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DAILY NEWS ANALYSIS
08 May, 2022
15 Min Read
How did India get here?
Reason for rising prices and demand-supply gap
War has led to a disruption in the supply of coal by Russia, which is unlikely to be fully replaced by other suppliers.
The price of Australian coal for march delivery had hit a high of about $330 per ton. Australia and Indonesia are key sources of coal import for Indian thermal power generation companies using imported coal.
Power plants are taking more than the prescribed amount of time to unload coal from railway tracks, even the greater delay in power companies unloading coal.
The demand-supply gap is mainly due to an increase in price and low domestic production because of delays in environmental clearance in ecologically sensitive areas, arbitrary allocation of coal blocks, Coal India’s monopoly in the market, regulatory provision of using “washed” coal only and poor plant load factor make existing coal-based thermal plants unable to reach the expected level of supply.
Other issues
Reform in the Coal Sector (Third-Generation reform)
Way forward
If all the reforms are implemented responsibly, then the demand-supply gap can be controlled. The New Reform will increase productivity by bringing modern technology for world-class production. Also, there is a need that the government should revisit the coal grades pricing mechanism from grades based on coal mines to grades based on coal desire for end-user.
Coal in India Coal is the main source of energy in India and it is found in a form of sedimentary rocks and is often known as ‘Black Gold’. It originates from organic matter wood. When large tracts of forests are buried under sediments, wood is burnt and decomposed due to heat from below and pressure from above. The phenomenon makes coal but takes centuries to complete the process Coal can be classified on the basic carbon content:
India is 2nd largest importer, consumer, and producer of coal, and has the world’s 5th-largest reserves. Majorly imports are from Indonesia, Australia, and South Africa Highest Coal reserves: Jharkhand, Odisha, Chhattisgarh Coal accounts for over 70% of India's electricity output, and utilities account for about 75% of India's coal consumption. Geological Survey of India identifies the new coal fields in India. As per the present Import Policy, coal can be freely imported under the Open General License System by the consumer as per their commercial need. |
Source: The Hindu
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