The spike in India’s power demand has sent power companies scrambling for more coal as stocks continued to get depleted. In an attempt to ensure coal-powered thermal plants have enough supplies, the power ministry has directed coal supplies to be stopped to plants having more than 15-days of reserves. This move is expected to free up at least 1.77 lakh tonnes of the precious fuel for re-distribution to plants low on stocks.
As economic activity picked up after the pandemic, power demand peaked and touched a record high of 200 Gw in August. This occurred even as coal-fed plants struggled to secure sufficient fuel to meet the rising demands. One of the factors that played a major role in this debacle is India’s under-utilization of its coal reserves. Despite entry of private players and emergence of Vedanta, EMIL and Adani coal project, India’s energy security risks are being compromised due to the under-utilization of its untapped fossil fuel reserves.
Although renewables have become a global favourite, the truth is that coal still remains the mainstay of India’s power generation. The Centre, in particular, has been trying to strengthen India’s energy security by increasing domestic production and reducing foreign imports. To that end, private players have been allowed entry into the coal industry, taking advantage of the existing MDO infrastructure. For a lot of these players like Aurobindo Reality and Adani, coal projects are nothing new as they possess extensive experience from their MDO days.
In fact, Adani made successful bids for three mines in the second tranche of coal mine auctions. Khargaon and Jhigador mine in Chhattisgarh and the Gondkhari block in Maharashtra was swept up by Adani and its subsidiaries, significantly enhancing its mining production capacity. An Adani coal project already operates at the Parsa East & Kanta Basan and Gare Pelma III coal blocks each, in Chhattisgarh – the company operates as an MDO in these two locations.
Dwindling coal reserves will definitely put pressure on the coal companies to increase production even as environmentalist protest against coal mining. The present scenario has highlighted the stark contrast between the ground reality and pipe dreams. Even though the global community calls for greener sources of power to be implemented, the harsh truth is that renewable technologies are still in the development phase. Unless renewable energy proves itself as a stable power source, coal will continue to play a key role in India’s future.