Politics

India to surpass Australia and USA to become the second largest producer of coal!

India is taking a leap in every aspect and is gaining global attention. India is now all set to become the second largest producer of coal in the world surpassing Australia and USA. International Energy Agency (IEA) has said in its latest World Energy Outlook 2018 report that India is all set to overtake the coal production and become the second largest producer in the world by 2020.

India is estimated to produce 955 Megatonne of coal equivalent (Mtce) in 2040 as compared to 395 Mtce produced in 2017, growing at an annual rate of 3.9 per cent, according to the much-cited report published by the Paris-based agency.

“India overtakes Australia and the United States in the early 2020s to become the world’s second-largest coal producer behind China (in energy terms; considered by mass, India is already the second-largest coal producer). Steam coal accounts for the majority of coal production growth in India as coking coal output is limited by coal quality, i.e. the high ash content of Indian coal,” the report said.

Also, the World Energy Outlook 2018 report projects that India will become the largest coal importer, overtaking China through 2020s. The country’s coal imports are expected to reach 285 Mtce in 2040 from 172 Mtce in 2017.

“India, which became the world’s second-largest coal consumer in 2015, is the single-largest source of global demand growth in the New Policies Scenario. India is pushing strongly to expand the role of renewables in its power mix, yet robust growth in electricity demand still means a near-doubling in coal-fired power output to 2040,” IEA said.

The report states that despite an overhaul of the coal allocation system, as of April 2018, more than 50 Million Tonne of coal is stockpiled at mines awaiting transportation, leading to imports.

“Around 90 per cent of domestic coal in India is allocated through long-term fuel supply agreements to end-users at notified prices. Auctions and short-term purchases are typically only used by small consumers or those who are unable to access coal on long-term contracts. The logistics system is often slow to respond to fluctuations in demand and, with bottlenecks in the rail network, there is often a shortfall in supply in critical months, meaning that plants resort to imports,” IEA said.

The IEA’s analysis also pointed out certain drawbacks of the Indian system and the bureaucracy which is affecting the pace of coal production capacity expansion and the delivery of adequate quantities to various users.

The report stated that India suffered major drawback in the production of coal in the past 2 decades which resulted in the decline in the quality of indigenously produced coal in terms of calorific values and high mineral-ash content. It added that there are 17 grades of non-coking coal allocated to the various sectors and there are frequent disagreements between end-users and suppliers on the quality and quantity of coal delivered.

The World Energy Outlook 2018 report projects that India will become the largest coal importer, overtaking China through 2020s. The country’s coal imports are expected to reach 285 Mtce in 2040 from 172 Mtce in 2017.


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