We have a crisis in India, and it is not with the climate.
Power plants for the world’s second largest consumer of coal are running out of stock, leaving a billion people at the risk of blackouts and forcing industries to close facilities.
To resolve the situation, the Indian government has authorized increased importation of thermal coal, removed all import duty on coal, is reopening hundreds of closed coal mines, and has asked existing domestic mines to produce at unprecedented rates. The country has even canceled dozens of commercial trains to make room for the freight trains that carry coal.
Coal-fired plants produce more than 70 percent of all electricity consumed by India’s 1.3 billion people.
Indicating greater demand, coal-based electricity registered a 3.12 percent increase in March 2022 compared to a year ago. Coal shortages can have a devastating effect on the Indian economy.
For the past year, the country’s coal-fired plants have suffered occasionalfuel shortages, and the problem has resurfaced. The Central Electricity Authority’s daily coal stock report on April 29 showed that 56 plants had no more than a 10 percent inventory reserve with 26 plants having less than a five percent reserve.
To ensure increased deliveries to the plants, the government has resorted to desperate measures. Forty-two trains were canceled in the country to free up tracks for expedited movement of coal freights. Authorities said the cancelations were indefinite and would not be reversed until coal inventories improve.
The head of country’s railway department said, “There is a 20 per cent rise in the demand and consumption of coal from last year. In the month of April 2022, we have transported 15 per cent more coal than we did in April 2021.”
There has also been heightened activity in the import sector, with more states trying to acquire coal stock for their plants. India generally imports more coking coal, which is used for such processes as steel manufacturing. However, with the increase in electricity demand, imports of thermal coal seem to be overtaking those for coking coal.
In order to facilitate import, the Indian government has now removed all import duty on coal.
The government is also providing import loans to its coastal thermal power plants. This means that despite an anti-fossil government in Australia, imports from Australia could increase sharply. India’s unrestricted policy on coal import could also have a significant impact on global coal trade and pricing.
Most of country’s coal demand is met by domestic production. The state-owned Coal India has been given a mandate to mine as much as possible. The world’s second biggest coal producer, India registered 27 percent growth in April compared to last year.
The country’s leaders are very clear: India’s energy security is primarily dependent on its coal sector. Last week, Pramod Agrawal, chairman of Coal India, said, the company’s “priority is to ensure that the nation’s power plants are well stocked with domestic coal and the country gets power at a just price. The aim should be to securitize energy at least cost.” He encouraged employees to exceed a 700 million-ton production target.
Coal shortages were partially blamed on increased demand for domestic production caused by higher prices for imported coal and natural gas, along with an upswing in the post-pandemic economy. “It is not a coal crisis but a power demand-supply mismatch.,” said Coal Secretary A.K. Jain.
Last week, the government issued orders for reopening of more than a 100 closed coal mines to boost production. In a bold and rare move, the Indian government has also exempted its existing coal mines from getting environmental clearance for increased production. Some active coal mines may produce as much as 40 percent more coal this year, potentially adding150 million tons to the current production target.
With a 2030 goal of producing 1.4 billion tons, India is expected to massively increase use of the fossil fuel despite the country’s being part of international climate agreements.
Neighboring China too has been increasing coal production in apparent contradiction to bold goals for reductions in emissions. And like India, China has been facing electricity shortages with unprecedented blackouts in more than 15 provinces during 2021.
The reality of developing economies like India’s proves the falseness of the mainstream media’s narrative that coal and other hydrocarbons are fuels of the past.
This article originally appeared at Real Clear Energy
- Vijay Raj Jayaraj
- “Vijay Jayaraj (M.Sc., Environmental Science, University of East Anglia, England), is an Environmental Researcher based in New Delhi, India. He served as a Graduate Research Assistant at the University of British Columbia, Canada and has worked in the fields of Conservation, Climate change and Energy.”
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June 12, 2022