1. Coal India ‘Vision 2030’ cautious on sector

Coal India ‘Vision 2030’ cautious on sector

Developments in solar and energy storage technologies, downward revision of economic growth, and the NPA crises in the coal-consuming power and steel sectors were identified as some of the main challenges to coal in a study titled ‘Coal Vision 2030’.

By: | New Delhi | Published: February 9, 2018 5:51 AM
coal india, coal india ltd, coal india vision 2010, coal sector, economic growth, NPA The study also estimated that the demand from non-regulated sectors would be about 6% CAGR up to 2030, twice as fast the demand growth in the power sector. (PTI)

Developments in solar and energy storage technologies, downward revision of economic growth, and the NPA crises in the coal-consuming power and steel sectors were identified as some of the main challenges to coal in a study titled ‘Coal Vision 2030’. Coal India (CIL) commissioned the study to assess the future demand scenarios for the domestic coal sector up to 2030 and identify key action areas. The report points out that global trade and economic ambiguities, coupled with changes in technological, environmental and regulatory regimes, have created uncertainty in the energy markets, and continuous monitoring of the changing business environment is necessary to decide industry actions. Overall coal demand is estimated to be 900-1,000 MTPA by 2020 and 1,300-1,900 MTPA by 2030, the report said, adding that there is limited requirement of starting new coal mines except the ones already auctioned/allocated, if demand growth is low. “Although there is limited business case for new mines in the immediate future, say 2022–25 horizon, it may be advisable to monitor the growth in coal demand and decide on new mines accordingly.”

The study also estimated that the demand from non-regulated sectors would be about 6% CAGR up to 2030, twice as fast the demand growth in the power sector. The power sector accounts for nearly 70% of the overall coal demand. Though likely to be significantly lower than potential, coal production would meet demand in the short term. The country produced 671.5 MT of coal in FY17 and 536.4 MT in the first 10 months of the current fiscal.

In line with the Paris commitments, the report forecasts that regulatory framework in the fronts of land acquisition, resettlement and rehabilitation and environment management is likely get stricter, increasing cost of compliance. The requirement of several approvals from multiple agencies for commencing mining already causes delays and cost overruns. The changing nature of the power market might necessitate new coal supply norms, even signing fuel supply agreements (FSAs) with power plants without existing power purchase agreements, the Vision 2030 has speculated.

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