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Themes in this post: India’s coal deposits & production | Power from coal | Future of coal 

In November 2024, I was reading the tender document for a 600 MW solar power plant from Neyveli Lignite Corporation’s (NLC) renewable energy subsidiary NLC India Renewables. Two things struck me. One was that a coal company was giving out a tender for solar power. And two, even more interesting, the coal company had a renewable energy subsidiary.

This should have hardly surprised me as I have long been aware of NTPC’s renewable energy division and also about a number of solar power plants implemented by NTPC.

I guess the words coal and solar coming next to each other was what made me sit up a bit.

We all bash coal quite a bit these days, but we should at the same time acknowledge that if it were not for coal, very few countries in the world would have reached the economic development they have today. India is no exception.

Coal is dirty, no doubt, but we should avoid biting the hand that feeds us. At least we should not bite it too hard.

Coal has been the engine for India’s industrial and economic progress so far. With the furious growth of solar power and on other renewables such as wind power, if you thought that the coal industry was quietly planning for an early retirement, get ready to be surprised.

Availability & consumption

India has approximately 375 billion metric tons of coal reserves. These reserves are primarily located in states like Jharkhand, Odisha, Chhattisgarh, West Bengal, and Madhya Pradesh, among others. Out of the total coal deposits, about 50% are proven, implying they  are recoverable.

The substantial recoverable reserves ensure that coal will continue to play a significant role in India’s energy mix for decades to come. Interestingly however, it is not just availability alone that matters, as evidenced by the fact that #HIndia imports significant amounts of coal#H every year – almost 250 million tons! Why does the country import coal at all when it has such large reserves? Because high-quality coking coal and certain types of thermal coal, which are crucial for industries like steel production, and available in relatively small quantities within its own reserves.

At the time of independence, India’s coal production and use were modest, about 30 million tons. The limited use of coal was concentrated in sectors like steel manufacturing and basic infrastructure development, laying the groundwork for future energy expansion.

In the 1960-80 period, as India began its industrialization journey, coal consumption increased to about 60 million tons annually. By 1980, coal consumption rose to approximately 120 million tons per year. The economic liberalization policies of the 1990s led to a significant boost in energy needs. Coal consumption jumped to 200 million tons annually. Continued economic growth and increased energy demand resulted in annual coal consumption exceeding 800 million tons by 2019. In 2023, India consumed around 1 billion tons of coal, a significant portion dedicated to electricity generation.

For fiscal year #H2023-24, India used almost 1 billion tons of coal#H (965 million tons). The country also produced almost a billion tons of coal. Such massive amounts signify the importance of coal for India’s economy and its power generation.

The contribution of coal to India’s economy doesn’t stop with power generation.

The coal sector employs approximately 1.5 million people directly – in coal extraction, including underground and open-pit mining operations, in coal-fired power plants, and in roles in areas such as transportation and logistics within the power plant, and equipment maintenance related to coal production and power generation. Millions of indirect jobs happen in coal transportation and manufacturing of coal related equipment.

Once again – we should be a bit mindful before we bash coal.

Coal contribution to power generation

In 2000, approximately 75% of India’s power generation was from coal. By 2010, the proportion slightly decreased to about 70%, marking the beginning of a gradual rise in renewable energy sources. By 2015, coal’s contribution dropped to around 65%, reflecting the increasing share of renewables in the energy mix. By 2020 however, the proportion of coal in the power mix rose again to approximately 73%, as India expanded its coal power capacity to meet rising demand.

As of 2023, coal’s contribution remains around 70%, indicating resilience amidst the strong growth of renewable energy sources.

In fact, #HIndia and South Africa#H have the dubious distinction of being two prominent economies currently having #Hover 70% of their power generation from coal#H.

Coal’s ability to provide base-load power – consistent power output regardless of weather conditions – ensures its continued relevance in India’s energy strategy.

The future of coal

Underlining coal’s importance for India’s economy, for the 2023-2033 period, the government of India had announced its plans to add approximately #H80 GW of new coal-fired capacity#H.  That would be the equivalent of about 300 GW of solar power plant, assuming these coal power plants run at reasonable capacity utilization factors. At current targets, India will be adding about 300 GW of solar power for the same period. Thus, additional power generation from coal will be somewhat on similar lines to additional power generated from solar power plants for the next ten years!

Clearly, the Indian government’s energy policies support the expansion of coal capacity while simultaneously promoting the growth of renewable energy sources. Well, this might not be music to our ears, but I agree that this is a more pragmatic approach.

Coal might not be generating power around 100 years from now, but 100 years is a long time.  Economies and industries have to plan for the next decade and two. For these time periods, coal is still needed as the main source of power generation for many economies worldwide, including India.

Don’t count out coal – not yet, not for a while.