Stalin seeks PM help for coal; Maharashtra to import stocks

• The Tamil Nadu Chief Minister wrote to the Prime Minister, requesting him to ensure adequate availability of coal for the power generation units in Tamil Nadu.
• Separately, Maharashtra’s Deputy CM said the government planned to import some coal in order to cope with the electricity crisis in the State.

Coal Crisis in India

• Coal stocks at more than 100 thermal power plants in India have fallen below 25% of the required stock, according to the latest data.
• The stock in more than 50 thermal plants has fallen below 10%, prompting states to seek additional coal supplies.
• Thermal power plants, which are mostly powered by coal, meet 70% of India’s power demand.
• Nine thermal power plants with a combined capacity of 3.56 GW are currently non-functional.

Reasons for Coal shortage in India

• Rise in demand: The primary cause of coal scarcity is rising power demand. During the months of April to October, there is a high demand for electricity, which frequently results in a power shortage. The higher demand for electricity can be attributed to heatwaves in several north Indian states.

• Supply chain disruptions: In 2021, due to shipping delays, India experienced a major coal shortage, with stocks plummeting to historic lows. The coal shortage has worsened as global coal prices have risen and supply has been disrupted mainly due to Covid-19 pandemic.

• Depletion of coal supplies: This crisis has resulted from the depletion of coal supplies at thermal power plants, India’s main source of electricity.

• Russia-Ukraine crisis disturbed imports: The ongoing Russia-Ukraine conflict has exaggerated the coal shortage as the thermal power companies have been unable to obtain coal loads from Russia.

Impact of coal shortage:-

Measures Adopted by Government:

• The Center has allowed states to use up to 25% of their captive coal reserves to meet rising domestic demand. It also allows power plants to blend imported coal up to 10% of the time to reduce CIL’s burden.
• In 2020, the Center passed mining reforms to break CIL’s monopoly on coal production in India.

Laws and Important Provisions

Mineral Laws (Amendment) Act, 2020

• Amendment to provide for allocation of coal blocks for composite Prospecting License-cum-Mining Lease (“PL-cum-ML”) to help in increasing the available inventory of coal/ lignite blocks for auction.
• FDI Policy in the Coal Sector allowing 100% FDI through automatic routes for sale of coal, coal mining activities including associated processing infrastructure.

Provisions to remove the requirement of previous approval in cases where the allocation or reservation of coal/ lignite block is made by the Central Government

Amendment in Mineral Concession Rule 1960

• Registration of Qualified Persons for Mining Plan preparation is no longer required.
• Empowering block allocation to make minor changes in the mining plan and reducing the requirement of repeated approvals thus giving flexibility in operation.
• An option is now available to the Coal Block to engage an Accredited Prospecting Agency for conduct of prospecting operations and preparation of Geological Report (GR) with a view to expedite exploration, bringing technology and faster growth to the coal sector.

Recommendations

• Mining Rebound: The government should focus on rebounding the mining operations amidst weather conditions such as flooding.
• Prioritize Power Generation: Government and industry should work to closely monitor stocks, and move to divert supplies away from industrial users to prioritise power generation.
• Supply controls: Rationing domestic power supplies, especially in rural and semi-urban areas, may emerge as one of easiest solutions.
• Price incentive: Soaring power prices could potentially make it viable for some coastal plants to use high-cost imported coal. The government can provide price intensives to ease some of the burden on domestic miners.

Focus on Alternatives:

• Hydropower Generation: The monsoon rains that result in flooding of coal mines can be utilized to boost hydro-power generation. Large hydro-electric projects on dams are India’s major electricity source after coal.
• Natural Gas: There could be a larger role for natural gas to play, even with global prices currently surging. India has almost 25 gigawatts of gas-based generation capacity, though nearly 80% of that capacity remains unused because of high prices of the fuel.

Exam Track

Prelims Take away

• Energy Resources
• Types of Energy Resources