Mobilization of Coal Supply Presented at the IRADe Energy Conclave T.L. Sankar (Advisor Energy Area) Centre for Infrastructure Management ADMINISTRATIVE STAFF COLLEGE OF INDIA Bella Vista: Hyderabad-500 082 27 July 2006

IEP Estimate of Energy Demand Assumed GDP Growth rate = 8% per year. Elasticity reducing slightly over time in case of both TPES and Electricity SL.No. Year TPES (Mtoe) Energy Required Generation (Bill kWh) 1 2006-07 394 761 2 2011.12 537 1097 3 2016-17 718 1524 4 2021-22 961 2118 5 2026-27 1248 2866 6 2031-32 1620 3880 TPES - Total Primary Commercial Energy Supply. Mtoe - Million tonne oil equivalent. B.kWh - Billion units of electricity.

Sources of Power Generation SL. No. Year Total Elect. (B.kWh) Nuclear B.kWh Hydro Wind Coal MMT NG Oil 1 2006-07 761 26 100 5 375 18 6 2 2011-12 1087 59 179 8 493 25 3 2016-17 1524 110 226 12 656 41 9 4 2021-22 2118 206 283 15 814 55 2026-27 2886 301 400 19 1133 89 14 2031-32 3880 441 500 24 1478 134 17 7 Growth rate 2006-2031-32 (% per year) 6.7 12.0 6.6 6.5 5.6 8.4 4.2

IEP Estimates of demand Ranges under scenarios Fuel Ranges of Need Likely domestic production Ranges of Imports Import (%) Oil(mt) 406-493 35 371-458 91-93 Natural gas +CBM(mtoe) 114-224 200 0-24 0-11 Coal (mtoe) 573-1082 560 13-522 2-48 TCPES(mtoe) 1376-1692 - 384-1004 28-59

Coal Demand estimate by IEP (Plan-wise scenario) SL. No. Year Coal Demand for Power Generation MMT Coal Demand for non-power MMT Total Coal Demand 1 2006-07 375 123 498 2 2011-12 493 164 657 3 2016-17 656 221 877 4 2021-22 814 299 1133 5 2026-27 408 1541 6 2031-32 1478 582 2060 7 Growth rate % per year 2006-2031 5.6 6.4 5.8

Coal Production – Achieved/Required Rates of Growth Coal Production (Total) in 1980-81 = 114.01 2004-05 = 382.65 Achieved Growth rate in past 24 years = 5.3% Required Growth Rate as per IEP = 5.8% Let us assume that growth rate increases by 1% over the past trend and is 6.3% Production in 2031-32 could be = 2293 MT.

Measures proposed in Expert Committee on Coal Reforms Delineate the coal reserves situation in India on the basis of international standards UNFC standards. Allow private industry to enter into exploration-cum-mining lease on the lines of NELP in oil industry. Liberalize captive mining procedures and release all areas with CIL which are not covered in their production plans up to 12th plan. Create a Coal Regulatory Authority.

Measures proposed in Expert Committee on Coal Reforms (Contd.) Dual pricing in coal sector. For industries which ensure large quantities of coal and need special infrastructure arrangements and whose end-products prices are regulated, a cost plus basis pricing to be determined by the Coal Regulator: The price of coal to other industries to be market determined through at auction. 6. FSTA arrangements to be introduced.

Measures proposed in Expert Committee on Coal Reforms (Contd.) 7. Encourage coal exports and imports simultaneously each year. Preference in future power plant locations – for pit head and port locations. Undertake immediately measures to introduce and use extensively clean coal technology. Restructuring the coal industry and legal structures governing coal industry.