The Biggest Achievement : Cleaning Up India’s Coal Mess

The Biggest Achievement : Cleaning Up India’s Coal Mess

We at EnergyInfraPost.com feel that the biggest achievement of this government and Minister Piyush Goyal is to clean up the coal mess in India, whether it meant putting in place a system for transparent allocation of coal blocks or efficient utilisation of coal by thermal power plants.

The most important achievement is indeed streamlining coal availability at thermal power plants, as inadequate coal supplies was often cited as the reason for frequent power cuts by both the power producers and also the erstwhile UPA government.

So what changed during the NDA regime that streamlined the coal availability at power stations?

Lower coal production by its state-owned firm, Coal India Ltd (CIL) was often cited as a reason for less electricity generation by its power plants and hence growing power cuts. However, the first thing this government did was a performance check at CIL and its subsidiaries. Within days of the Modi government taking over the reins of the country came the promise from Minister Piyush Goyal that the production of CIL will be increased manifold.

Many thought this is another promise that will be broken soon but seldom did one realise that this alone shall emerge as this government’s biggest achievement two year’s down the lane.

Today, although it is still a long way to go but a higher coal production by the same state-owned CIL has already helped the country save Rs 28,000 crore of the precious forex outgo in 2015-16 on account of lower coal imports. CIL recorded a 6.9% increase in coal production during 2014-15 and 8.6% growth in 2015-16. Click To Tweet

Going forward, Goyal promises that coal imports will be reduced further and the country will save Rs 40,000 crore in foreign exchange on account of lower coal imports during the current financial year.

“Last year (fiscal), we saved Rs 28,000 crore in foreign exchange. This year, we are targeting Rs 40,000 crore,” Goyal told said after the launch of the web portal on ‘Contract Labour Payment Management System’, he told the website.

Goyal enthusiasm is understood when he says, “There is not a single coal-based power plant in the country which has critical coal stock position….Today thermal power plants in India have an average coal stock of 26-27 days.”

As per Coal Secretary Anil Swarup, CIL’s output for this fiscal is fixed at 598 million tonnes. An interesting tweet by him read, “the colour of coal is changing for the better and record coal production by CIL leads to reduction in import by 34.26 MT. Results in a saving of Rs 28,070 crore in foreign exchange during 2015-16.”

Indeed this calls for an applause when imports of this crucial natural resource came down by 27.4% to 15.54 MT in March, last fiscal, from 21.42 MT during March 2014-15. In 2015-16, Coal India had achieved a production of 536 MT.

Then this government has the credit to have transparently auction 31 coal blocks and having allocated 43 blocks from the 204 coal licenses cancelled by the apex court in 2014.

Streamlining the coal allocation process is a move that will see the coal bearing states get potentially richer by over Rs 3.44 lakh crore over the lifetime of coal mines from auction to allocation of coal blocks.

READ  PF Accounts Of 96% Coal Mine Workers Linked To Aadhaar

What the Minister Piyush Goyal Has To Say On His Achievements :

“We have a long journey ahead of us. I do hope that in these two years, we have been able to create a structural frame work where people have hope and confidence that things can be done honestly, things can be done with a great degree of participation and cooperation amongst difference sections of all the stakeholders. I am also finding that the confidence has come back for fresh investments in this sector,” Piyush Goyal.

Coal-Mess-Cleaned

Goyal has promised to give this nation, “One grid, One price and 24×7 Power.” Lets take a closer look at the pace of reforms :

  • The Reforms by NDA Govt and Promises of 24×7 Power to All: This government’s major power sector reform initiative has been the launch of UDAY Scheme or the Ujwal DISCOM Assurance Yojana—A scheme that promises to turnaround DISCOMS through energy efficiency (which has presently become a buzzword in the country).

From distribution of LED bulbs to energy efficient fans to LED tube lights and soon energy efficient ACs in urban and rural areas to launching of smart SIM enabled agricultural pumps in rural parts of the country is giving a new lease of life to states finances or the gains they are reaping through such energy efficiency schemes.

“Personally, I think efficiency gains in terms of UDAY — where we are talking about Rs 1,80,000 crore savings per year that all the states which join into UDAY can enjoy. My sense is that when all states come on board, which I am quiet sure of, all these gains will be enough to take care of the existing requirements of the DISCOMs,” Goyal said.

So far, 9 States and one UT have already signed the Memorandum of Understanding (MoUs) with Ministry of Power under UDAY. The real benefits of signing these MOU by various states would accrue to the people of these states as reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers and will increase consumption.

Higher demand for power from DISCOM would mean higher PLF of Generating units and therefore, lesser cost per unit of electricity which would again mean lesser cost per unit of electricity to the consumers.

Goyal-Good Pic

My plans are to provide energy efficient lighting, covering the entire country by 2019 and distribute 77 crore LED bulbs under the Unnat Jyoti by Affordable LEDs for All (UJALA) scheme, a move that will cut consumers bill by over Rs 40,000 crore annually.

As of now, power ministry’s energy efficiency arm–EESL has distributed over 10 crore LED bulbs under UJALA, a move that has led to significant savings to the country and consumers who are using these bulbs.

In 2014-15, the total number of LED bulbs that were distributed was mere 30 lakhs. The number of LED bulbs distributed in 2015-16 has crossed 15 crore, where 9 crore LED bulbs were distributed under UJALA and the remaining were contributed by the industry.

For this year, the Government is confident of distributing an additional 20 crore LED bulbs. “Sustained efforts under UJALA, coupled with industry support, will help the government achieve its objective of replacing 77 crore inefficient bulbs by March 2019,” Goyal added.

Then, the Modi government’s scheme for Indian farmers to replace the 20 million age-old agricultural pumps across the country with the new-age SIM enabled energy efficient agricultural pumps, with a 5-Star Rating—will help the country save close to Rs 20,000 crore annually on agricultural subsidies,

READ  400 Apprentices required for Northern Coalfields Limited; Check here for more details

A massive roll out of two lakh smart agricultural pumps is planned sometime in June in Andhra Pradesh, the state for which the scheme was first announced by Goyal on April 7th. After rolling out the scheme in Andhra Pradesh, the power ministry will take this scheme to others states including Maharashtra, Rajasthan, Punjab, Haryana, Karnataka, Jharkhand and others.

These Agricultural Pumps will come enabled with smart control panel and a SIM card, giving farmers the flexibility to switch-on and switch-off these pumps from their mobile phones and from the comfort of their homes.

“Our larger focus is on agricultural pumps. India uses some 20 million very old age agricultural pumps which are energy guzzlers…then there are another 10 million agriculture pumps, which are working on diesel or other forms of power…so our effort is to make these old pumps energy efficient and replace diesel will electrified pumps in the next 3-4 years,” Goyal said.

Update On Rural Electrification and Promises to Deliver 24×7 Power:

A week-on-week progress is being shared by the power ministry based on the feedback received from states. As on May 8th, 2016, as many as 7549 villages stand electrified across the country under the Government’s Deen Dayal Upadhyaya Gram Jyoti Yojna (DDUGJY).

As on May 2016, 7549 villages stand electrified under Deen Dayal Upadhyaya Gram Jyoti Yojna Click To TweetOut of these electrified villages, 6 villages belong to Arunachal Pradesh , 33  in Assam, 12 in Jharkhand, 9 in Rajasthan, 23 in Bihar, 5 in Chhattisgarh, 3 in Odisha , 1 in Manipur , 12 in Uttar Pradesh and 1 in Himachal Pradesh.

The Road-Ahead: Prime Minister, Narendra Modi in his address to the nation on Independence Day announced to electrify the remaining 18,452 unelectrified villages within 1000 days i.e. by 01st May, 2018. On his part, Minister Goyal is confident of accomplishing this target a year before by 2017.

State-specific action plans for 24×7 power for all have been signed with 21 states and UTs and finalised for another 12 states and UTs.

Stranded Gas Based Power Projects

India was stranded with 28000 mw of gas based power capacity when the Modi led NDA government took over on May 26, 2014. Two years down the lane, we hear that close to 11,500 mw plus of these projects have started generating power.

What’s the fate of the Remaining Gas Based Power Plants:

Piyush Goyal assures that the balance will also be supplied affordable gas to start generating electricity and that the government is in discussions with leading global gas suppliers to contract at least 70 to 80 million metric standard cubic metres (mmscmd) of natural gas through long-term contracts between 10-15 years and at affordable rates (of around $5 per mmBtu).

Progress of RE in India : 

With due focus on solar and wind projects, the percentage of Renewable Energy in India’s Total Power Generation has also seen a consistent increase from 4.97% in 2012-13 to about 5.7%, as on February, 2016. The larger goal is to add 175 GW by 2022.

READ  PM underlines consolidated approach to complete infra projects

Govt’s Boost For Solar Power Plants on Waste Land 

Government is encouraging use of waste land for installation of solar power plants and setting up of solar parks is a step in that direction, Goyal said. Under the scheme, 32 solar parks of 19,400 MW capacity have been sanctioned in 20 states so far. A solar capacity of 20,000 MW has been targeted under the existing solar park scheme, which includes use of waste land also. The the total target for gird connected solar power plants is 60,000 MW by 2022.

Harnessing of Solar and Wind Energy in Rural Areas 

The Ministry of New & Renewable Energy (MNRE) is implementing a Programme on “Off-Grid and Decentralized Solar Applications” for promoting use of solar power through solar home lights, solar street lights, power plants, solar pumps and mini micro grids to meet the energy requirements of the rural areas of the country.

Alongside, the MNRE is also implementing National Biogas and Manure Management Programme in rural areas of the country, wherein family type biogas plants are installed to meet cooking and motive power requirements. Under this programme subsidy is provided based on the size of the plant and its location either in special category states or in other states.

India’s total installed Power generation capacity of 2.98 lakh MW  (as on 31.03.2016)

(FIGURES IN MW)

@ :  Renewable Energy Sources capacity is as on 31.12.2015

India’s Coal Based Generation Capacity is 62.13% of the total installed capacity of 2,98,059.97 MW as on March 31, 2016.

What Needs Goyal’s Attention:

  • India’s Hydro sector has comparitively remained neglected and needs to be focussed at. State-owned NHPC, the leading hydro power company is languishing behind the targets set for completing hydel power projects in the country.

  • Wind Power also needs a focused approach as in case of Solar Power projects

  • Gas based power capacity that still remains idle needs to be fixed at the earliest as massive investments have gone in setting up of these projects.

  • With the country’s installed power capacity of 2,98,000 mw, the actual power demand that is being met is around 1,45,000 mw. This raises a question mark on the remaining power capacity that needs to flow into the system. The minister needs to fix this.

Anupama Airy
Follow Me

Anupama Airy

Founder and Editor at EnergyInfraPost
Independent Journalist and Energy Expert.​ (Worked with leading mainline financial and national daily for 23 years.​)​ Also, Guest Contributor with busines​sinsider.in
Currently, Writing a Book for Penguin India Titled Greased Pole:How Politics and Lobbying Stifled India’s Energy Dreams. The author can be reached on anupama.airy@gmail.com (9810661825)​
Anupama Airy
Follow Me