1. Coal as Green Energy Source
IEF 7th Coal Summit: Can India Grow Sustainably without Green Coal
5-6 September 2018, New Delhi

2. Micro-level: Intuitively the higher the heat value lower the emissions and reduced transportation costs of washed coal
Macro level: On account of efficiency gain and lower cost, coal use may increase which would mean rising CO2 level even though total SPM emissions reduce
Use of washed coal will increase significantly if the price of coal is deregulated
Coal beneficiation is a case for economic efficiency more than energy saving
Coal washing is more efficient as a measure to reduce local air pollution than as an instrument of climate policy (CO2 reduction)
Coal washing: case for economic efficiency not CO2 reduction at macro level

3. Command and control environmental policy not the most efficient
The ‘top-down’ ‘one size fits all’ approach regarding coal beneficiation policy is not the most economic means to achieve environmental policy goal
Flexible approaches to achieving environmental policy goals on the basis of coal quality, transport distances, boiler technology etc on a case by case basis may elicit greater compliance to the directive limiting ash content.
The disadvantage of flexibility: require judgements to be made locally; local bodies such as the State Pollution Control Board would require high quality local monitoring capacity
Command and control environmental policy not the most efficient

4. For efficient outcome washery must be set up by coal producer
Concern about the quality of coal does not unambiguously point to setting up of washeries
It points to an absence of quality assurance by the producers, an issue that can be addressed through policy and regulation.
At the power plant level since only one part of the benefits (from freight savings) will be immediately visualised and other benefits (like improvement in plant availability and thermal efficiency) felt in the long term only, it is unlikely that demand for washed coal will materialise spontaneously without any push from policy
Developing coal washery in a cost effective manner is possible only if the coal washery is set up by the coal producer
sharing of the common facilities is cost efficient
For efficient outcome washery must be set up by coal producer

5. Long term supply contracts will protect producer and consumer interest
Ahead of further de-control in the coal sector, widespread introduction of long-term coal supply contracts may be desirable to protect producer and consumer interests.
Serve as the natural medium to govern the supply of washed coal
If producers see a customer demand for clean coal, they would build, own and operate such a plant themselves, following the general model adopted internationally
Long term supply contracts will protect producer and consumer interest

6. General comments on greening coal
Focus must shift from fuels (coal/solar/etc) to electricity and what consumers are willing to pay for values such as (greenness, reliability, convenience) in electricity
Electricity: an essential good with no real substitutes across majority of the services it provides
Electricity is also a network industry: This means that it is impractical for consumers to have different levels of reliability or greenness.
Even if technically achievable the transaction costs of letting individual consumers decide their own level of value preference (greenness/reliability) may be too high.
General comments on greening coal

7. General comments on greening coal
Technology of 20th century electricity systems were designed to most efficiently reflect the industry’s costs and prices.
kWh pricing based on merit order electricity markets have promoted operational efficiency by ensuring that the lowest marginal cost plants at any particular time are those called to operate
Consumer preferences (such as their degree of ‘greenness’ or degree of reliability) were given low priority
Historically consumers wanting convenience and cleanliness drove the shift to refined petroleum and grid based energy forms (natural gas and electricity) even though they were costlier than coal that they replaced in some end uses
India’s low carbon transition could also be driven by consumer preference for reliable, clean energy rather than by substitution at the supply end as it is envisaged today
General comments on greening coal