Coal Sector: Stricter Regulation, Lack Of Tech And Cost Overruns Major Challenges

Coal Sector: Stricter Regulation, Lack Of Tech And Cost Overruns Major Challenges

At a time when the Central government is battling the problem of low coal stocks in over 50 power plants in the country, a study by Coal India Ltd (CIL) has listed out the headwinds impacting the coal sector, including the emergence of renewable energy as a viable key substitute, increase in the cost of compliance due to the strict regulatory environment, delays in getting requisite clearances and the resultant cost overrun. Alongside these, small-scale mining prevalent across the sector with limited mechanisation, low operating performance as compared to global peers and the likely emergence of imported coal as a viable substitute are among the other challenges.

CIL commissioned the study, titled ‘Coal Vision 2030’, to assess the future demand scenario for the coal sector in India up to 2030. The study also listed some of the numerous global and domestic events that have “intensified” the doubts on the future of coal: “COP21 (Paris agreement) commitments by India; apparent shrinkage in global coal consumption; apparent downward revision of the economic growth projections of India; tepid response to recent tranches of coal block auctions; NPA (non-performing asset) crisis, especially in the steel and power sector that are two major consumers of coal and important sectors linked to economic growth.” As on February 11, there were 52 thermal units that had less than seven days of coal stocks, according to data from the Central Electricity Authority. Read More…

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