India, the world’s second-largest coal producer and a net importer of the fuel, is expected to begin exports by FY26 as the country expects output to exceed local demand over the next two years when supplies from new coal mines enter the market, coal secretary Amrit Lal Meena said.
India is expected to produce 1 billion tonnes of coal in the year starting 1 April, up from an estimated 880 million tonnes in the current fiscal year, Meena said in an interview. The government is exploring supplying the surplus coal to neighbouring countries, such as Bangladesh and Sri Lanka, with coastal connectivity, he added.
The move to export the mineral gains significance as India remains a net coal importer despite having the fifth-largest reserves in the world.
“After two years, we will be in a position to have surplus coal for exports," Meena said, adding that the growth in coal production would be supported by fresh supplies from coal mines auctioned in the past two years and those that are to be put on the block.
“Out of the mines which were auctioned in 2020, four have come into production. They have produced 8 million tonnes of coal. Under normal circumstances, it takes four years for mines to be operational. But they worked hard, and four mines are operational in two and a half years. Next year, another 4-5 mines will come into operation, and the year after that, many more mines will come up."
The government’s commercial mining scheme offers incentives for early production.
If coal is produced before the scheduled date of production, then a rebate of 50% will be allowed on the final offer for the quantity of coal produced. This has motivated operators to expedite coal production.
Coal India, too, is making efforts to increase output with the Centre trying to resolve all regulatory issues, including land acquisition, he said. The world’s largest miner would produce 700 million tonnes in FY23, Meena said, adding output may reach 780 million tonnes next year.
India’s plan to boost production and even explore surplus coal comes as the country prepares for record peak power demand during the summer months of April and May.
With coal supplies playing a key role in meeting power demand, efforts have been made to ensure adequate supplies to power plants, and no shortfall is expected this year, Meena said.
Concerns have, however, persisted given the power crisis witnessed in April-May last year with the low availability of domestic coal and the rakes required to transport the mineral to the power plants.
The Union power ministry has directed electricity producers to blend 6% of imported coal till September to meet peak demand to avert a similar crisis this year. According to Central Electricity Authority, peak electricity demand is expected to touch 229GW in April, but demand is expected to taper off as the monsoon kicks in across India, cooling temperatures.
The secretary also noted that while the clean energy transition is picking pace, coal will remain the mainstay of the country’s power sector in the coming years.
Despite setting ambitious climate targets, India has decided to commission 29.2GW of new coal-based plants by the end of March to meet rising power demand.
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