Coal imports for blending to be eliminated in FY21
Industry insiders are apprehensive about the government's recent move to push the coal sector into private hands. While the Centre has claimed that privatisation of the sector will improve demand, investment, governance and transparency, the coal gasification move, particularly, is seen as a non-viable business.
"There are some grey shades to the government's move on the coal sector. To start with coal gasification; it may not be an attractive move for private players. The intensive extraction process requires the use of large quantities of water. For a country like India, which is suffering from acute water shortages, this will only add to the pressure on the sector," a top industry source told this correspondent on Monday on condition of anonymity.
Recently, finance minister Nirmala Sitharaman announced sweeping reforms and opened up the coal sector to private parties. The major decisions included converting coal into gases, open bidding for nearly 50 coal blocks and Rs 50,000-crore outlay to create infrastructure for coal evacuation over the next five years, besides concessions and incentives.
The government claimed that coal gasification, being technologydriven, will lower the environmental impact, but this raises many a question. "While it may be argued that gasification doesn't cause local pollution as much as a coal
New Delhi, May 25: The Centre has decided to bring to zero import of coal for blending purpose by domestic coalbased power plants in the current fiscal, and has asked state-owned CIL to enter into a pact with power generation companies for domestic supply of coal.
"Several initiatives are being taken for supply of domestic coal as import substitution and the same has been deliberated in the meetings held on April 4 in thwe Ministry of Coal .... and in the Ministry of Power," Coal India Ltd said in a letter to its subsidiaries.
"It has been decided to bring the level of import of coal for the purpose of blending by the domestic coal-based power plants to zero level in this fiscal," it said.
The country has abundance of domestic coal, it said. plant does, the truth is that it is much worse on many counts. Most importantly, the process of gasification of coal involves pulverisation, which turns coal into smaller particles and synthetic gas, under pressure," the source said.
"The overall carbon intensity of gasification is even worse than coal mining, and such a technology does not seem attractive at all from any point of view. Coal gasification is also an intensive extraction process, which uses large quantities of water," experts said.
They also pointed out that the gas formed is corrosive in nature, which will increase the cost of maintenance.
As per Care Ratings findings, the ailing power sector does not stand to gain from the reforms in the short-term, with an accumulated coal inventory scaling to 51 million tonnes as on May 13. "The decision to spend Rs 50,000 crore for evacuation facilities is expected to add to the volume over the long-term and it would have very little impact in the short period," it said.