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‘Coal Cannot Be Abruptly Expunged From The Energy System’

India’s transition from coal to renewables is not going to be easy or without consequences. Pramod Agrawal, chairman of state-owned Coal India Limited, weighs in

India’s transition from coal to renewables is not going to be easy or without consequences. Pramod Agrawal, chairman of state-owned Coal India Limited, the world’s largest coal producer with 318 mines across eight states and 2,48,550 employees, weighs in. Edited excerpts:

What does India’s commitment to increase its renewable energy share to half of the total demand by 2030 mean for the coal sector?

The roll-out of the renewable energy sector, with plans to increase its capacity to 500 gigawatts (GW) by 2030, is a welcome step from an environmental perspective. However, it does not pose an existential threat to the coal sector. More than 55% of India’s primary commercial energy is met by coal. This percentage share in the energy basket may shrink, with renewables and cleaner energy sources gradually occupying more space, but coal will continue to retain its energy dominance for at least the next two decades. Notwithstanding the renewed interest and ramped-up investments in renewable energy, coal cannot be abruptly expunged from the energy system—especially without alternatives to shoulder coal’s share of energy contribution in the country.

In a country like India, do you think it is possible to replace coal as an energy source? Do renewables have the capacity to serve the demand coal caters to?

Today, 70% of India’s electricity is generated from coal. Of the total 570.027 billion units (BU) of power generated till July of the current fiscal, coal-based generation accounted for 397.196 BU. Of this, 96%, or 380.928 BU, was generated through domestic coal where the bulk of supplies were from CIL. In comparison, wind, solar and other renewable sources generated 74.747 BU. This represents 20% growth over the comparable period of last year.

The fact is that the sharp focus on renewable energy sources has resulted in India’s installed renewable energy capacity quadrupling during the past nine years. It stands at nearly 160 GW (including power generated by large hydro plants) as of March 2022. India is also committed to increasing the share of renewable energy production in a bid to eventually phase down consumption of coal and fossil fuels.

But, the more than fivefold difference in generation between coal and renewables conveys the current reality. Till this gap narrows down considerably, coal cannot be replaced or dethroned from its energy pedestal. It is bound to happen at some point in time in the future, but, till then, coal remains an irreplaceable energy option. It would continue the lead role in India’s electricity generation as indicated by its current consumption pattern. What makes coal a preferred energy fuel in India is its abundance, availability and affordability.

Even the countries which have steered away from coal usage are returning to it with energy shortage tightening globally. But, our country is relatively well placed. CIL is spearheading India’s coal growth and meeting the energy requirements. CIL’s production, offtake and supplies to the power sector are at an all-time high. So far, during the current fiscal, we have produced
43 million tonnes more coal than we did a year ago. Only once before has CIL’s production increase in volume terms gone past this mark—to 45.2 million tonnes in 2015-16—but that was for the entire year.
CIL has a coal production target of 1.2 billion tonnes by 2023–24. Is that not in conflict with the renewable goal?

I do not think these two sources of energy will be in conflict. They will complement each other in meeting the country’s growing energy demand. They have to coexist till renewables are able to substitute the role of coal in a significant manner.

Coal is a highly labour-intensive sector. Renewables, in contrast, are machine dependent. Are we prepared to deal with the human cost of this policy transition?
Skilling of the workforce in the arenas where the company is focusing to diversify into is essential for their effective utilisation. CIL has over 100 vocational training centres and decades of experience in imparting skill development. Permanent employees will not be as vulnerable because coal companies provide sufficient financial protection, including superannuation social security dues. The main concern is for the peripheral community, project-affected people, people working in the unorganised sector and ancillary sectors and those subsisting on the informal economy. Rehabilitation of this segment will be crucial.

Is there a ratio of future investments that will be set aside for states where most of your mines currently exist, or will you go by business opportunity?

CIL’s investment plans will be in accordance with production needs, coal demand and setting up of environment-friendly seamless transportation infrastructure to handle the additional quantities of coal produced by constructing rail lines and procurement of technologically advanced equipment. Land acquisition is also a major component in our capex.

Rather than being state specific, the investments will be defined by the need and requirement.

Given the massive size of CIL, how does it plan to reinvent itself in the renewable energy sphere?
Coal production remains our primary growth engine. However, we are getting future ready. Considering the expected slowdown in coal demand in the next 20 to 30 years, we are looking beyond coal and focusing on renewable energy—particularly solar power generation as a major step towards diversification.

As an alternative use of coal, we are exploring clean coal initiatives like surface coal gasification and coalbed methane extraction. Ammonia and ammonium nitrate production are other focus areas. CIL intends to position coal from an energy product as a chemical product, which can help India in reducing its forex bill.

A few more front-end technologies are being discussed which are still on the anvil. Our diversification initiatives will be in a win-win approach with an eye on our bottom line. To remain ahead in the energy field and retain our relevance as the energy leader in the country, it is imperative that we reinvent our operations and branch out.