant ohel pitsel ect r
icityindust rycopewi t
ht heidlingofi tsnucl earr eact orsaf tert he
Fukushi mai ncidenti n2011.I n2014, Indiast otalcoal i
mpor ts(includingbot ht her mal and
met all
urgicalcoal )ar eest imat edtohav ebeenar ound200mi ll
iont onnesandoncur rent
trendswi llapproach250mi l
li
ont onneswi t
hi nafewy ear s.Whi l
eChi na scoal t
radehas
beent hedr ivi
ngf or ceini nternat i
onal coal mar ketssi ncei tbecameanetcoal i
mpor t erin
2009, growt hinIndi ascoal impor tsisbecomi ngincreasi nglyimpor t
ant .Sof ar,Indonesi a
hasbeent hepr incipal sour ceofi mpor t
sast hesimilariti
esi ncoal grademakesi teasi ert o
subst i
tuteintoIndi asgener atorfleetwhi let helowcostofI ndonesi ascoal hasal somadei t
mor eappeal ingt oI ndianbuy ers( f
igure21) .Smal l
erv olumesoft hermal coal arealso
sourcedf rom Sout hAf rica,Aust r
ali
a, t
heUni tedSt ates, Colombi aandRussi a.Howev er,the
mov et obui l
dgener ator sthatempl oysuper cr i
ti
cal t
echnol ogy ,whichar er unmor eopt i
mal l
y
onhi ghergr adecoal s,andmov esbyt hegov ernmentofI ndonesi atowar dsdomest ic
reservati
onpol i
ciesar et wokeyf actorst hatmayal t
erI ndia
si mpor tsour cesi nt hef uture.
Fi
gur
e21:I
ndi
ast
her
mal
coal
impor
ts2013,
bysour
ce

Sour
ce:I
EA2014f
.
ModiGov
ernmentpol
ici
es,
ref
ormsandi
mpact
s
Indiai saf eder al republ i
c,withsignificantpower sv estedi nthe28St ates,includingwat er,
l
anduse, andmi ner alextract
iont axes.Thecent ralgov ernmenthaspower sov erinterst
at e
trading, commer ce, rail
,andincomet ax.Howev er,somer esponsibil
iti
es,suchasel ectr
icit
y,
areshar ed.Thi sj urisdicti
onal compl exitycont ributest ot hediff
icult
iesini ntroducing
economi candpol i
cyr eformi nIndia.I naddi ti
on, theemer genceofmul ti
-par t
ycoal iti
on
gov ernmenti nI ndi aov erthepastdecadehasi mpededt hegov ernment
sabi lit
yto
i
mpl ementr eforms.I nmi d-2014, Nar endr aModi
sBhar atiyaJanataPar t
ywonI ndias
strongestel ector almandat ein30y ear sonapl atfor m ofeconomi cgrowt h, l
oweri nflat
ion
andj obcr eati
on.Nar endraModi hasahi storyofi mpl ement ingreformsi nt hestateof
Gujar at.Thishasr enewedopt imi sm int heI ndianeconomyandi ncreasedexpect ationst hat
stall
edcapi talpr oject smi ghtfinall
ybedev eloped.

Animpor tantfirststeptoi mpr ovi

ngper formancei ntheener gysectorhasbeent he
appoint mentofasi ngleMi nister,
Pi yushGoy al,
toov er seetheMi ni
stri
esofCoal ,Powerand
NewandRenewabl eEner gy,wher eco- ordinati
onandco- operati
onbetweent hemi ni
stri
es
havenotbeenst r
ongf eatures.Bet weenNov ember2014andear l
y2015, theModi
Gover nmentannouncedanumberofv eryambi ti
ouspol icyandprogram targetsov erthe
nextf i
v etosev eny earstohel pachi ev eitseconomi c, socialandenvironment algoals.The
Gover nment senv i
ronment al goalsar enotcur rentl
yt ar geti
ngcarbonemi ssionsandar e
mor ef ocusedont hedepl oymentofr enewabl eenergyt echnologi
esandi mpr ovi
ngener gy
eff
iciency .Thepl ansf orrapidlydev elopingrenewabl eener gydonotsi gnalamov eaway
fr
om coal ; concur r
entlytheGov er
nmenthasannouncedpl anst oal
mostdoubl eit
scoal
outputt oonebi ll
i
ont onnesby2020.

TheI ndianGov er
nmenthasf requentl
yannouncedambi tiousgoal sandr efor
m plans,but
i
mpl ement ati
onanddeli
v er
yhasof t
enlaggedbehindt argets.Expect at
ionsforthenew
gover nmentareundoubtedlyhigh;thechall
engewillbet odeliveront heirambit
iousplans.
Theoppor t
unit
yforapoli
cyl edreform pr
ocesstor apidlyimprov eenergy ,
economi cand
social out
comesi namajoreconomyhasnev erbeengr eater,arguablysincethereformsin
Chinaatt heendofthe1970s.I tremainstobeseeni fthenewgov er
nmentcanemul atethat
success.

Economi
cdevel
opment
TheModi Gov ernmenthasbeenunderpr essur et or eturnIndi
at oastrongereconomi c
growtht rajectory.Inresponse,ithasbeendesi gningr eformsandpol i
ciestopr omotegrowth.
Thisincludest heimplement ati
onofadmi nistrati
ver eformstoreducebur eaucracy,r
educe
orimpr oveappr ovalti
mesandexpedi t
epr ojectdev el opment.Inaddit
ion,theFinance
Minister,ArunJai t
ley
, announcedsev eralmeasur esi nt heUnionBudgetintendedt opromote
growthandi nv estmentsuchasi ncreasedexpendi tur eoninfr
astruct
ure,taxincenti
vesfor
savingsandi nv est
ment ,andraisingforei
gndi r
ecti nv estmentli
mitsinsectorssuchas
rai
lway s(Modi 2015; UnionBudget2015) .

Aspar
tofitsgrowthobjecti
ves,theGovernmenthasplanstot
ransf
ormIndiaint
oanew
manuf
acturi
nghubt hr
ought heMakei nIndiaprogr
amme.Makei nI
ndiahasbeendesigned
tof
aci
li
tat
einvestment,encourageinnovati
on,prot
ecti
ntel
l
ect
ualproper
tyr
ightsand
developwor l
dclassmanufactur
inginfr
astructure.Aspartofthisini
ti
ati
ve,smartcit
iesand
i
ndust r
ialcl
ustersarebei
ngdevelopedinidentifi
edindustr
ialcorr
idor
s.Therearefivesmart
cit
iesunderdev el
opmentintheDelhi-
Mumbai Industr
ialCorr
idorDholer
a,Shendra-Bi
dki
n,
GreaterNoida,Ujj
ainandGurgaonandt hreeindustri
alnodesint heChennai
-Bengalur
u
Industr
ialCorr
idorPonneri
(TamilNadu),Krishnapatnam (AndhraPradesh)andTumkur
(Karnataka)(
Makei nIndi
a2015).

Foll
owi ngonf r
om theMakei nIndiaprogramme, Mi
nisterJaitl
eyannouncedtheSkill
sI ndi
a
programmei nthe2014budget .Theprogrammei nt
endst oincreasetheemployabi
lit
yof
I
ndiasy outhandaddr essski l
lsshortagesthatarel
imiti
nggr owthinIndia
smanufacturing
i
ndust r
ies.I ndi
ahasav eryyoungwor kfor
ce,withmoret han12mi l
li
onnewent r
antstot he
l
abourmar keteachyear .Howev er,
only2percentoftheseent rantshavecert
ifi
edskil
ls.
Thisprogr ammewi l
lincludevocat i
onaltr
aini
ngtodev el
optheski l
lsrequir
edinthe
manuf actur i
ngsector(Dhoot2014) .

Accesstolow-cost,
rel
iabl
eelectri
cit
ywillbefundamentalt
ot heexpansi
onofIndi
a
s
manufacturi
ngindustr
yinorderforittobeint
ernati
onall
ycompet i
ti
ve.AsIndi
a
seconomy
devel
ops,andthesizeofthemanuf acturi
ngsectorexpands,growthinI
ndia
sener
gy
consumptionisli
kel
ytoaccelerat
e.

Ener
gyandel
ect
ri
cit
y
Whiletheroleofgov ernment-ownedenterpr
isesinI ndia
senergysectorhasdecl i
nedaf tera
seri
esofmar ketr ef
ormsov erthepasttwodecades, centr
alandst at
egov ernments
conti
nuet oexer cisepervasiv
einfl
uenceonitv iapolicysett
ingsandr egulati
ons.Histori
call
y,
Indi
asenergypol i
cyhasbeendomi natedbyt hreemaj orobject
ives:energyaccess, ener
gy
securi
ty,andr educingenv i
ronmentali
mpacts( throught hedeploymentofr enewableand
energyeffi
cientt echnologi
es).Whil
esuchobj ecti
v esarebynomeansuni que,t
heircontext
andimplement ationhavetakenonauni quel
yI ndi
anf l
avour
.

Iti
sestimatedt hataroundaquar terofI
ndia
spopul at
ion,ar
ound300mi ll
i
onpeople,donot
haveaccesst oel ectr
icit
y.Thisisclear
lyamaj orbarri
ertoeconomicandsocial
progress,
andassuchpr ov i
dinguniversalaccesshasbeenamaj orpri
ori
tyforpol
icy-
makers.The
Modi Governmenti spr ogressi
ngwi thplanstoensureadequateelect
ri
cit
ysuppl
y ,
while
acknowledgingt hatintheshor ttomedium termt hi
smaynotbeacont i
nuoushighquali
ty
24/7servi
ce, noronebasedongr idint
erconnecti
on.

Indi
ahasempl oyedaser i
esofFi veYearPl ans(FYP)t ogui deeconomi cdev elopment( box
4).Intheenergyar ea,I
ndi a
sobj ect
ivesint heFYPshav etendedt obeunder -ful
fil
led.For
exampl e,duri
ngt heper iodoft heElevent hFYP, endingi n2012, India
sel ectr
icit
ycapaci t
y
i
ncreasedby55gi gawat ts.Whi l
eani mpr essiveincreasei ncapaci t
y ,t
hiswasonl yaround70
percentoft het argeted80gi gawat ts.Thecur r
entTwel f
thFYP, whichi sschedul edt oendin
2017, hasanumberofnewf eaturesthatdi ff
erfrom pr evi
ousFYPs.I tincludespl ansfor
greaterparti
cipationbyt hepr i
v atesectorbasedont hedev elopmentofsev eral v
er yl
arge
4000megawat tcoal -
fi
redpowerpl ants.Thesepr ojectswi llusemor eeffici
entsuper cri
ti
cal
technologythatwi llgener al
l
yr equir
ehi gher -
quali
tyimpor tedcoal .Thef i
rstoft hesepr oj
ect
s,
Mundr a,wasdev elopedbyTat aPoweri nGuj ur
atandhasbeeni noper at
ionsi nce2012.
Despitetheuseofadv ancedt echnology ,theplantsar estil
l notoptimisedast heyar e
conf
igur
edtorunonlow-ener
gycoal
import
edf
rom t
hecompanysI
ndonesi
anmines(Tata
PowerhasstakeinPTKalt
im Pr
imaCoal
andPTArutmi
nIndonesi
a)wherei
tcansecure
coal
atalowpr i
ce(Kumar2014).

InorderforIndi atoachieveincreasedel ect

ri
cit
yaccess, whil
emeet i
ngenv i
ronment algoals,
thewi derroll
-outofsuper cr
it
icalt echnologyorbet t
erisessential.Whi l
emor eadv anced
technologyisbei ngint
roduced, pr ogresshasbeensl ow.Indiaspr ogr ammest oensur ethat
allnewpl antshav eeff
icienci
esconsi stentwit
hsuper cri
ti
calorul tra-supercri
ti
cal t
echnol ogy
arenotexpect edtobecomeef fect i
veunt i
l2017( I
EA2015) .Tot hisef fect,
aroundhal foft he
coal-f
iredgener ati
oncapaci t
ylikelyt obecommi ssi
oneddur i
ngt heTwel f
thFYPi sexpect ed
tobebasedonsuper crit
icaltechnol ogy.Howev er,t
hisimpli
est hatt heot herhalfofnew
capacitywi l
lbebasedonsubcr i
tical t
echnology,whichisunlikelytobedecommi ssioned
before2040.

Box4:I
ndi
asFi
veYearPl
ans

Li
keChi na,I
ndiasstrategi
cpl anni ngforeconomi cdev el
opmenti scarriedoutt hr
oughFi ve-
YearPlans(FYP) .TheFYPcont ainstargets,poli
ciesandpr ogrammesdesi gnedtoachi eve
str
ategi
ceconomi cobjectives,suchasheal th,educati
onandt heprovisionofinfr
astructure,
overthedurati
onoft heplan.Thet argetsneedt obeinternall
yconsistenttoensur ethe
opti
mal useoft helimitedresour cesatt hegov ernmentsdisposal.I
ndiasfir
stFYPwas
l
aunchedi n1951; theyarecur rent l
yupt otheirTwelft
hFYP, whichisschedul edtorun
between2012and2017.

ThePl anningCommi ssion,nowt heNat ionalI

nst i
tuteforTr ansf ormingIndia,hasbeen
responsibleforthedev elopmentandi mplement ati
onofI ndi asFYP.Thepr ocesshasmov ed
from beingat echnicalexerci
seunder takenbyt heCommi ssi ont oinvolv
inggreat er
stakeholderparti
cipati
onasci vilsocietybecomesi ncreasingl yawar eandv ocal onissues
regardingIndia
sdev el
opment .Int hepreparati
onoft heTwel fthFYP, thePlanning
Commi ssi
onconsul tedwi thcentralandst at
egov ernment s, sect or
alexpertsandci vil
society.

Aspar toft hesepl ans,theI ndianGov er nmentai mst oat t

ractar oundUS$250bi ll
ionof
i
nv estmenti nthepowersect oroverthenextf i
v eyears.Ther ear ecur rentl
ymaj orbarriersto
ener gyinvestment ,suchaspr i
cecont rolsintheel ectr
icit
ysect or,andv eryhighlosses
betweengener at i
onandconsumpt i
onpoi nt
s.Someoft hisinv estmentwi l
lbedirectedt o
i
mpr ovi
ngt ransmi ssi
onef f
iciencybyi mpr ovingt henational powergr id,andfacil
itat
ingmor e
widespr eadpowersour cessuchassol arandwi ndgener ati
on.Thi sr equir
esasubst ant i
al
i
ncr easeinf orei
gni nvestmenti nIndiawhi chwi llbechal l
engi ngbasedoncur rentforeign
i
nv estorappr ehensionov ermar ketpricecont rols,regulat
orysy stemsandexchanger ate
mov ement sinIndia.Stateel ectri
cit
ydi stri
butioncompani esar eal ogicalsourceforatl east
partoft hisinvestment ,butt heirbal
ancesheet sandcur rentf inancial posi
ti
onar eunlikelyto
suppor texpansi onsunt ilpri
cecont rolsar erelaxedandmov esar emadet oreducepower
theftfrom theirnet works.

Cl
imat
echangeandr
enewabl
es
I
ndi
aist
hewor
ld
sthi
rdl
argestemi
tt
erofgr
eenhousegases;
howev
eronapercapi
tabasi
s
i
tismuchl owerdownt heworldranki
ngsatar
ound140.Balanci
ngeconomicgr
owth(and
subsequentincr
easesinenergyconsumpti
on)whi
lel
imit
ingcarbonemissi
onswil
lbea
si
gnifi
cantchall
engeforI
ndia.

Wi t
hint heUni tedNat i
onsFramewor kConv enti
ononCl imat eChange( UNFCCC)cont ext,
Indi
a, asanAnnexI Icountry
, hasnobi ndingcar bonreduct i
onobl i
gati
ons.Howev er
,ithas
commi ttedtor educeitscarboni ntensit
y( t
hatiscarbonemi ssionsperunitofGDP)byat
l
eastonef i
fthfrom 2005l evels,by2020.Thi sdoesnoti mplythatitwill
decreaseit
suseof
fossilfuels,butmor elikel
ythati twill
becomemor eefficienti
nusi ngthem.Forinst
ance, t
he
rolloutofadv ancedcoal gener ati
ontechnol ogi
eswi l
ldeliverreducti
onsincarbonemi ssi
ons
perkilowat thourofel ectr
ici
typr oduced.Ther eforecarboni nt
ensitycouldbereducedwhi l
e
overallcoal consumpt iongrows.

Thetotalvol
umeofI ndiasemissi ons,althoughsmal linpercapitaterms, i
sli
kel
ytocome
underscruti
nyinthelead-uptot hePar isConf erenceofParti
es( COP)att heendof2015.I
n
part
icul
ar,I
ndia
sINDC( intendednat ionallydeterminedcontri
bution),sett
ingouti
ts
approachtogreenhousegasmi tigati
on, wi l
lprovi
deani mportantguidet otheModi
Governmentspol
ici
esi nthisarea.Ther eleaseofIndia
sINDCi sexpect edinSept
ember
2015.

TheIndianGov ernmentisheav i
lypromotingt hedev elopmentofr enewableenergy
technologi
estoachieveitsenv i
ronmental goals,incl
udingairpollut
ionasairquali
tyi
nciti
es
suchasDel hii
sr api
dlydeteri
orati
ng.Someoft henewandr enewabl et
echnologybei
ng
developedwil
l beint
egratedintolocalordistri
but edenergysy st
ems, usi
ngbat t
eryst
orage
andef f
ici
entend-usetechnologiessuchasl ighting,todeli
verpowert omor eremoteareas.
Inadditi
on,di
rectuseofsol arpower ,
inapplicationssuchassol arpoweredwaterpumps,
wherepowerst orageislessofani ssue,i
sal sobei ngencour aged.

TheGov er
nmenthassetat argettoincr
easet heinst
all
edcapaci t
yofrenewable
technol ogi
esto175gi gawat tsin2022(fr
om ar ound65gi gawattsi
near l
y2015) .Thi
sis
expect edtocompr i
se100gi gawat t
sofsolar,60gigawattsofwind,10gigawattsofbi omass
and5gi gawattsofmi cro-hydro.Toachievet hi
s,ther
ear eplanstoattr
actaroundUS$100
bil
li
oni nf i
nancetodev elop1618gi gawattsofsolarandwi ndcapacityayear.The
developmentofsol arphot ovoltai
c(PV)isexpectedt oaccountforaround10gi gawattsof
thi
st otal.I
nachievingthist arget,I
ndiawouldneedt omat chthepaceofChi na
ssol arPV
i
nstallationoverthepastf ewy earsanddeploy1013gi gawat t
seachy ear.

Tounder pint heseenergyi nvest

ments,theIndi
angov ernmentisint
roduci
ngsev er
al
measur est oat t
ractpri
vateinvestmentthroughthet axationsyst
em suchasanew80per
centaccel erateddepreciati
onallowanceannouncedi nMay2014.TheGov ernmentisalso
encouragingt het op250t axpay i
ngenti
tiestout
ilisetheirstr
ongbalancesheetstobui l
d
newr enewabl epowerpl ant sandlowertheirt
axliabil
iti
est hr
oughacceler
ateddepreciati
on
oftheirrenewabl eassets.CI LandtheNTPCar ebot hci tedasexamplesofentit
iesthatare
i
nvolved, withCILcommi tti
ngUS$1.2bill
iontonewPV.

Ift
hesolartar getisachi
eved,poweroutput,assumingacapacit
yfact orof25percent,coul
d
accountfornear l
y10percentofI ndi
a
spowergener at
ionbythemi ddleofnextdecade.
Rapidl
yfall
ingsol arpanelcost
s,ther
elati
velyshortl
eadtimesforinstall
ati
on,andthehigh
val
uesolarr esourceinmanyr egi
onsofIndia,maket hi
splanappealing,butal
so
undoubt edl
yveryambi ti
ous.Globall
y,thel
ev eli
sedcostofel ectri
cit
yofsolarpowerhas
fall
enbyar ound40percentsi nce2010, asrapidr isesinsol ardeployment,whichincreased
ten-f
oldsince2008,allowedeconomi esofscaleinmanuf acturi
ng,part
icul
arlyinChina.
Foll
owi ngthepatter
nofot hernewt echnologies,furthercosti mprovementscanbeex pect
ed.
Indi
asdeploymentofsol arandwi ndpowerwi l
lfacet hecont inuedproblem ofint
ermi tt
ent
supply.Signi
fi
cantelectri
cit
ystoragecapacityandf l
exibl
egener at
ioncapacitywil
lbe
requir
edbef oresuchrenewableener gysourcescanbet reatedasdi r
ectsubst i
tut
esf or
fossil
fuels.

TheUni t
edSt at
esi ssupport
ingIndi
asrenewabl eener
gydr i
ve,i
nthecont extofit
ssupport
forit
sactiononcl i
mat echangeandener gy.InJanuary2015, t
heUS-I
ndiaj ointst
atementon
cli
mat eandcl eanener gyco-oper
ati
onwassi gned.TheUni t
edStat
eshaspl edgedtoexpl
ore
fundingoptionsf ortheambit i
oussolarPVt ar
getinconjuncti
onwiththeIndi anRenewabl
e
EnergyDev elopmentAgency .TheExport-I
mpor tBankisalsoexpl
ori
ngpr ojectsworthupto
US$1bi l
li
on.Fur therresear
chonaf fordabl
esol arener
gy,energyef
fi
ciency ,andadvanced
biof
uelsisal sopar tofthi
ssupport.

Mi
ningandf
uelsuppl
y
Ther apidgr owt hofcoal importshasbecomeapr i
meconcer nt ot henewgov ernment
becauseoft heper ceivedr eductioninener gysecur i
tyandt hehi ghcostofi mportsrelativ
eto
l
ocal cost s(althought hehi gherener gycont entofi mpor tedcoal offsetsthistosome
degr ee).Mi nisterGoy al hastargeteda15percentay eari ncreasei nCI Lproduction,equal t
o
adoubl ingofcoal out putt onear l
yonebi ll
i
ont onnesay earbyt heendoft hi
sdecade.I ft
his
targeti sachi eved, local outputwoul dbesuf fi
cientt omeetr i
singdemand( l
i
kelytogr ow
near lyonet hirdby2020)andt heneedf orimpor tsnegat ed.Howev er,giventhetrackr ecord
ofr ecentpr oduct iongr owt h(l
esst han2percentay ear),plust henecessi t
ytospeedi lyopen
newpr oduct ionar eas, andbui ldnewt ransportlinks, t
hisappr oachcanbev i
ewedas
ambi ti
ous.Af urtherchal l
engef orIndiasdomest i
ccoal indust rywi llbeitsabil
it
yt osuppl y
fuel forthemor eadv ancedcoal -f
iredgener atorsthatar ebei ngr olledout .Thesegener ators
arei ncreasingl yempl oy i
ngsuper crit
ical,orbetter,technol ogi
est hatwi l
loperateopt i
mal l
y
whenf uel l
edwi t
hcoal t hathashi gherener gycont entandl owerasht hanmostI ndiancoal
minespr oduce.

Thegov er
nmenthasrecogni
sedthatakeypartofanymov est
or ai
secoalout
putwil
lrequi
re
i
ncreasedpr i
vat
esect
orpart
ici
pat
ioninthemini
ngandsaleofcoal,butef
fort
stodatehave
beenhinderedbytheSupr
emeCour t
sdeci
siontocancel
exist
ingcapti
vecoalbl
ockl
icences.

I
nOct ober2014,thegov ernmentannounceditsintenti
ontoweakenCI Lsnearmonopol yon
miningandt hir
dpar t
ysal es.I
nresponse,uni
onsencour agedwidespreadindustri
alact
ionin
Januar y2015.Nonetheless, t
heMOChasannouncedpl anstoaucti
onof f100coal
product i
onblocksin2015, withafurt
her100in2016.By2020, i
tisenvisagedthatmoret han
onet hir
dofIndiancoalout putwil
lcomef rom t
hepr iv
atesector
,orstategovernments.The
governmenti salsosell
i
ngaf urt
her10percentst akeinCIL.

Inordert
opr omotear apidincr
easeindomest i
cproducti
on,proposalsareunderwayto
speedupenv ir
onment alcl
earances,andlandacqui
sit
ionprocedures.Forexample,i
tis
proposedthatproceduresrequir
ingapprovalof70percentoflandownersforland
acquisitionwill
beeasedf orcertai
ncorri
dor
sandmi neraldev elopments,butthese
proposal sneedPar l
i
ament aryapprov
al.Whil
etheamendment stotheLandAcqui si
ti
onAct
havepassedt hroughthelowerhouse,theModi Governmenthasbeenunabl et opasst he
l
egislationthroughtheupperhousewher etheopposi ti
onhav ecl ai
medt hatthelegisl
ation
i
mpedesont her i
ghtsoffarmersandthepoor.TheBi llmayber efer
redt oajointcommi tt
ee
totryandachi eveconsensus.Changest opri
cingpolici
esf orcoal arealsodesignedt o
encour agemor eeffi
cientmining,l
owerashcontent
, andinv estmenti nwashingand
beneficiati
on.

Reformsar ealsopromisedinthegov ernment-

runrai
lsector,wi
thplansfordedi
catedrai
l
fr
eightcorridor
s,notabl
yintheeasterncorri
dor,whi
chisimpor t
antforcoalmovements.
Howev er,thecrosssubsidybetweenpassengerandf r
eightusers,whi
chkeepsfrei
ghtrat
es
hi
gh, needst obeaddressed.Thissubsidycandist
ortl
ocationalchoi
cesforcoal
-fi
redpower
pl
ants, andfavourpl
antsclosetomi nes,oronthecoastusingimportedcoal.
Out
lookf
orI
ndi
ascoaldemand,
suppl
yandt
rade
I
ndiascoal consumptionhasbeengr owi
ngatsomer emar kabl
er atesinr
ecenty ears.Inthe
neartermt hisisshowingf ewsignsofchangingasi nvest
menti nnewcoal -fi
redelectri
city
generati
ngcapaci t
ycont inuestogrowatrobustrates.Inthelongert er
m,howI ndia
respondst otheinter
nationalmov etoaddresscl
imat echangepr ov i
desgreateruncertaint
y
i
nt heoutlookf ori
tsenergysectorandcoal market.Thischapterr evi
ewsthepr oj
ectionsfor
I
ndiasenergyandcoal useintheIEAsWor l
dEnergyOut l
ook( WEO)2014.

TheI
EAWor
ldEner
gyOut
look
TheI EAWEOpr ovidest hr
eescenar iosf orlongt erm ener gyuseandt hemi xofsour cest hat
wi l
l supplyi t
.Thef ir
stistheCur rentPol i
ciesScenar io(CPS) ,whichisessent ial
lybusiness
asusual andpr ojectsthetrajectoryforener gyconsumpt ionandpr oductionbasedon
economi c, energyandcl imatechangepol i
ciest hatar ealr
eadyi nplace.Thesecondi st he
NewPol i
ciesScenar i
o( NPS)whi chist heIEA scent ralscenarioandt akesint oaccount
announcedpol ici
est hatarey ettobeenact ed.Forex ampl e,i
tincludespol i
ciesannounced
byt heUni tedSt atest oacceleratethedecl ineofcoal -f
ir
edel ectr
icit
y,whichwi l
ltakeef fect
from 2017att heear l
iestandannouncedmeasur esbyChi nator educelocal poll
ut i
onand
l
imi tcoal use.Thet hir
dscenar io,t
he450scenar i
o,model sawor ldwher ecar bonemi ssions
arel imit
edt olevelsconsistentwi t
hgl obal temper aturesincreasingbyj ust2degr eesCel sius.
Thi sscenar i
oout l
inesasetofpol i
ciesandact i
onst hatwoul dpr oduceat raj
ect oryofener gy
relat edgreenhouse- gasemi ssionsconsi st
entwi t
ht hisinter
nat i
onalgoal.Inpar ti
cular,
car bonpr icingisassumedt obewi delyadopt edafter2020, althoughnoti nIndia.

TheIEAmakeanumberofkeyassumpt i
onsforI
ndi at
hatinfl
uencet
heprojectedresul
ts.I
n
termsofmacr oeconomicindicators,I
ndiasGDPgr owthi
sassumedt oaverage6percenta
yearandurbanisati
onrateisassumedt obeal most50percentby2040( upfrom lessthan
one-t
hir
dtoday )
.Iti
sassumedt hatIndia
spopulationwil
li
ncreaseby0.
8percentay earto
1.57bil
l
ionby2040.I ndi
a,alr
eadywi thapopul at
ionlar
gerthantheOECD, i
spr oj
ectedto
overt
akeChinaast hemostpopul ouscount r
yearlyint
hepr oj
ecti
onper
iod.

Thekeypol ici
esinI ndi
athatwer eincl
udedi ntheNPSwer e:thecommi t
mentt or educeCO2
i
ntensityby20percentby2020compar edwith2005; r
enewabl eenergysuppor tpolici
esand
target
s;mandat oryimprov ementsincoal -f
ir
edplanteffi
ciency;andthephaseoutofal l
fossil
fuelsubsidiesby2025.Ot herprogr amstoenhanceener gyeffi
ciency,i
ncluding
mandat oryappli
ancest andards,buil
dingcodes, andindustri
alenergyeffi
ciency
i
mpr ovement swer ealsomodel l
ed.Int he450Scenar i
o,carbonpr i
cesar eassumedt o
becomewi despread,andbeadopt edinal lOECDcount ri
es.Whi lecar
bonpr i
cesar e
assumedt obegr aduall
yimplement edinsev er
al maj
ornon- OECDcount ries,i
ncludingChina
l
aterinthepr oj
ect i
onperiod,t
heyar enotadopt edinIndia.

El
ect
ri
cit
ygener
ati
on
Thepowersect
oristhekeytounderstandi
nggrowt
hinIndi
ast
hermalcoaldemand.Inthe
I
EAsCPS,coal
-f
ir
edpowerincreasesto2800TWh,accounti
ngformorethantwo-t
hir
dsof
I
ndia
spowerdemandofmor et han4000TWhby2040.IntheIEA
sNPS, I
ndia
sel
ectri
cit
y
gener
ati
onispr
oject
edtoincreaseatalower,
butsti
l
lsubst
anti
al,av
erageannual
rateof4.3
percentto3787TWhi n2040.Whi l
eelectr
ici
tygenerationisproject
edt ogrow, t
he
emissi
onsintensit
yoft heelect
ri
cit
ygenerati
onsect orisproject
edt odecli
ner ef
lect
ingthe
i
ncreasedshareofr enewableandnucleartechnologiesintheelectr
ici
tymix,andan
assumedincreaseincoal -
fi
redpowerplanteffi
ciency(figur
e22) .Nevert
heless,coalusein
Indi
asti
lli
ncreasesintheNPS.

Fi
gur
e22:I
ndi
asel
ect
ri
cit
ygener
ati
onbysour
ceandCO2i
ntensi
ty,
NewPol
ici
esScenar
io

Sour
ces:I
EA2014d;
IEA2014g;
IEA2014a.

I
ndiaselectri
cit
ygener ati
oni sprojectedtoexceed2100TWhi n2025, whichismor ethan
thecurrentoutputofJapan, SouthKor eaandAust ral
iacombi ned.Refl
ecti
ngt heplanned
l
arge-scaleinvestmenti nrenewabl etechnologies,generati
onf rom newrenewabl esources
i
spr oj
ectedt ogrowr apidly,
wi thwindandsol aroutputtri
pli
ng.Coal cl
earl
yr emainsthe
mainpowersour ce,without putprojectedtoincreasebynear ly500TWh, ormor ethanthe
Unit
edKi ngdom scurrentout put.Therefor
et herelati
veshareofcoal i
ntheel ect
ri
cit
ymi xi
s
proj
ectedt odeclinealbeitwiththeuseofcoal st
il
lincreasi
ngsubst anti
all
y.

By2040t heNPSpr ojectst hatIndiaspowergener ationwillmoret hant rebl

e, growingat
around4. 3percentay ear ,driv
enbyst eadypopul ationandeconomi cgr owth.Nonet heless
percapitapowerusei spr oject
edt or emainl ow,atonl yaroundone- fi
fthoftheOECD
average,anduniversalaccesst oel ectr
icit
yisbynomeansassur ed.Renewabl es,l
edby
solarPV( for
ecasttogr owt onearly200TWhorar oundAust rali
a
st otalpowerout put),wind
andhy dropower,arepr ojectedtoaccountf or27percentoft heelect r
icit
ygener ationmi xin
2040,from around15percenti n2012.Gas- fir
edel ectr
ici
tygenerat ionisproject edto
accountf or12percentofI ndiaselectri
citygenerat i
on.Nucleargener ati
onisal sopr ojected
togrow, especi
all
ypost -
2020, whenannual capacityadditi
onsar et argetedtor each1. 5
gigawatts.Despit
epr ogressi ndi v
er si
fyingthegener ationsector,coal isprojectedt or etai
n
i
tsdomi nantrol
e,alt
houghitsshar
ewill
fallfr
om almostthreequar
ter
s,towar
dsalit
tl
eover
hal
f.Inabsoluteter
mscoal -
fi
redpoweri
spr oj
ectedtomor ethandoubl
eintheNPSand
i
ncreaseatar ateof3.3percentayear
;from 840TWh( roughlyf
ourti
mesAustral
i
astot
al
powerout put
)tonearly2100TWh.

IntheIEAs450Scenar i
oIndi
astotalel
ect
ri
cit
ygenerationgrowsbyasl ower ,
butstil
lhi
gh,
rateof3.6percentay earwit
ht hi
slowerrateunderpi
nnedbymor estringentenduse
effi
ci
encymeasur esthatreducepowerdemandgr owth.Aft
erincr
easingov erthecoming
decade,coal-
fir
edpoweri sproj
ectedtodecli
ne,meetingonly18percentofpowerneedsby
2040.Deliver
ingthi
sreducti
onr equir
essomesi gni
fi
cantgrowthinothergeneratingsour
ces
from cur
rentlevel
s.

Toachi evethe450Scenar io, I

ndiasnuclearpowercapaci tywoul dneedt ogr owbyaf actor
of13f rom it
scur rentlevel sot hatIndiaoper atesanucl eari ndustryaroundt hesamesi zeas
France scurrentfleet(around58r eactorswi t
h63gi gawat tscapaci ty
).Onav erage,India
woul dneedt ostart23nucl earreactorsev eryy eartodel ivert hi
sby2040.Hy dropower
capaci tyinIndiaincreasessi x-f
oldinthe450Scenar i
of rom i tscurrent42gi gawat t
st o194
gigawat t
sin2040.Theav ailabili
tyofwat eraswel last hedi stanceofI ndi aspot ent
ial hydro
schemesf r
om keyel ect
ricityconsumpt ionar easar eli
kel ytobesi gnif
icantchal l
engest o
over comei ndel i
veringsuchanexpansi oni nhy dr opower( UNEPFI2010) .Bioener gy
i
ncr easesbyaf act orofsev enfrom al owbaseof6gi gawat tsin2012t o40gi gawat tsin
2040.Wi ndpowercapaci tywoul dneedt obeexpandei ght -foldfrom 18gi gawat tsi
n2012t o
141gi gawattsin2040.Sol arPVandconcent ratedsol arpower( CSP)woul dneedt opr oduce
around400TWhi n2040i nt he450scenar i
o, doubletheal readyambi t
iousl ev elsprojected
i
nt heNPSand200t imeshi gherthancur rentlypr oduced( 2TWhi n2012) .

Achi evi
ngt he450Scenar ioforIndiawouldbeexcept i
onall
ychal l
enging.I
twouldr equi
rea
signifi
cantshifti
ngov er
nmentpol icyandverysubstanti
alandsust ai
nedinvestmenti n
renewabl etechnologies.Themaj orit
yofthesechangeswoul dneedtooccurr apidl
yinthe
period2025t o2040,ast hemaj ori
tyofnewpl ants(
most l
ycoal-fi
red,fi
gure23)ar eeit
her
underconst r
ucti
onorcommi ttedbef oret
hatdate.I
naddition,t
hepr ematureclosureof
somer elat
ivel
ynewcoal -
fi
redcapaci tywoul
dal mostcert
ainlyberequiredtoachievethis
ambi ti
ousgoal ,f
urtherexacerbatingeconomiccost sandcr eat
ingsomeuncer t
aintyamong
i
nv estors.
Fi
gur
e23:I
ndi
asel
ect
ri
cit
ygener
ati
oncapaci
tyunderdev
elopment>50MW

Sour
ce:Ener
dat
a2015,
www.
ener
dat
a.net
.

Wor
ldcoalconsumpt
ion
Unsurprisingly, t
heIEAsthreescenar iospr oducewidel ydif
ferentout comesf orbothwor l
d
andIndiascoal consumpt ion( fi
gure24) .Thediff
erencesbet weent het hreescenar i
osf or
coaldemandar ethelargestforanyf uel i
ncludedintheWEO, refl
ectingt hegener al
lyheld
posit
iont hatt hepowersect ormustmaket helargestearlycont ri
butiont odecar bonisi
ngt he
energysect or, andthatcoal isthel ar
gestpowersect orfuel,andgener al
lythemostcar bon
i
ntensive.Int he450Scenar i
o,globalcoal demandi spr oj
ect edtodecl i
nebyat hi
rd,enti
rely
aft
er2020; whi leintheCPScoal useincreasesbyar ound50percent .Ther angein
outcomeshi ghl i
ghtsthedi f
ficult
ywi t
hsi multaneouslyaddr essingener gypov er
tyand
cl
imat echange.I nemer gingeconomi eswher ecoal dependencei shigh, thegoalsof
i
mpr ovedenv ironment aloutcomesv i
ar educingcoal use,whi l
eext endingandenhanci ng
powersuppl yt ogrowingpopul ati
ons,willremainchal l
enging.

Ther ear ewi der egi

onal dif
ferencesi ntheI EAsscenarioswhi char eindicat iv
eoft he
di
ffer entener gyneedsofadv ancedandemer gingeconomi es.I
nt heNPS, OECDdemand,
al
readybar elyaquar terofglobal coaldemandanddecl ining,i
spr ojectedt of all
byat hir
dby
2040, whilenon-OECDdemandi spr oj
ectedt ogr owbyasi mil
arr ate.I
nt he450Scenar i
o,
OECDcoal usei sprojectedtodecl i
nebymor et hanhalf
,whi l
enon- OECDconsumpt ionis
project edtogr owf oradecadeorsobef oredecl i
ningt
oar oundt hreequar tersofcurrent
l
ev els.Ev enwi thint
henon- OECDgr oup,thelargestcoal usersarepr oj
ect edt oexhibit
di
ffer i
ngt rends.I ntheNPS, China,byf arthelargestcoal userglobal l
y,ispr ojectedto
continuet oincreasei tscoaluseupt o2020( albeitatmuchl owerr atest hani nthelast
decade)bef oredecliningslowlyov erthelastdecadeoft hepr oj
ect i
onper iod.Howev er,
Chi
na
scoal
consumpt
ioni
n2040i
spr
oject
edt
oremai
nabov
e2012consumpt
ion.

Fi
gur
e24:Wor
ldcoaldemand,
byscenar
io

Sour
ces:I
EA2014d;
IEA2014a.

I
ndi
ascoalconsumpt
ion
IntheNPS, I
ndi
a
scoal consumpti
onisprojectedt
omor ethandouble,incr
easi
ngatan
averageannualr
ateof2.8percent,
to765Mt oe.I
ndi
aisprojectedtoovert
aketheUnit
ed
Statesastheworl
dssecondlar
gestcoalconsumerbefore2020, andremainthesecond
l
argestconsumerafterChinaf
ortheremainderoftheproj
ectionperi
od.

Investmenti nnewcoal -fir

edgener ationcapaci tyal
readyindicat est hatt he450Scenar i
ois
unlikelyforIndi a.Furthermor e, around60percentoft hesubcr itical coal powerpl antsbeing
dev el
opedwor ldwidear einI ndia, t
hesepl ant shav eloweref f
iciencyandhi ghercar bon
emi ssionsrel ativetoot hert echnol ogi es.Theseandmanyr ecenti nv estment sar eunlikelyt
o
bedecommi ssionedby2040duet ot heeconomi ccostsandi mpactofal ossi ngener ati
ng
capaci tyinacount rytarget ingsubst ant i
alincreasesi nel
ect r
icityconsumpt ion.TheWor ld
Bank sdecisi ont oceasef undi ngf orcoal -
firedpr oj
ectsindev elopi ngcount ri
es, unl
esst here
i
snof easibleal ternati
ve, i
sl ikel ytost allt
heupt akeofmor eef ficientt echnol ogiest hathave
highercapi tal costsunlessot hersour cesoff i
nancecanbeor gani sed.Asar esul t
,
economi est hatar ebegi nningt oexpandt hei rcoal-
fi
redfleetar emor eli
kel yt oinvestin
cheapersubcr it
icaltechnol ogi es,whi chmaycont ri
butetoincr easedemi ssi onsf rom the
powersect or .
Fi
gur
e25:I
ndi
ascoaldemand,
byscenar
io

Sour
ce:I
EA2014a.

ForeignDi r
ectInvestment( FDI
)inIndia
spowersector,
previ
ouslycapped, wasr eformedi n
2013, all
owingmor eFDIandwi t
hitnewert echnol
ogi
esandhi ghereffi
ciencies.Assuch, i
n
theNPS, coal-
fi
redpoweri sproj
ectedt oi
ncreasebytwoandhal ftimes,whilecoal usei nthe
sectoronlydoubles.Demandgr owthi smorerapi
dintheindustri
alsector,whereef f
iciency
i
mpr ov ement sareless,butthesectorsti
ll
remainsonl
yal i
tt
lelargerthantwof if
thst hesize
ofthepowersect orin2040.

Ther el
ativ el
ysl owergr owthi nI ndiascoal useisunder pi
nnedbyanassumedi ncreasei n
coaluseef fi
ciency .Thiswi l
l besuppor tedbyanumberoff actorsrelati
ngt oplant
technologyandcoal qual i
ty.Ov erthepastdecade, around90percentofI ndi
ascoal -
fi
red
capacityhasbeenbasedonsubcr i
ti
cal technol
ogy .Asoutli
nedpr eviously,anincreasing
proporti
onofnewcoal -fi
redpl antsar elikel
ytobeempl oysupercrit
icaltechnologyand
eventuall
yul tra-super crit
ical technol ogy .Overt
heshor ttomedi um term, iti
sexpect edt hat
i
mpor t
edcoal wi l
lcont inuet ogai nmar ketshar
easl ar
ger,
mor eef fi
cientplantsarebui lti
n
coastalar east hatr equirehi gherqual i
tyandl owerashcont entthandomest i
cmat erialtorun
optimally.Fordomest i
c-sour cedcoal ,coalwashingcapacityandut i
li
sationshoul dincrease,
andcoupl edwi thant icipatedr eformst ocoal pri
cingandmi ni
ng,shoul draisethequal it
yof
domest iccoal output .Thesef act orsar eexpectedt ocombinet oraisetheef fi
ciencyof
Indi
ascoal -
fi
redf l
eetf rom ar ound29percentt o36percentby2040.

Whilecoalisexpect
edt odomi nateIndia
sprimaryenergyinthef oreseeablefut
ure,i
tis
explori
ngmeansofr educingther esul
tantemissi
ons,includi
ngt heuseofcar boncapture
andst or
age(CCS).CurrentI
ndianCCSact iv
iti
esareatanear lystagebuti ncl
udefeasibi
l
ity
studies,
capacit
ydevelopment, publi
cacceptancestudies,assessmentofCCSf orenhanced
oilandgasr ecovery,r
esear chi ntoadvancedpr e-combust i
onandpostcombust i
on
technologi
es,andCO2ut il
i
sat ionusingbi o-i
ndustri
al pr
ocesses( TERI2013; CCRI2015).
Thereappeart obet wokeybar ri
erstoimpl ementationofCCSi nIndia:1)al ackofaccurat
e
geologicaldatatoadequat elyassesst hel ocati
on,capacity,permeabi li
ty,
andot her
characteri
sti
csofst oragesi tes;and2)t heissueofCCSdr asticall
yincreasingt hecostof
electr
ici
tywhilereducingnetpowerout put,whichrunscount ert oIndia
sambi t
iousgoalsf
or
electr
ifi
cat
ion,especiall
ygiv ent hepresentelectri
citydefi
citandener gysituationi nt
he
country(TERI2013) .Neverthel ess,I
ndiaiscontinuingresearchanddev el
opmenti nt
heCCS
andpur sui
ngmor ecost-eff
ect iveprocesses.

Notwit
hstandingrelat
ivelysl
owgrowthingl
obalcoaldemand, anddecli
nesinimport
sina
numberofOECDcount ries,i
ncl
udingt
heEuropeanUnionandJapan, theNPSpr oj
ect
sint
er-
regi
onalcoaltradetogrowbyar ound40percenti
nener gyter
ms.Al mosthalfoft
his
i
ncreaseisprojectedtooccurby2020,sl
owinglat
eri
nt heforecastperi
od.

Althought hepr oj
ectedgai nsinIndiascoal product ionar eimpr essive,I
ndiaisprojectedto
emer geast hewor l
dsl argestcoalimpor ter,assoonas2025, dri
venbyt hecompet i
veness
andqual i
tyofi mpor t
si nsomecoast al l
ocations( fi
gur e26) .Ov ertheproject
ionper i
od,
India
sshar eoft hewor ld
sinter-
regionaltradei spr ojectedt oincreasef r
om barely10per
centt oal mostone- third.Ot herAsiancount riesar eal sopr oj
ect edtoemer geasmaj or
i
mpor tersov ertheper iodt o2040, drivenbyr apidlyincr easingcoal i
mpor t
sinMal aysia,
Thai l
and, ChineseTai pei ,BangladeshandPaki st
an, collectivelyreaching290mi ll
iont onnes
ofcoal equivalent(Mt ce)by2040, whi chislargert hanChi na sprojectedimportsatt hatti
me.
Theconj unctionofChi nese, I
ndianandot herAsi ancount r
ies coalimportscl
earlyshowst he
domi nanceofAsi anmar ketsinglobal coaltradeov erthepr ojectionperiod.

Fi
gur
e26:Wor
ldcoali
mpor
ts,
NewPol
ici
esScenar
io
Sour
ce:BasedonI
EA2014a.

IntheNPS, t
heIEAexpect
sIndonesiatoremainthelargestexporteroft hermal coal
wi t
hits
export
sincreasi
ngbymoret hanaquarteroutto2040( fi
gure27).Theneedt osuppl
yi t
s
owngr owi
ngdomest i
cenergyneedsandamov etowar dsreser
vat i
onpol ici
esar eakeyr i
sk
tothi
sprojecti
onandmayresultinl
owerexpor t
sfrom Indonesi
a.Aust rali
ar emainsthe
secondlar
gestexport
erofthermalcoalintheNPSwi t
hi tsvol
umesr i
singt oaround275
Mtcein2040t omeetthegrowingneedsf orhi
gherqualit
ycoalingr owingAsi anmar kets.

Fi
gur
e27:Shar
eofwor
ldt
her
mal
coal
tradebyt
ype,
NewPol
ici
esScenar
io
Sour
ce:BasedonI
EA2014a.

Wor
ldcoalpr
oduct
ion
Eightcountr
iesaccountfor90percentofwor ldcoalproduct
ionint heNPS,withChina,
Indi
a,
Indonesi
aandAust ral
iatogetheraccounti
ngf or70percentofwor l
dcoal pr
oduct
ionin2040
(fi
gure28).Worldcoalproducti
onisprojectedtoincreasebyar ound700Mt ceorthe
equival
entofcoalproducti
oni ntheUnit
edSt atesin2012.Mirroringtr
endsincoal
consumpt i
on,mostproductiongrowthisprojectedtocomef rom non- OECDcountri
es.

Non- OECDcoal productionispr oj

ectedtoincreaseby20percentor900Mt ceoverthe
projecti
onperiod.Indi
aandI ndonesiaareprojectedtoaccountf or60percentoft hisgrowt
h.
Thecombi nedpr oductionofI ndiaandIndonesiai sproj
ectedtoalmostdoubl eoverthe
forecastper
iod.Bot hcount ri
eswi l
lovert
aketheUni tedStatesbyar ound2030t obecome
thesecondandt hi
rdlargestcoal producers,
respect i
vel
y.Indonesiaisprojectedtobecome
alargedemandcent reint heNPS, withit
scoal usepr oj
ectedtobeequal t
ot heEur opean
Unionscurr
entconsumpt i
onby2040.Consequent l
y,al
argepropor ti
onofI ndonesias
i
ncr easedproductionislikel
yt obedirectedtothedomest icmar ket.
Fi
gur
e28:Wor
ldcoalpr
oduct
ion,
NewPol
ici
esScenar
io

Sour
ce:I
EA2014a.

I
ndi
ascoalpr
oduct
ion
I
nIndi
a,domesticcoal
out
putisprojectedtoincr
easebyar ound80percenti
ntheNPS,with
gr
owthacceler
ati
nglat
eri
ntheprojectionperi
odasant i
cipat
edref
ormsbegintotakeef
fect
.
Asaresul
tIndi
asshar
eofgl
obalout putincr
eases(f
igure28).

Givent hesl owgr owthindomest i

cpr oductionov erthepastf ewy ears,theI ndian
Gov ernmentest imat esthati tmayneedt oi mpor talmostat hir
dofi tstot alcoal
requirement s, orupt o350mi l
liont onnes, by201617( CIL2014a) .Increasedcoal impor ts
arel i
kelytoi ncreaset hecostofel ect ri
city,st
eel andcement ,asi mpor tedcoal s,alt
houghof
higherqual i
ty ,aregener all
yar oundt wot ot hr
eet imesmor eexpensiv eonawei ghtbasi s
thant hepr icecont roll
eddomest icpr oduct .CILhasacknowl edgedt hati tsfuturedelivery
obligati
onsar elikelytoexceedi t
spr oduct i
oncapaci tyandhasbeeni nv esti
ngi nforei
gncoal
asset stoensur est abl
esuppl yt oitscust omer s.It
sst r
ategytoincreasei nteresti
nf oreign
asset sincludesdi r
ectacqui siti
on, equi typar t
icipati
on,orlong-term coal off
take
arrangement s.Todat e,foreigni nvest menthasbeendi rectedtoMozambi que( CI
L2014a) .
Howev er,ithasbeenr eport edt hatt hisv enturehasnotbeenassuccessf ulashoped
becauset hecoal discoveredi nt heirMozambi quedeposi tshasnotmetqual itystandards
despi t
eI ndianpowerpl antsbei ngconf iguredt ousel owqual i
tycoal (Sengupt a2015a) .CIL
hasal soi nv estedi nSout hAf ricasLi mpopoPr ovince,andwasr eportedlyseeki ngAust ral
ian
i
nv estment s.

numberofpri
vateI
ndi
ancompani
eshaveal
sobeeni
nvesti
ngi
nforei
gnasset
s.Ther
ehas
beensomeinter
esti
ndevel
opi
ngasset
sint
heundev
elopedGal
il
eeBasi
ninAustr
ali
a.The
l
argestoft hesepr oject sisAdani
s$16. 5bill
i
onCar michaelproject.Onceithasr eceivedall
approvals,thepr oj
ectcoul dconsistofsi xopencutmi nesandf iveundergroundmi nes;a
coalhandl i
ngandpr ocessingplant;thedev elopmentofwat ersuppl yi
nfr
astructure;a189
ki
lomet r
er ailli
ne;awor ker
saccommodat ionv i
ll
ageandanai rport(DepartmentofSt ate
Development2015) .Inaddi ti
on,I
ndiani nfr
astructur
ecompanyGVKhasbeenl ooki ngt o
i
nvestint heAl phaandKev in
sCor nerpr oj
ectsintheGali
leeBasi n.Adanihasal so
developedmi nesinI ndonesi atofeedi t
spr i
vatepowerplantinGuj urat,
preferr
ingt oship
coal6000ki lomet res,ratherthanr ai
lIndiancoal 1500kil
omet r
es.Thei nvestmenti ncludes
portandr ailfaci
lit
iesi nIndia.

Inordertomeett heexpect edi ncr

easeinI ndia
scoal consumpt ion,andt or educer el
iance
onimpor t
s,theIndianGov ernmentsetat argetinlate2014t oroughl ydoubl eI ndiascoal
producti
ontoonebi l
l
iontonnesby2020.Toachi evet hist arget,I
ndiawi l
lneedt oi ncrease
producti
onbyar ound100mi l
l
iont onneseachy ear,
whi chwoul dequat et oanav erage
annualproducti
ongr owthofal most15percentay ear .Giv entheav eragegr owthofl ess
than2percentay earovert hepastf i
vey ears,meetingt histargetwillbechal l
engi ng.Ifal
l
proj
ectsproceedaspl anned, itwil
l st
il
ltakesev eralyear sbef oretheyar ecompl et edand
operati
ngatf ul
lcapacit
y.Indiawi l
l al
soneedt oconcur rentlyaddressi nfrastructure
bottl
enecksandexpandi tsr ailcapacit
ysot hatpr oduct ioncanbedel i
v eredt othear eas
whereitisrequir
ed.

Chal
lengest
oIndi
aspr
oduct
iongr
owt
h
Pr
oduct
ivi
ty

Theproducti
vi
tyofI
ndi
ascoal minesi
slowrelati
vetoint
ernat
ionalpr
oducer
s.CILproduces
1100tonnesofcoalayearforeachemployeecompar edwithPeabody
s36700t onnesand
ShenhuaEnergy
s12700t onnes(Das&Paul 2015).Thi
sislar
gelyt
heresul
toftheuseof
ol
dertechnol
ogyandproductionmethods.

I
ndiascoal minesaretypi
callyatdepthsoflesst han300met resbecauseofcostand
technologi call
imi
tati
ons(IEA2012) .Asar esult
, ar
ound90percentofI ndia
scoal
product i
oni ssourcedfr
om opencutmi nes( fi
gure29) .Al
thoughtherearehundr edsof
undergr oundcoal minesinIndia,t
heyaresmal l
-scaleandaccountf oraverylowpr oporti
on
oftotal producti
on.Alargepr opor
ti
onofI ndia
scoal r
eser
v esarelocat
edatdept hsgr eat
er
than300met res(I
EA2012) .Consequently,i
ncreasedadopt ionofundergroundmi ningand
theintroduct i
onofmor eadv ancedtechnologycoul denhanceaccesst oitslargecoal
reserves.
Fi
gur
e29:I
ndi
ascoalpr
oduct
ion,
bymet
hod

Sour
ce:CEI
C2015.

Adv ancedt echnol ogiescoul dalsoimpr ovethepr oducti

v i
tyofexisti
ngoper at i
ons.CI Lhas
beenengagi ngwi thf oreigncompani es, i
ncl
udingi nAustrali
a,toimpr ovetechnol ogyatt heir
under groundoper at i
ons( CI
L2014b) .MostofCI Lsunder groundmi nesuset hebor dand
pil
larmet hod, whichl eav esanest i
mat ed40mi ll
iontonnesofcoal int hemi neseachy ear.It
i
sexpect edt hatt hrought heintr
oduct i
onofcontinuousl ongwal lminingatsomeoper at i
ons
thatCI Lcanext ract70percentmor ecoal f
rom i
t sexisti
ngandf ut
ureoper ations.Impr oving
recov er
yatexi sti
ngoper at i
onscoul dassistCILi
nmeet ingIndiasproposedonebi l
l
iont onne
product iont ar get( Si
ngh2015; Presst r
ustofIndia2015; CIL2014b).Inf urt
hermov est o
i
mpr ovei tspr oduct i
vity
,reducecost sandr emaincompet i
ti
veagainsti mpor t
sCI L
announcedpl anst ocuti t sworkforceby30percent( 102000peopl e).Itisexpect edt hat
thi
swi l
lbeachi evedt hroughnat ural at
tri
ti
onnotr eplacingwor ker
sast heyretir
e.These
measur eswi l
l onlypr ov i
depar tofther equi
redproduct i
ongr owthandmanynewmi neswi ll
ber equiredt ost artpr oductionintheshor tter
mt oachi evet heproduct i
ontarget.

Lengt
hyappr
ovalpr
ocessesandcoor
dinat
ionacr
ossmi
nist
ri
es

Todev elopacoal mi neinI ndi

a, projectproponentsneedt oacquireland,obt ai
nmul t
ipl
e
clearances, obtai
nenv i
ronment alappr ovalandinsomei nstancesr eset
tlelocal communi t
ies.
Inaddi ti
on,suppor tinginf r
astructuret otransportthecoal toend-usersneedst obe
dev el
oped.Thi spr ocessr equir
esi nputfrom mul ti
pleagenci esacrossv ari
ousl evelsof
gov ernmentandr eflectst hecompl exinstit
uti
onal str
uctureoutli
nei nchapter1oft hisreport.
Ithasbeenest imat edt hatmor ethan15agenci esar einvolvedi
nt heclearancepr ocess.
Thisincludest heMi nistryofEnv ir
onmentandFor ests,theMi ni
stryofCoal ,andt heCoal
Cont rol
lerinthecent ralgov er
nment ;andv ari
ousst at
eandl ocalagenciessuchasmi ning,
rev
enue,
for
estdepar
tment
sandt
heSt
atePol
l
uti
onCont
rol
Boar
d(Pr
ayasEner
gyGr
oup
2013)
.

Whil
etherehasbeenani ncreasedfocusoni mpr ovi
ngcoor dinat
ion,t
hereareper sist
ent
i
ssueswi t
hinter
agencyint
eracti
onswhi chcontribut
et oext endedt i
meframesf orcoal mine
appr
ovals.Thelengt
hyapprov al
processhascauseddel ay sinnewpr oj
ectdevelopment s
andcontri
butedtoslowgrowthinpr oducti
on.Anaudi trepor tconductedbytheCompt rol
ler
andAuditorGeneral
foundthatdelaysofbet ween112y ear sfor32CI Lproj
ectsr esul
tedin
l
ostproducti
onofalmost120mi l
li
ont onnes(PrayasEner gyGr oup2013; Chatt
er j
ee2010) .

Inter
msofenv ironment al
clear
ance,del
aysstem fr
om alackofinfor
mati
onofI ndi
a
sforest
coverandbiodi
v ersi
ty.Lar
geareasofIndiahavenotbeenmappedandt hereisnodatabase
onareasconsideredtobeecol ogi
call
ysensit
iveorfr
agi
le.Accor
dingl
y,i
ttakesanextended
ti
mef orof
fi
cialstoassessappl i
cat
ionsfordevel
opment(IEA2014b).

Env
ironment
alandsoci
ali
ssues

Whi leenv ir
onment al legislationi nI ndiaexi sts,compliancei sr epor tedt obel ow.Ai rand
wat erqual it
yincommuni ti
escl oset ocoal mi nesispoor ,whi chcanhav ef l
ow- onheal t
h
i
mpl i
cations.Theenv i
ronment allobbyi nIndiai sver
yact i
veandi nsomei nst ancest heyhav e
beensuccessf ulinsl owi ngl andacqui siti
on( I
EA2014b) .Thedev elopmentofmostcoal
projectsr equirest hedi splacementofcommuni ti
es,whichpot entiallyhasr ami ficationsfor
thel i
veli
hoodsofcommuni tymember s.Al t
houghpol iciesr egardingr esettl
ingcommuni t
ies
exist,therear eindi cationst hati npr acticet hereremainpr oblemsi npr ovidi
ngcompensat ion.
Insomei nstances, af fectedcommuni tymember saredeemedi nel i
giblef orcompensat i
on
andt her emuner ationf oreligiblemember si softeni
nadequat eordel ay ed.Concer nsabout
theenv i
ronment al andsoci al consequencesofcoal mi nedev elopmentmayr esultin
i
ncr easedopposi ti
ont ot hei ndust ryinl ocal communi ti
es( Pr ayasEner gyGr oup2013) .
Cur r
entappr oval processesgener all
yr equiret heagreementofatl east70percentof
affectedl andholder s.Inacr owdedandf r
agment edsoci etysuchasI ndia, t
hiscanpr ovea
moment oushur dle.

Tr
anspor
tinf
rast
ruct
ure

Theav eragecostofcoal transport

ati
oninIndiaismuchhigherthaninothermajorcoal
producingcount ri
es.Thecostofmov i
ngcoal f
rom minesi
ntheeastt omajorconsuming
areassuchasDel hi,Mumbai orChennaiaveragesUS$1719at onne,whichi
salmosttwice
asexpensi veasmov i
ngcoal thesamedistanceintheUnit
edSt ates(I
EA2014b).Onefact
or
underpinningthishighercostisthespeedoff r
eightt
rai
nsinIndiawhichaver
agelessthan
25kilomet resperhour(Pinto2014).TheGov ernmentcommittedt oi
mprovethespeedof
fr
eighttrai
nst o75ki l
omet r
esanhouri nthe2015budget.

Aspar toft heplanstoexpandout puttoonebi l

li
ont onnes,theshor tterm pri
ori
tyforCILis
todevel opthreemajorrai
lwayl i
nest oenabl
eaccesst ocoal reservesi nJharkhand,
ChhattisgarhandOdi sha(PresstrustofIndi
a2015) .Thesepr ojectscoul dbecompl etedas
soonasend2017, andcouldfreeupasmuchas300mi l
l
iontonnesofmi ningcapacity.The
abil
i
tyt omoder niseandextendI ndia
scoaltranspor ti
nfr
astruct ur
ewi l
ldependont he
avai
labilit
yoff i
nance.TheGov ernmentisintendingt orel
ylargel yonpubl ic-
pri
vate
part
ner shipstofundrequir
edpr ojectsasint
ernal sourcesarei nsuffici
ent.Thedecisionto
openupt herail
sectort
ogr eat
erf
orei
gninvestmenti
nthe2015budgetmayf aci
li
tatethi
s
expansion,butf
orei
gninvestor
shavebeenapprehensi
vetoinvestgi
venpastef
fort
s.In
ordertoattr
actfor
eigni
nvestment,
thegovernmentmayneedt oimplementi
nsti
tuti
onal
refor
ms, suchastheint
roducti
onofanindependentr
ail
regul
ator(Kazmi
n2014).

Coalpr
ici
ng

Since2012,I
ndiahasbeent r
ansi
ti
oningf r
om asev engradepricingsy st
em basedonusef ul
heatval
uetothemuchmor ecommonsy stem int
ernati
onall
yofgr osscalori
fi
cv al
ue.The
changeinpri
cingsystem i
sexpect
edt oprovidetheincenti
vetoi ncreasecoalqual
ity
,
parti
cul
arl
yviacoalwashing.However,keycustomershav eresisteditsi
mplementation,
and
assuchslowedt hebenefi
tstobeachievedthroughthetransit
ion.

InlateApr i
l,CILannouncedi t
sintentiontosellhighqualitycoalatmar ket-basedpricesso
thatitali
gnswi ththepriceofinternational
coal ofasimilarquali
ty.SingareniColli
eries
CompanyLi mi t
ed,anothergovernment -
ownedcoal producer,hasalreadyi mplement eda
similarsystem.Followingthecont inueddecli
nei nwor l
dthermal coalpricesov ert
hepast
fewy ear
s,thehighestgradeofcoal soldbyCILi smor eexpensivethani mpor t
ed
alt
er nati
ves.Inpart,t
hehighercostofCI Lcoalisatt
ributabletohighlevies,whichinsome
regionscanaccountf oraround60percentoft hepriceofcoal .

However,mostIndiancoal-
fi
redplantscannotrunsol
elyonhi
ghquali
tycoal.I
tist
ypical
ly
bl
endedwithlowerqualit
ycoal atarati
oof30percenthighqual
it
yto70percentlowqual i
ty.
Whil
ehigh-quali
tycoali
scurrentl
ymor eexpensiv
ethanimpor
tedcoal,
thebulkofCILs
pr
oducti
oni slowerqual
itycoal,whi
chisaround3040percentcheaperthanequi
valent
i
mports(Sengupta2015b) .

Easter
nCoal fields,asubsi
diar
yofCI L,hasputf orwardaproposal
toincreasethecostofit
s
l
owerqual i
tycoal by10percent.Thepr oposalmustbeappr ovedbytheCILboard,andif
approvedislikelytobeappliedacrossal l
itssubsidi
aries(
Sengupt
a2015c) .However,
i
ncreasingthecostofl owerqual i
tycoalisasensi t
ivetopi
casitwil
li
ncreasethecostof
powergener ation,andmanygener ati
oncompani escannotaff
ordanincreasetothei
rinput
costswithoutpassi ngtheaddit
ionalcostont oconsumer s.
I
mpl
icat
ionsf
orAust
ral
ia
Coal hasbeenoneoft heprinci
palcommodi tiesthathasunder pi
nnedAust ral
ia
slatest
miningboom.Aust ral
ia
sexportsofthermal coalhaveincreasedby132percentf rom 87
mill
i
ont onnesin2001t o201mi ll
i
ont onnesin2014.Si mil
arly,metal
l
urgicalcoalexports
havei ncreasedfrom 106mi l
li
ontonnesi n2001t o186mi l
liontonnesin2014ar i
seof76
percent .Overthesameper iodaround$38bi lli
onofcoal miningandrelatedinfr
astruct
ure
proj
ect shav ebeenundertakeninAust r
ali
a.

Whilethegrowt hinAustrali
a
scoal export
shascoi nci
dedwiththesubst ant
ial
risei
nIndi
as
coalimports,onlyexportsofmet al
lur
gicalcoal t
oI ndi
ahaverisensubstanti
all
y(seetabl
e3a
and3b) .Austr
ali
aisnotasi gnif
icantsupplierofthermalcoaltoIndiadespit
eIndia
simport
s
growingby84mi ll
i
ont onnesinthepastf i
vey ears.Thermalcoalfrom I
ndonesiahasmet
mostofI ndia
simpor tgrowthwhi l
emostoft hegrowthinAust r
ali
asexport
shasbeent o
China,JapanandSout hKorea.

Sour
ce:ABS2015.
Ther ear ear angeoffact orsthathav el
imit
edAust rali
asthermal coalexportstoIndia,
particularlyinthepastf i
vey ears.Fi
rst,t
hepri
ceofAust ral
ia
st hermalcoal hasexceededthe
l
ev el t
hatI ndia
select
ricitycompani es,whoaresubj ectedtoregulatedprices,could
prof i
tablypay .Subsequent l
y,India
scoalimportershav esourcedsuppl i
esf rom t
helow-cost
producer si nIndonesiathatsuppl ylowerenergycont entcoalandhav elowershi ppi
ngcosts
fordel i
ver ytoIndi
a.Howev er,theenergycontentpremi um thatAustrali
ascoaltypi
call
y
attractsisget ti
ngsmal lerandkeybenchmar kpricesf orAustrali
anandI ndonesiacoalare
gettingcl oser(fi
gure30) .

Fi
gur
e30:Keycoalpr
icei
ndi
cat
ors

Sour
ce:McCl
oskey2015.

Second,isthatthespecifi
cati
onsofthi
slowercostcoalfrom Indonesi
aareclosertothatof
Indi
ancoal andmor ecompat ibl
ewitht
heengineer
ingrequirementsofgenerator
sinIndia.
Thehigherener gycontentandporti
onofvol
ati
lematterinAust r
ali
anproducedcoalmakes
i
tunsuitableformanyol dersubcri
ti
cal
gener
atorsi
nI ndi
at hatarenotdesi
gnedt ooperate
athighertemper at
ures.

Thir
d, i
sthattherehast husfarbeenv erylimitedinvestmentbyI ndiancompani esin
Australi
ancoal mines.Whiletr
ader sandut il
it
ycompani escanbuyAust r
aliancoal openlyon
themar ket,
doingsoexposesbuy er
stomar ketri
skssuchashi gherpricesorl ackofsuppl y
.
Owner shipofassetsreducesexposur etot heserisksandi mprovesthesecur i
tyofsuppl y,
whichisani mpor t
antfeatureforelect
ri
citycompani esthatrequireareli
ablesour ceoff uel
.
Indi
ancompani eshav eaccount edforav erysmal lshar eofthemassi v
ei nflowoff orei
gn
capit
al i
ntoAustrali
athatoccur r
edi nt
hei nvestmentphaseoft hemi ni
ngboom.By
compar i
son,Indiancompani eshav ebeeni nvesti
ngi nmi nesinIndonesiaand, mor erecentl
y,
Mozambi que.Forexampl e,Adani commencedcoal mi ningoperati
onsatt heBuny ucoal
mi neinKal i
mant anin2008andpr oducesaround5mi l
li
ontonnesoft hermalcoalforexport
toI ndiaeachyear .Whi
lethi
sprojecthasprovidedAdaniwit
har el
iablesourceofcoal f
orits
electricit
ygeneratorsi
nGujarat
,ital
soprovideseconomicbenefit
st oIndonesi
aint hefor
m
off oreigndi
rectinvest
ment,governmentroyalti
esandaround1300j obsforlocal
residents.

Box5.I
ndi
ani
nvest
menti
ntheGal
il
eeBasi
n

TheGal i
leeBasini sanundev el
opedcoalbasininwest er
nQueensl andthat,ifdeveloped,
couldbecomet helargestcoal-
produci
ngr egi
oninQueensland.Thepr oposedpr ojectsinthe
regionareexpect edtoattractmorethan$28bi l
li
onininvestmentandcr eatemor et han15
000j obsduringconst r
ucti
onand13000j obsonceoper ati
onal(Depart
mentofSt ate
Dev el
opment2014) .Thereisstr
onginter
estfrom Indi
ancompani esindev el
opingpr ojects
i
nt heGal i
leeBasin.Thesecompani eswillcontr
oltheful
lsupplychain,i
ncludingmi ne, r
ail
andpor tinfr
astructur
e.

Adani
s$16. 5bil
li
onCar michaelcoalmi neandr ailproj
ecti
sthemostadv ancedpr oj
ecti
n
theregi
on.Atf ull
capacity,
themi newi l
lbecapabl eofproducingupto60mi ll
i
ont onnesof
thermalcoalay ear.Thecompl exwill
consistofsi xopen-cutpit
sandfi
v eunder ground
mines;f
ivemi neinfrastr
uctureareas;acoalprocessi ngandhandli
ngplant ;
wor kers
accommodat i
on;anai r
port
; andwaterinfr
astructure.Adanii
salsodeveloping189
kil
ometresofr ai
ltotransportthecoal t
oanewl yexpandedcoal t
ermi
nal atAbbotPoi nt
(AdaniMining2013; DepartmentofSt ateDevelopment2015) .

GVKhaspl anst odev el

optheAl pha(inpartnershi
pwi thHancockCoal )andKev i
nsCorner
proj
ects.Al
phawi l
lbea30mi l
li
ont onnesay earthermal coalmine, consisti
ngoffouropen-
cutpit
s,withthepot enti
alt
oexpandunder groundint hefutur
e.GVKwi llalsodevel
opa495
ki
lometrerail
linetot r
ansportcoalfrom themi netoAbbotPoi nt.TheKev i
nsCornerpr
oject
will
bea30mi lli
ontonnesay earopen- cutandunder groundmi ne.Thepr ojectwi
llal
so
i
ncludeasmal l r
ailcomponent( 18kilometres)toli
nkt otheAlphar aili
nfrastr
uct
ure(GVK
2010;2011).

Mostofthecoalproducedfr
om theseproj
ect
sisexpect
edtobedest
inedforexpor
tmar
ket
s,
pri
mari
lyIndi
a,al
thoughthepot
entialt
osuppl
ythedomesti
cmarketi
salsobeing
consi
dered.

Althoughpr i
ces,coalqualit
yandi nvest
menthav et husf arlimitedgr owthinAust ral
ia
s
thermal coalexport
stoI ndi
a, t
hesebarriersarenowst arti
ngf all.Whil
ecoal consumpt ionin
Asia-Pacifi
cmar ketst
hatAust rali
asuppliesisstill
gr owi ng,ther api
dgr owthint he
avail
abil
ityofsupplyhasdr ivenbenchmar kAust rali
ant her mal coalpri
ceslower .Australi
an
producer saresuccessfull
yimpl ementi
ngcostr educt ionandpr oducti
vi
tyimpr ovement s
programswhi chcombinedwi t
haweakerAust rali
andol larhavemadeAust rali
ancoal mor e
compet i
t i
veininter
nati
onal markets.Alt
hought hev olumegr owt hwassmal l,thiswas
refl
ectedi nAustral
i
asthermal export
stoI ndi
ai ncreasi ngnear ly300percentt o6.7mi l
li
on
tonnesin2014.

Thisrepor
thashi ghli
ghtedthatmuchofIndi
a
scoalfi
redel
ectr
ici
tygenerat
orfleetsti
l
l
employssubcri
ticaltechnol
ogythatbur
nsatlowert
emperatur
es.Austral
i
ascoal,wit
hhi gh
energycontent
,wi l
lremainunsui
tabl
eforuseint
hesegenerat
orsthoughsti
llpotenti
all
y
usefulforblendingwi thsomeoft helowergradecoal sproducedi nI ndiatoraisetheav er
age
energycontentpert onneofcoal consumed.Howev er,I
ndia
si nvestmenti nnewgener ati
ng
capacityhasagr eat ershareofgener at
or st
hatempl oysupercr i
ti
cal technologiestoprovide
betterther
mal eff i
cienciesandl owercar bonemi ssi
onspergigawat thourofel ectr
ici
ty
produced.Electricityoutputfrom thesegener atorswil
lbeoptimi sedbyusi nghigherenergy
contentcoal wit
hl owerashl evelsthanmostofI ndi
asdomest icmi nespr oduce.Australi
ais
notuniqueinsuppl y
ingwor ldcoal marketswithhighergradecoal ,butt herolloutof
advancedcoal gener atortechnologiespresentsasignif
icantlongt erm oppor tuni
tyfor
Aust r
ali
ancoal pr oducer s.

InvestmentbyI ndi
ancoal compani esinAust rali
ahast husf arbeenl argelylimit
edt o
met all
urgi
cal coalasset s.Howev er,thedevelopmentofgr eenf i
el dmi nesi ntheGalil
eeBasi n
i
ncent ralQueensl andmayal terthisiftheyproceedt oconst ruct i
on.Ashi ghli
ghtedbyt he
IEA,greenfiel
dcoal mi nedev elopmentr emai nsessent i
al overt hel ongt ermt oof f
sett he
depleti
onr ateofexi stingmi nesar oundt hewor ld(figur
e31) ,ev enascoal demandgr owth
slowsshar plyfrom thel evelsseeni nrecenty ears.AdanisCar mi chaelmi neandGVK s
Alphami near et woadv ancedpr ojectsthatar eproposedf ordev elopmenti ntheregionand
signif
ythei ntentofI ndiancompani est oinvestinpol i
ti
callyst ablej uri
sdictionsthatcan
providelongt ermr eliablesuppl i
esofcoal t
omeett hegr owi ngener gyneedsofI ndia.

Fi
gur
e31:Pr
oject
edcoalpr
oduct
ionbydeposi
tty
pe

Sour
ce:I
EA2014a.

Indi
asdesi
retoimprovetheproducti
vi
tyofdomest iccoal minest
hroughadv anced
technol
ogymaypr esentanopportuni
tyforAustral
i
asmi ningequi
pment,technologyand
servi
ces(METS)sector.METSandoi l
,gasandener gyr esources(
whichincl
udescoal)have
beenidenti
fi
edastwooft hefi
veindustr
ygr owthcentresbyt heAustr
ali
anGov ernmentas
partofit
sIndust
ryInnovat
ionandCompet it
ivenessAgenda.TheI ndi
anGov ernment,thr
ough
CIL,hasal
readyexpr
essedaninteresti
nwor
kingwi
thAust
ral
i
ancompani
est
oupgr
adet
he
technol
ogyemployedinthei
rcoalsector
.
Appendi
xCoalf
undament
als
Coal hasunder pinnedglobal electricit
ygener ationandi ndustrial
isationf orov eracent ury
.
Whilet hewor l
di sconsumi ngmor ecoal asitpr ogressesi nt
ot he21stcent ury, thei ndustry
hascomeunderi ncreasingscr utinyov erthepastf ewy earsbecauseofi tsper cei v
ed
envi
ronment al i
mpact s.Whi l
et her eisnodoubtt hatcoal usegener atescar bonemi ssi ons,
whati softenmi sunderstoodi st heex tentt owhi chemer gingcoal -f
ir
edt echnol ogiescan
contributetoabat i
ngemi ssions; andt hechal lenget hatremov ingal lfossilfuelsf rom t he
worldsener gymi xwill
posewhi lebi ll
ionsofpeopl einemer gingeconomi esincr easet hei
r
consumpt i
onofel ectri
cit
y.Thepur poseoft hisappendi xistor eviewt hechar act eri
sticsof
coalresour ces, miningandcoal -fi
redel ectr
ici
tygener ationtechnol ogiest hathav ebeen
ref
erredt oint hemai nbodyoft hisr epor t.

Par
tACoal
proper
ti
esandext
ract
ion
Usesofcoal

Themai nusesofcoal areelectri

citygener ati
on,
st eelpr
oduction,cementmanuf acturing
andasal iqui
df uel
.Coali
scl assif
iedi ntotwocat egor
ies;t
hermal coal andmetal
lurgical
coal,basedoni tsquali
ti
esandenduse.Ther mal,orsteaming,coal i
smai nl
yusedi n
elect
rici
tygener ati
onandcementpr oduction.Metall
urgi
cal
, orcoking,coali
smai nlyusedin
steelproduction.Metal
lurgi
cal coalist y
picall
yhighergradeandhasf ewerimpuri
tiest han
thermal coal.

Coalchar
act
eri
sti
cs

Coal i
sacombust ibl
erockthati
scomposedmai nl
yofcarbon,hy drogenandoxy gen.Iti
s
formedov erti
mewhenpl antmateri
ali
scover
edbyl ay
ersofsiltandot hersedimentsthat
preventi
tfrom completel
ydecomposing.Ast
heplantmateri
alisbur iedi tbecomesexposed
tohightemper at
ureandpressur
ewhichcausephysi
calandchemi cal changestothe
mat er
ial
resulti
ngincoalseams.Theseseamscanrangeinthicknessf rom mill
i
met r
esto
tensofmet res(Geosci
enceAustr
ali
aandBureauofResourcesandEner gyEconomi cs
2014).

Thequal it
yoft hecoali
sdetermi
nedbythepr essur
e,temper
ature,pur
it
yandl engthofti
me
i
nf ormati
on.Coalrangesfr
om li
gnit
eorbrowncoalt
oanthr
acite(fi
gure32).Ligni
teis
relati
velysof
tandi t
scolourcanrangef
rom darkblacktovar
iedshadesofbr own.Ov ert
he
cour seofmill
ionsofyears,t
hecoalmaturesandbecomeshar derandblacker(WorldCoal
Instit
ute2009).

Fi
gur
e32:Coalf
ormat
ion
Sour
ce:Geosci
enceAust
ral
i
aandBur
eauofResour
cesandEner
gyEconomi
cs2014.

Thel engthoft i
met hatt hecoalhast akentodev elopdeterminesi t
sphy si
cal andchemi cal
proper t
ies,
orrank.Lignit
eandsub- bituminouscoal sarereferr
edt oas l
owr ankcoal.They
arety pi
call
ysof t
er,easyt obreak-
downi ntosmallerpiecesandhav eadul lappearance.They
usuallyhavehi ghmoi sturecontentandl owercar boncontentwhi chadv ersel
yaffecttheir
energycont ent.Conv ersel
y,
highrank coals(
bit
umi nousandant hraci
te)areharder,
strongerandl ustr
ous.Theyhav elowmoi stur
econt entandhi ghcarboncont entwhi ch
meanst heycanpr oducemor eenergyperuni tofconsumpt i
on( f
igure33).

Fi
gur
e33:Ty
pesofcoal

Sour
ce:Wor
ldCoalI
nst
it
ute2009.

Coal i
snotast andardproductandev encoalfr
om asi ngl
eseam canv aryinqual i
ty.Coal
for
mat ionshavediff
erentphysical
andchemi calproperti
esthataffectit
sov er
allenergy
contentandeffici
encyindiff
erentappli
cati
ons.Thequal i
tyofcoalhasamaj orinfl
uenceon
thedesignofapowerpl ant,aswell asit
soperati
onandper formance( Miller2013).When
determiningt
hequal i
tyofcoal,several
proper
tiesareconsidered.Thesei nclude:energy
cont
ent
,vol
ati
l
emat
ter
,sul
phur
,moi
stur
e,ashandt
raceel
ement
s.

Ener
gycont
ent

Energycontentisthemosti mpor t
antpropertyfordetermini
ngtheef f
ecti
venessofcoalin
powergener at
ion.Itr
epresent stheamountofener gythatcanbepr oducedbyburninga
gi
venquant it
yofcoal.Inapowerpl ant,
theener gycontentdeterminesthevolumeofcoal
neededt oachieveadesiredl evelofel
ectri
cit
ygener ati
on.Thehighertheenergycontent,
the
l
owert heplant
scoal r
equirement s.Mostcoal -
fir
edpowerpl ant
sar econfi
guredtousecoal
wit
hspeci fi
cenergycontent, measuredinkilocalori
es,megajoul
es, ormil
li
ontonnesofcoal
equival
ent(theenergygener atedbyburningonet onneofcoal,i
tistheequival
enttoburni
ng
700ki l
ogramsofoi l
).

Asout l
inedabove,t
hecarboncont ent
,andt herefor
eenergycontentofcoal, i
ncreasesover
ti
me.Accor di
ngl
y ,
li
gnit
ehasthel owestener gycontent
,whil
eanthr aci
tehast hehighest
averageenergycontent
.Theener gycontentofligni
tevari
esbetween22004600
ki
localori
esperkil
ogram;sub-
bituminousbet ween47007200ki localor
ies;bit
umi nous
between61008300ki l
ocalor
ies;andanthracitebetween72008300ki localori
es( Bowen&
Ir
win2008) .

Volat
il
emat terr
efer
stothecomponentsincoalthatar
erel
easedint
heearl
ystagesof
combust i
on.Thi
susual
lyconsi
stsofcombustibl
egasessuchasmethaneandhy dr
ogen
l
ocatedintheporesofthecoal
.Coalwit
hlargeamountsofvolat
il
ematteri
gni
teeasil
y;bur
n
qui
ckly;burnwit
halongsmokyflame;andgenerall
yhasalowerheat
ingval
ue(Spei
ght
2013).

Sul
phur

Thesulphurcont entofcoal i
sani mportantconsiderati
onincoal ut
il
isati
onbecausei tcan
contri
butetoincreasedai rpollut
ion.Whencoal isbur nedthesulphurcontainedint hecoal
for
mssul phurdioxide,whi chcancont ri
butetothef ormat i
onofacidrain.Itcanalso
combinewi t
hsootpar ticulatestocausesmog.Smogcanhav edetri
ment alhealt
hef fect
s
andisbecomi ngamaj orpr oblem i
nsomehi ghl
ypopul atedcit
iesinemer gingeconomi es,
part
icular
lyChinaandI ndia.Thesmoghazet hatisgener atedi
ntheseci t
iesisoften
i
ncorrectl
yattri
butedtocar bonemi ssi
ons;howev erthet woarenotnecessar il
yrelatedas
measur escanbeunder t
akent oreducethesulphuremi ssi
onsthatcausesmog.

Toreducet heeff
ectofsulphuronairquali
ty,
coalwithl
owsul
phurcontentcanbeused.
Somesul phurcanber emovedfrom coalpri
ortoit
susethr
oughbenefi
ciat
ion(see
di
scussiononcoal pr
eparati
onbelow).Howev er,
washingi
ncr
easesthecostofproduct
ion
andcanonl yremovepyri
ti
csulphur
sulphurcombinedwi
thi
rontoform pyr
it
eorfool

s
gol
d.

Whensulphurcannotber emov edfr

om thecoal,i
tcanber emov edfr
om thepost-
combustiongasesbeforetheyentertheatmosphereusingfluegasdesulphuri
sat
ionuni
ts,
orscr
ubbers
.Thescrubberssprayami xt
ureofli
mest oneandwat eront
ot hecombusti
on
gases,whichatt
achtothesulphurandf or
m eit
herawetpast eoradrypowderthatcanbe
captur
ed( DOE2013).Thesulphurcontentofcoalrangesbetween0.6to4.0percent
(Bowen&I rwi
n2008).Austral
iancoalistypi
cal
lyl
owi nsulphur.
Ash

Despit
ethename, coaldoesnotcontai
nash.Ashrefer
stothenon-combusti
blemateri
al
cont
ainedincoalthatbecomesaby -
productofcoal
combustion.Theashcontentofcoal
canrangebetween350percent( Bowen&I r
win2008).Aust
rali
ancoali
stypi
call
yatthe
l
owerendoft hi
sspect r
um andisusual
lywashedpri
ortoexport.Washi
ngreducesashand
i
mpr ovest
heov er
allquali
tyoft
hecoal.

Ashcancombi newithotherelementst oli

net heboi
ler,whi
chaffectstheoperati
onoft he
plant
,reduci
ngi t
seffi
ciencyandr esult
inginexpensiverepai
rs(Speight2013).Higherash
canalsoincreasetheoper ati
ngexpensesofapowerpl antbecauseoft hecostsassociated
withremov i
ng,cooli
ngandt r
ansport
ingit(Sargent&Lundy2009) .Theashcont entofcoal
canber educedthroughbl endi
ngmi xi
ngwi thcoalthathaslowerashcont entorthrough
washingasdescr i
bedbel ow.

Ashi stypical
lycomposedofsi li
ca,aluminium oxide, ir
onoxi de,calci
um oxide,magnesium
oxideandsodi um oxide.Whencoal i
scombust ed, t
her esulti
ngashi sclassi
fiedaseit
herfl
y
ash or
bot t
om ash.Fl
yashisaf ine,powder ysubst ancet hatri
seswi ththecombustion
gases.Theasht hatdoesnotr iseiscollectedatt hebot t
om oftheboi lerasamol t
enslag
andi sreferr
edtoasbot t
om ash.Ashhassev eral end-useappl i
cati
onsi ncl
udingconcrete
production,cementcl i
nkerproduct i
on,wast estabi l
isati
onandsol idif
icati
on,mine
reclamationandot herindust
rialandagr icult
uraluses( Speight2013).

Inearly2015,Chinaimposedrestr
ict
ionsonl ocalproducti
onandimportsofcoalwithhigh
ashcont ent(
greatert
han40percent ).Ti
ghterrestri
cti
onswer ei
mposedoncoal beingused
i
nhi ghlypopul
atedareasincl
udingBeiji
ng,Ti
anjinandHebei ;TheYangt
zeRiverDeltai
nt he
east(whichcapturesShanghai)
;andthePear lRiverDelt
ainthesouth(Guangdong).Coalin
theseregionsmusthav eashcontentlowerthan16percent .

Moi
stur
e

Mostcoalscontai
nsomemoi st
ure.Alargepr opor t
ionoft hiscanber emov edbyheat ingthe
coalatr
elati
vel
ylowt emper
aturestodryitout .Theef fi
ciencyofaboi leri
sr educedwhen
coalhashighmoisturecont
entbecauset hewat eri
sv aporiseddur ingcombust i
onandt he
associ
atedheatisnotrecov
ered.Assuch, theheatusedt ov apori
set hewat erreducest he
amountofheatav ai
labl
etogeneratesteam int heboiler(Sar gent&Lundy2009) .Moi sture
al
soaddswei ghttothecoal
,whichincreasest hecostoft ransportati
on.

Tr
aceel
ement
s

Coal cancontai ntracesofot herelement si

ncludi
ngant i
mony ,ar
senic,
boron,beryl
li
um,
bromi ne,cadmi um, chl
ori
ne,cobal t,
chromium, copper, f
luori
ne,i
odine,mercury
,manganese,
moly bdenum, nickel,l
ead,seleni um,t
horium,urani
um, vanadium andzi
nc.Theset r
ace
element scanbel ef tbehi
ndint heashandhav eadv erseenv ir
onmentalandhealtheffect
s
whencombust ed.TheAust raliancoal i
ndust
ryisstriv
ingt omi ni
miseit
senv i
ronmental
footprint
,ther
ear est ri
ctenvironment al
,heal
thandsaf etylawsthatmustbemet .

Coalr
esour
cesandmi
ning

Thewor
ldhasabundantcoal
resour
ceswhi
chcanbef
oundonev
erycont
inent
,though
qual
ityvar
iesbetweenregi
ons.Thel
argestknowncoal
reser
vesar
elocat
edi
ntheUni
ted
Stat
es,Russia,
China,
Austral
i
aandIndia.

Thewidespr
eadavai
labi
l
ityofcoalr
esour
cesmeanst
hati
tissubj
ect
edt
omuchl
ess
pol
it
ical
inst
abi
li
tyt
hanpet r
oleum.

Accordingtot heWor ldEnergyCounci l

(2013)worldcoalreser
vesareesti
mat edatar ound
870bi l
li
ontonnes, whicharesuf f
ici
enttolast115yearsatcurrentpr
oducti
onr ates.Thisi
s
considerabl
ylongert hanconv ent
ionaloil
andgasr eser
ves.AsiaandsouthernAf ri
cahav e
l
argecoal reserves;bothregionshav el
argeporti
onsoftheirpopulat
ionswit
hi nadequate
el
ectrici
tyaccess.Assuch, coal i
slikel
ytoplayanimportantroleinmeeti
ngtheirgrowing
energyneeds.

Coalmi
ningmet
hods
Coal canbemi nedusingoneoft womet hods,opencut(surface)miningandunder ground
(deep)mi ni
ng.Themet hodadopt edwil
lbelargel
ydeterminedbyt hegeologyoft hecoal
deposit.Opencutmet hodsaretypical
l
yempl oyedwhent hecoal seam i
scl osetot he
surface.Whent hecoalseam i
sf urt
herfr
om thesur f
ace,undergroundmet hodsar egener
all
y
mor eeffi
cient(
Wor l
dCoal I
nsti
tute2009).Themaj ori
tyofAustrali
a
sproduct i
onissourced
from opencutmi nes.

Open-
cutmi
ning

Open-cutoperationsaregeneral
lyl
owercostandr ecovermor eoftheavail
abl
ecoal t
han
under
gr oundmi ningaround90percentoft hedepositcanberecovered.Lar
geopen-cut
minesempl oylargepiecesofequipmentincludi
ngdraglines,
powershov el
s,t
rucks,
bucket
wheelexcav at
orsandconv ey
orbelt
s.Thesur f
aceareaofanopen- cutminecancover
sever
al squarekilometr
es( Worl
dCoalInsti
tute2009).

Beforemi ningcancommencet heov erbur den,whichi st helayerofsoilandr ockbet ween

thecoal seam andt hesurface,i
sbr okenupi ntosmal l pi
ecesusingexpl osi
ves(figure34) .I
t
i
st henremov edusi ngeit
heradr agline, powershov el andt ruckorbucketwheel depending
onov er
bur dendept h.Adr agli
nei sthel owestcostov erburdenremov almet hodbuthasa
highcapitalcost.Thedr aglinecast sal argebucketl ongdi st
ancesandcol l
ectstheloose
overburdenbypul lingthebucketbackal ongt hegroundt owar dsit
self.Thebucketi sthen
empt i
edont oapi le.Apowershov elremov estheov er burdenusingcabl esandabucket .The
shovelisgener all
yont racksandcanr otate360degr eesf rom astationaryposit
ion.The
powershov elhasmor efl
exibil
it
yt hant hedr agli
neandal owercapitalcost,butitsoperating
costsarehi gher.Abucketwheeli sacont i
nuousdi ggi ngmachi nethatusesaser iesof
bucketst oscoopupt heov erburdenast hewheel r
ot ates.

Oncet hecoalseam hasbeenexposed, itisdril

led,f
ractur
edtoloosenthecoalandthen
systematical
l
yextractedinstri
ps.Themi nedcoal i
st hentr
ansport
edtoeitheracoal
preparati
onplant(
di scussedbel
ow)ordi rectl
ytothepowerpl antf
oruse.Whenmi ni
ng
acti
v i
ti
esarecompl eted,thel
andisrehabili
tat
ed( WorldCoalI
nstit
ute2009).
Fi
gur
e34:Open-
cutcoalmi
ning

Sour
ce:Wor
ldCoalAssoci
ati
on2015b.

Under
groundmi
ning

Therearetwomet hodsofunder groundminingforcoal :bordandpi l

l
arandl ongwallmi ni
ng.
Inbordandpil
larmi nes,agr i
dofroomsorbordsarecuti nt
ot hecoal seam,l
eavingbehi nd

pill
arst
osupportther oofofthemi ne.Thepill
arsleftbehindcanr epresentupto40per
centofthecoalcont ai
nedi ntheseam.Assuch, thi
smet hodisnotverycompet it
iveandi s
becominglesscommon.Howev er,t
hepil
lar
scansomet imesbeext ractedthr
ough r
etreat
miningwherethepillar
sar emi nedasthewor kersretreat.Theroofislefttocoll
apse,whi ch
cancausesubsidence, andt hemineabandoned.Bor dandpi l
larminingcanbegi nfaster
thanlongwal
lminingandt hetechnologyemploy edislowercost( Wor l
dCoal I
nstit
ute2009) .

Longwal
lmi
ningextr
act
sal l
thecoal
from asect
ionoft
hecoalseam,knownasthe
face
,
usi
ngamechanical
shearer(f
igur
e35).Thef
acecanrangei
nlengthf
rom 100t
o350met res.
Ther oofistemporari
l
yheldinplacewhi l
ethecoalisbeingextr
actedbyasel f-
adv ancing
hydraulic-
poweredsupport
.Thesel f
-advanci
ngsupportprotect
swor kersfrom subsidence
ofther oofandisasaferundergroundmet hodthanbordandpill
ar.Oncet hecoalhasbeen
extr
acted, t
hecoalistr
ansport
edt othesurfacebyconveyorbeltandther oofi
sal l
owedt o
coll
apse.Upt o75percentofthecoal i
nthedepositcanbeextractedthroughthepanel sof
coal.

Fi
gur
e35:Longwal
lmi
ning

Sour
ce:Wor
ldCoalI
nst
it
ute2009.

Coalpr
epar
ati
on

Whencoal i
sextractedfr
om t hemi ne,knownasRunofMine(ROM),i
toftencontains
unwantedimpuriti
esli
kerocksanddi rt
.Thetr
eatmentofcoalisi
mportantinensur i
nga
consi
stentquali
tyandspeci f
icat
ion;thetypeoft
reatmentdependsonthepr opert
iesofcoal
anditsi
ntendeduse.Ther emov alofwast epr
oductsal
soreducestr
anspor t
ationcosts,
whicharechargedonawei ghtbasis.

Coalprepar
ation,al
sor ef erredt
oaswashi ngorbenefi
ciati
on, i
nvolv
escr ushingtheROM
coali
ntosmal l
erpieces.Thel argerpi
ecesar etr
eat
edinapr ocesscalleddensemedi um
separat
ion
,wherecoal issepar atedfrom theunwantedimpur it
iesthroughf l
oatation.The
coali
sf l
oatedinat ankf ullofli
quidofapar t
icul
ardensi
t y
,usual l
yamagnet i
temi xture.
Becausecoal i
sli
ght eri
tf loatstothesurfaceandcanbesepar ated.Theheav i
ermat eri
als
si
nktot hebottom ofthet ankandar eremov edaswaste.Smal lerpi
ecesar etreatedinmany
dif
fer
entway s.Acent ri
fugecanbeusedt oseparat
ethecoal basedondi ffer
encesi nmass.
TheROM coal i
splacedintoacont ai nerinthecent r
ifugethatspi
nsv eryqui
ckly,whi
ch
causesthesol
idsandl i
quidst osepar ate.Fr ot
hflot
ationseparat
esthecoal basedon
dif
fer
entsurf
aceproper t
ies.Frot
hi scr eatedbybl owingairint
oami xtureofwaterand
chemical
s.Thebubblescr eatedattractt hecoal,butnotthewast e,
andar eskimmedofft
he
topofthemixtur
etor ecoverthefinepar ti
clesofcoal (Worl
dCoal I
nsti
tute2009).

Par
tBCoal
-f
ir
edel
ect
ri
cit
ygener
ati
on
Coal-f
iredpoweristhekeyinputt owor l
delectr
icit
ygener at
ion, accounti
ngf orar
ound40per
cent,or9150t er
awatthours,
oft otalgenerat
ion.Thet echnologyi satt
racti
vebecauseiti
s
rel
iable,pr
ovidessecur
esuppl y
,hasr elat
ivel
ylowf uelcostsandcompet i
ti
vecapital
and
operatingcosts(Czi
esl
aetal.2009) .Howev er,coal-
fi
redgener ationalsopresent
s
chall
engesi nter
msofai rpol
luti
onandCO2emi ssions(Beer2009) .

Howcoal
-f
ir
edgener
ati
onpl
ant
swor
k
Pulveri
sedCoal Combust i
on(PCC)isthemostcommoncoal -
basedelectri
cit
ygenerati
on
technology .Theseplantsusether
mal coalthathasbeenpul veri
sedint
oaf i
nepowderas
thi
sincr easesitssurfaceareaandmakesi teasiertoburn.Thepowder edcoal i
sblowninto
thecombust ionchamberofaboi l
er,
wher eitisburntathightemperatures.Theheatandhot
gasespr oducedthroughthecombustionoft hecoal conv
ertswatercontainedintubesli
ning
theboilerintosteam (fi
gure36).

Thest eam ispassedatpr essurei ntoat ur binethathousest housandsofpr opell

erblades.
Thest eam pushest hesebl ades, forcingt het ur
binetor ot
ateatahi ghspeed.Thet urbinei
s
connectedt oanelect r
icalgener atort hathouseswi recoil
sthatr ot
atearoundast rong
magnett ocreat
eelectricit
y .Oncei thaspassedt hroughthet ur
bine,t
hest eam iscondensed
(convertedbackintowat er)andr einjectedi ntotheboilertober eheat
ed.Theel ectr
ical
outputist r
ansfor
medi ntohi gherv oltagest hatcaneconomi cal
lyandeffici
entl
ybe
transportedlongdistances( WorldCoal Institut
e2009) .

Fi
gur
e36:Coal
-f
ir
edpowerpl
antschemat
ic

Sour
ce:Wor
ldCoalAssoci
ati
on2015c.
Theamountofener gyproducedbyt hepowerpl antforagivenheatinputi
sknownasi t
s
thermal effi
ciency.Bydef i
nit
ion,t
hermaleffi
ciencymustr angebet ween0100percent.
Howev er
,ineffi
cienciesintheprocesssuchasf rict
ionandheatl ossresul
tsi
nther
mal
effi
ciencybeingbel ow100percent .Thethermal eff
ici
encyofacoal -f
ir
edpowerplant
dependsont het emper at
ureandpr essur
eoft hesteam generatedintheboil
erf
rom the
combust i
onofcoal .

Mostpowerpl antsar econf i

guredtorunonapar ticularspeci fi
cati
onofcoal .Thisi
nf l
uences
thedesignoft heboi l
ersy stem,boil
ersize, t
ypesofpol l
utioncont r
olandot herauxil
iary
component s.Plantsdesi gnedt ouselow- energycoal srequi r
eal ar
gerboilertoenable
combust i
on.Ifapl antusescoal ofalowerqual it
yt hani twasdesi gnedfor,theoperation
andperformanceoft heplant,andhenceef f
ici
ency ,i
sr educed( Mill
er2013).Whenacoal of
therequir
edspeci ficati
oni snotavail
able, pl
antoper atorscanbl endt woormor ecoalsto
repl
i
catet hespecifications.Howev er
,itisdiffi
culttopr edicttheproperti
esoft heseblends
andcouldr educet hepl antsthermaleffi
ciencyorr educepl antavai
labil
i
tyasmor efr
equent
maintenanceisr equired( I
EA2014b) .

Thediff
erentt
echnol
ogi
esusedf
orcoal
-f
ir
edpowergener
ati
onhav
emar
kedl
ydi
ff
erent
eff
ici
enci
es,cost
s,andpol
l
uti
onout
comes(tabl
e4)
.

Sour
ce:I
EACl
eanCoalCent
re2014.

Subcriticaltechnologi
esar ethemostcommoncoal -fi
redplantglobal l
y,empl oyi
nglower
temper aturesandpr essuresthanot hertechnol ogies.Whi l
et heyar egener al
lycheaperand
quickert obuildthanothertechnologies,theyhav el oweref fi
ciencies, t
ypical
lyaround30per
cent,andi nsomecasesbel ow.Thedr awbacksofsubcr i
ti
cal t
echnol ogieshav el
edt heIEA
andot herinternati
onalbodiest oarguet hatthegl obal deploymentanduseofsuch
technologiesshoul dbeincreasingl
yr estri
cted,inf avourofmor eef f
icienttechnologies.
Howev er ,t
heWor l
dBanksdeci si
ont oceasef undi ngf orcoal-fi
redpr ojectsindeveloping
countries,unlessthereisnof easi
bleal t
ernativ
e, islikelytostalltheupt akeofmor eeffi
cient
technologiest hathavehighercapitalcostsunl essot hersourcesoff inancecanbe
organised.

Super cr
iti
cal t
echnologiesusehi gherpr essuresandt emper aturesi ntheboi l
erthan
subcriti
cal,achievi
ngt her
mal efficienciesar ound40percent ,buthav ehighercapi t
al costs
duet otheneedt ousemat er i
alswi thhigherheatandpr essuret olerances.Super cr
it
ical
plantsaremor eeconomi cwi t
hl argerboi l
ersandt urbines.Assuch, atypicalsupercriti
cal
unithasacapaci tyofmor ethan500megawat ts.Asuper cr
iti
cal plantemitsar ound6per
centlessCO2t hanasubcr iti
calpl ant.Super cr
it
icalpl
ant saredesi gnedt ousecoal swi th
highener gycont ent
.Ifcoal wit
hl owerener gycontentisusedi nt heboi l
er,theplantcan
havesev erelossesi neffi
ciency.
Ultra-super cri
ti
cal(
USC)pl antsoper ateatevenhighertemper aturesandpr essuresthan
otherpl ants,achiev
ingeffi
cienciesar ound45percent .USCpl antsarebuiltusingadv anced
mat erials,requi
rehigherqualit
y,lowashcoal s,andhav ehighercapitalcosts(upt o4050
percentmor ethanasubcr i
ticalplant)andlongerbuil
dt i
mes.Howev er,operati
ngcost sare
typicallylowerbecauseofr educedcoal consumpt i
on.Theov erall
powercost sofUSCi s
greaterr elati
vetoothercoal-fi
redt echnol
ogies,unl
esscoal pri
cesar ehigh,oracar bonpr i
ce
exists.

Howev er,thebenefit
sofusingUSCpl antsar
eev i
dentwhencompar i
ngaUSCpl ant
operati
ngat48percentef fici
encyt oasubcrit
icalplantoper
atingat32percenteffi
ciency.
TheUSCpl antproduces50percentmor epowert hanthesubcr i
ti
calpl
antf
rom thesame
coalinputandr educesCO2emi ssionsbymor ethanat hir
d.Thepoorestquali
tysubcrit
ical
powerpl antscanemi tmorethan1t onneofCO2permegawat thour,
comparedwi t
h700
ki
logramsf orUSCplants(
IEACl eanCoal Centr
e2014) .

Adv ancedul t
ra-supercri
t i
cal(AUSC)pl antsareanex t
ensiononUSCpl ants.Howev er,t
he
useofgr eat
ertemper atureandpr essureput sal otmor estr
ai nonpl antcomponent sandt he
boil
ercandet er
iorateoverapr olongedper iodoft i
me.Consequent l
y ,AUSCpl ant
susest eel
s
thatar eheat-
resistant
,hav eahighmel ti
ng-poi
ntandv eryhighnickel contentandaremor e
expensi vetobuildthanUSC.AUSCdemonst r
ationplantsarebei ngdev elopedinChi na,
Europe, I
ndia,Japanandt heUnitedSt atesandar eexpect edt oachieveef f
ici
encies
appr oaching50percent .TheCO2emi ssionsfrom anAUSCpl antareexpect edtobeupt o20
percentl owerthansuper cri
ti
caltechnology(IEACl eanCoal Centr
e2014) .

Sour
ce:I
EACl
eanCoalCent
re2014.

Not
e:*Netef
fi
ciencycal
cul
atedbasedonhi
gherheat
ingval
ueofani
nlandpl
antusi
ngbi
tumi
nouscoal
.

Al
thoughPCCi
sthemostpr
omi
nentt
echnol
ogy
,ot
hert
echnol
ogi
esar
ebei
ngdev
eloped.

Integrat edGasi ficati

onCombi nedCy cle(IGCC)pl ant
sgasi f
ycoal toproduceasy nt het
ic
gasf uel andst eam.Theheat edsy nt heticgasist henprocessedt oremov esulphur,mer cury
andot herpar ti
cul at
es.Thecleanedsy ntheti
cgasi sthenfedi nt
oacombust ionturbineto
gener ateel ectr
icity.Theheatf r
om t hecombust ionexhaustgasesi srecover
edtogener at e
additi
onal steam.Ther ecoveredst eam, al
ongwi ththesteam pr oduceddur i
ngcoal
gasifi
cat i
onisf edi ntoasteam turbinet ogener ateadditi
onal el
ectri
city
.IGCCplant scan
achiev eef fi
cienciesofar ound45percentandhasl owemi ssionsbecauset hefuel i
s
cleanedbef orei tisfir
edinthegascy cleturbi
ne.Howev er,theyhav ehighercapit
al and
operat ingcost st hanPCC( I
EACl eanCoal Cent
re2014) .
Addr
essi
ngt
heCO2chal
lenge

Giv enthecommonl ypr ojectedi ncreaseddemandf orcoal ,particularl

yinemer ging
economi es, t
herehasbeengr eaterattent i
ononr educi ngemi ssionsf rom coal technologies
toassi stinmeet ingcl imat eobj ecti
ves.Whi l
ecoal -
fi
redel ectricitygener ati
oni scur r
entlya
l
ar gecont ributort ogl obal CO2emi ssions,thet echnol ogyi sev olving.Newercoal -
fi
red
technol ogiesoper ateatahi gheref fi
ciency ,whichmeanst hatt heyconsumel esscoal per
kil
owat thourgener ated, therebyi mpr ovingenv ironment alperfor mance( f
igure37) .These
technol ogiesar eof tenr eferredt oasHi gh-Eff
iciency ,
Low-Emi ssi ons( HELE)coal -fi
red
powergener ati
on.I ncr easi ngt heef f
iciencyofacoal -
firedpowerpl antby1percentcan
reducei tsemi ssionsby23percent( I
EA2014b) .Assuch, i
ftheav erageef f
iciencyoft he
global coal-fi
redpowerf leetwasi ncreasedf rom i tscur rentav erageof33percentt o40per
cent ,t
hiscoul dr esul tina2gi gatonner educti
oni nglobal CO2emi ssions.Thisi sequi v
alent
toI ndi
asannual CO2emi ssions( IEA2010) .

Improvingef fi
ciencyatexisti
ngpowerpl antsandensur i
ngt hatnewcoal -
fi
redbui l
dsare
basedonnewert echnologiesarecost-
ef f
ectiveandr eadil
yav ailableopt i
onsf orachievi
nga
reducti
oni nCO2emi ssions(Beer2009).Theef fi
ciencyoft hegl obal coal-
fir
edel ect
rici
ty
generationfleetisalreadyimprovi
ng.Ar ound64percentoft henewcoal -
fir
edpl antsbeing
developedwor l
d-widear ebasedonsuper cri
ticalorultr
a-supercr it
icaltechnologies,upfrom
50percenti n2012.I naddi ti
on,Chi
na,thewor l
dslar
gestcoal consumer ,i
sret i
ri
ngits
i
neffici
entplantswi thcloseto100gi gawat t
sofcapaci tydecommi ssionedsince2006.I ndia
accountsf or60percentoft hesubcrit
icalplantsunderdev elopment( IEA2014b) .

The600megawat tIsogoPowerSt ati

onUnit2inJapanhastheworl
dsmostadv anced
envir
onment al
controlsyst
em thatminimi
sessulphurdi
oxi
deandnitr
ogendi oxi
de
emissions.Theplanthasanoper at
ingeff
ici
encyof45percentandequati
ngt oaCO2
reducti
onofov er25percent,
compar edwi t
haplantoper
ati
ngattheglobalaver
age( I
EA
2014b).

Fi
gur
e37:Rel
ati
onshi
pbet
weenCO2emi
ssi
onsandpl
antef
fi
ciency
Sour
ce:I
EA2006.

Car
boncapt
ureandst
orage
Carboncapt ur
eandstorage(CCS)couldbeakeyt echnol
ogyinachievi
ngemi ssi
ons
reducti
ons.IntheI
EAs450Scenar i
o,windgenerat
ionwouldneedtoincreasetwenty
-fol
din
theabsenceofCCS, comparedwi t
hten-fol
dwiththeadopti
onofCCS.Al thought
he
technologyhasbeendemonst r
ated,thepaceofdeploymentwil
lneedtobeacceleratedto
achievecli
mategoals(I
EA2014a, 2014b).

CCSpr event slargeamount sofCO2f r

om beingr eleasedi ntot heat mospher e.Thepr ocess
i
nv olvescapt uringCO2f rom powerpl ant
sorot heri ndust r
ialprocesses, compr essingi tfor
transpor tation, andinjectingi tdeepintosuitabler ockf ormations, typicall
yatdept hsgr eater
thanoneki lomet re.TheCO2i scapturedbysepar atingtheCO2f rom t hef l
uegasusi ng
chemi cal sol vents,membr anesorchangi ngt heoper ati
onoft heboi l
ersot hatthecoal i
s
combust edi npur eoxy geni nsteadofai r
.Thecapt ur edCO2i st ypicall
ytranspor tedtoa
storagesi t
ev i
api peli
ne.TheCO2i stheninjectedv i
adeepwel lsi ntoapor ousreserv oirrock,
suchassandst one,wher ei tfl
owst hroughther ock.Toensur et heCO2r emai nstrapped,
geologi cal storagesi tesar ecar ef
ull
yselectedsot hatt hereisat hickimper meablecapr ock,
suchasmudst one, abovet her eservoirr
ock.Thi sf ormsaseal andensur est heCO2r emai ns
trappedandcannotescapei ntotheat mospher e.St oragesitesar emoni toredtoensur ethe
CO2r emai nst rappedi nther eservoi
randt hereisnosi gnifi
canti mpactongr oundwat er
resour ces, soilorai r.

Fi
gur
e38:Geol
ogi
calst
orageofcar
bondi
oxi
de
Sour
ce:GCCSI2015a.

Thei dentificati
onanddev el
opmentofst or
agesitescanbetimeconsumi ngandexpensive.
Further,thei nstal
lati
onofCCSt echnol
ogyhasbeenest i
matedtoincreasethecostofacoal-
fi
redpl antby4575percent .CCSt echnol
ogyalsorequi
reslar
gevolumesofheatt o
regener atesol v
ent sandel
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Ther earecur
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Par
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Coal i
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Whiletot
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gur
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ll
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Fi
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Sour
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Coal consumptioncanbeusef ul
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