Non Coking Coal demand in India is on a rising mode and concurrently there are also some initiatives undertaken by the Government of India (GoI) to raise the domestic supply.
SK Agrawal, the Senior Vice President of Vedanta Resources, had analyzed the supply and demand scenarios in respect to Non Coking Coal in India at the recently concluded conference, Indian Coal Mining—Sustainable Growth and Way Forward, conducted by the Federation of Indian Mineral Industries (FIMI) at Kolkata.
Increasing thermal power generation in the country has triggered higher coal demand. The Peak Load Factor (PLF) at coal-based power plants has been showing a declining trend, while the installed capacity base has increased, necessitating more coal. The average annual PLF had declined from 66.4% in FY14 to 61.6% in FY16. And, the installed capacity based had increased to 170 GW. The expected thermal power capacity addition in the next 2-3 years is 46,000 MW. Demand for coal is likely to go up to 200 MnT by FY20, assuming PLF to be at around 60%.
DEMAND DRIVERS
>Around 40 GW of thermal power plants—including Independent Power Plants (IPP) and Captive Power Plants (CPP)—are under construction in the country. These will be commissioned within the next five years. Post commissioning, around 270 MnTPA of additional coal will be required.
>The GoI has planned for proving round-the-clock electricity in the country by FY22.
>The Make-in-India program has envisaged setting up of manufacturing units and industrial corridors, which will result in consumption of electricity to go up; this will entail an incremental coal demand of around 56 MnTPA.
>There are also some hidden demand arising out 32,000 MW of thermal power capacity, which is hidden due to low PLF. If this hidden capacity is activated then around 151 MnT of coal will be required.
Nevertheless, demand for Non Coking Coal is estimated to reach around 1,373 MnT by FY22, growing at a CAGR of 7%. And, the largest consumer of Non Coking Coal in the country is the power sector, which will consume 60% of the coal upto FY32.
SUPPLY INITIATIVES
>The GoI has aimed at producing 1.5 BnT of coal in the country by FY20, indicating private players to play a significant role.
>Coal India Limited to invest USD 804 Mn for purchasing 250 rail rakes for faster evacuation of coal.
>Commercial coal mining will be allowed in the country that will enable private players to participate in the mining process.
> The GoI is likely to put in place a statutory and robust coal regulator.
>The Coal Ministry has actuated auction of coal linkages to assure adequate coal supply.
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