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producers (IPPs) account for 75 GW. Different public joint ventures in which NTPC is present account for 5 GW. Additionally, there are captive power plants with a total capacity of 54 GW, which produce electricity for own use in certain industries (steel, aluminium, cement and fertilisers).

India has 50 GW of capacity under construction, with 50% being supercritical, while among installed capacity less than one-third is supercritical. India’s subcritical coal-fired fleet is relatively young at 15 years old on average.

Coal power generation has grown at an astonishing rate of 8% per year during the past decade, surpassing the robust growth of 6.5% in power demand, which was strongly driven by the Electricity Sector Reform of 2003. In 2017 the share of coal in power generation reached a historic peak of 73%, while average plant load factors have been below their technical capacity for several years, leaving a large part of the fleet underutilised (see also Chapter 7 on electricity). Besides operational issues, a low plant load factor has economic implications for the recovery of investment costs. Around 55 GW of coal power plants in India are under severe financial stress, including many state-owned plants, for which tariff revenues very often do not cover generation costs. Private plants are struggling to conclude power purchase agreements (PPAs) and fuel supply agreements (FSAs). These non-performing assets in the power system have become a problem for the financial sector, as many of them have not repaid their loans.

India’s Central Electricity Authority (CEA) monitors stocks at 114 coal power plants, and classifies them as critical if they are less than seven days of consumption for non-pithead plants or five days for pithead plants. Supercritical means that stocks are less than four days of consumption for non-pithead plants or three days for pitheads plants. CEA announced in March 2019 that for the first time since 2014 no plants are facing critical or supercritical stock levels.

Institutional framework

The public sector

The Ministry of Coal (MoC) is central to the performance of the coal industry. It has overall responsibility for determining policies and strategies in respect of the exploration and development of coal and lignite reserves to secure their availability to meet the country’s demand. This includes sanctioning important projects of high value and the clearance of all related issues. Jointly with the Ministry of Environment, Forestry and Climate Change (MoEFCC), a key mission of the MoC is to ensure that the development of the coal sector takes place in an environmentally friendly and sustainable manner.

The Coal Controller’s Organisation, a subordinate office of the MoC, ensures: a) proper coal sampling and maintenance of grades produced by the collieries; b) collection of certain duties levied on coal dispatched; and c) collection and production of coal and lignite statistics, and other coal-related tasks. The Ministry of Railways plays a critical role in ensuring rail capacity and setting the price for the transport of coal. State-owned Indian Railways transports the majority of coal. The Geological Survey of India carries out fundamental research, jointly with other public bodies, such as the States’ Directorates of Geology and Mining. Detailed exploration is done by the Central Mine Planning and Design Institute, a subsidiary of CIL, either directly or through private

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9. COAL

entities, together with States’ Directorates of Geology and Mining. Some companies conduct exploration themselves in their command areas.

The role of the government in India’s coal sector is underpinned by the presence of stateowned companies along the value chain. Coal production is dominated by state-owned mining companies, responsible for 82% (600 Mt) of the country’s coal output in 2017, mostly CIL and others. The largest coal consumer is NTPC. Bharat Heavy Electricals Limited (BHEL) is the largest manufacturer of coal boilers in India.

CIL is a public company. The GoI holds 70.96% of CIL’s shares, while the remainder is held by the public. CIL accounts for 80% of total coal production in India and is central to the GoI’s strategy to increase coal production for economic growth, adequate electricity supply and revenues for the budget through dividends. CIL has around 300 000 employees. In 2017 it had 394 mines, of which 193 were underground mines, 177 were opencast mines and 24 were mixed mines. Given its higher capacity and productivity, opencast production accounts for 95% of CIL output. CIL produced 567 Mt in 2017, which it sells mostly under long-term contracts but also through some internet auctions. A total of 120 mining projects with a production capacity of over 500 Mt per year are under development. CIL is the largest producer in the world by tonnes of coal produced.

Singareni Collieries Company Limited is a public company with operations that date back to the time before the nationalisation of the coal industry in the 1970s. It preserved its status after CIL was established and is owned by the government of Telangana (51%) and the GoI (49%). The company operates in Telangana state, producing 62 Mt of coal and giving jobs to over 50 000 employees.

NLC India Limited, formerly Neyveli Lignite Company, is a state-owned company with almost 10 000 employees. In 2017 it produced 27.6 Mt of lignite and also owns the adjacent power plants generating 22.3 TWh (2017) of electricity. Its expanding business plans aim to develop the company from a pure lignite player to an investor in both hard coal and lignite, as well as power generation. In order to achieve this, NLC and CIL have signed a joint venture to build both solar and coal power generation capacity.

Several other public companies produce hard coal. NTPC, a state-owned company with the Maharatna status, has recently become a coal producer in addition to being the largest utility in India. As part of the GoI’s effort to ramp up domestic production to guarantee adequate supply and reduce imports, NTPC has received 10 coal blocks with geological reserves of over 7.3 Gt. In 2018 NTPC produced 7.3 Mt of coal (jumping from only 2.7 Mt in 2017) from its operations in the Pakri Barwadih mine in Jharkhand (6.8 Mt) and the Dulanga mine in Odisha (0.5 Mt). NTPC plans to continue expansion in the coming years.

Rajasthan Vidyut Utpadan Nigam Ltd (RVUNL), owned by the government of Rajasthan, produces from its captive mines around 7 Mt per year to partially feed its thermal power capacity of over 6 GW. India’s large iron and steel producers also produce coal from their captive mines, such as Steel Authority of India Limited and its subsidiary the Indian Iron and Steel Company, the Damodar Valley Corporation, Jharkhand State Minerals Development Corporation Limited and J&K Minerals Limited. Among the small lignite producers, several states own power generation with captive mines in Gujarat, Rajasthan and West Bengal.

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