India grapples with coal shortfalls

Oct. 31, 2011 at 4:06 PM
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NEW DELHI, Oct. 31 (UPI) -- Amid a growing population and robust economy, India is finding it increasingly difficult to boost its coal supply.

Although the government aims to double power generation over the next decade, India faces a shortage of about 100 million tons of coal in the next year, The Australian newspaper reports. That's equal to more than half its power generation capacity.

As a result of the shortages, dozens of power plants under construction will be halted. Coal accounts for about 70 percent of total energy consumption in India.

While India has the world's largest coal resources after the United States and China, many of its coal fields are situated in heavily forested area and face environmental constraints and delays in obtaining licenses.

Aside from domestic supplies being inadequate, the consistency of Indian coal is not always up to par for the country's needs.

"The quality of thermal coal in India is of very low calorific value with high ash content compared to imported coal, which has comparably higher heating values and, when burned, increases power station boilers' efficiency," said Michael Cooper, associate editor of Platts International Coal Report.

India's coal imports, which totaled 55 million tons in 2010, are expected to soar to 186 million tons by 2014 and could rise to about 300 million tons by 2016.

Goldman Sachs India Chairman Sonjoy Chatterjee forecasts a rush of Indian investment in Australian energy assets, especially coal mines. "There is no other country which is as attractive to India right now as Australia is," Chatterjee said, The Australian newspaper reports.

"We have several top-tier Indian corporates looking actively at Australia. And each one of them has clear gaps in their resource requirements."

Just in the past year, Indian companies have invested about $2.5 billion in Australian coal assets.

The chairman of the India Energy Forum coal group, N.N. Gautam, said coal acquisitions would continue because India cannot continue to rely on just buying from global markets with too many uncontrollable factors. "Global coal availability might not come to our rescue. India will have to acquire coal mines outside India,'' he said, the Sydney Morning Herald reports.

Meanwhile, the International Energy Agency says 404 million Indians have no access to electricity. The government aims to add 100,000 megawatts of electricity between 2012 and 2117, nearly double its current capacity.

And with rolling blackouts and power shedding, 40 percent of Indians get electricity for less than 12 hours a day.

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