India's Coal Production to Reach 1 Billion Tons by 2019

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Researched by Industrial Info Resources India (Delhi, India)--The Government of India has set an ambitious goal of achieving 1 billion tons of coal production in the next five years, doubling the current output of 500 million tons (MT), to ensure adequate coal supply to the thermal power plants in the country. State-run miner Coal India Limited (CIL) (BSE: 533278) (Kolkata) is looking to double its production to reach this target.

Coal production in India has grown to barely 1-1.5% in the last four years, while last year it has recorded a growth of over 6%. In the past five years from 2009, the previous government had expanded coal-based power generation capacity by 79%, from 81 gigawatts (GW) to 145 GW, while during the same period coal production had increased by only 7.6%, from 525 million tons per annum (MTPA) to 565 MTPA. Presently, out of the total domestic coal production of 565 MTPA, CIL has a share of around 500 MTPA.

Large parts of India are in the grips of long power-cuts, especially in the north and west, as several power plants have little coal left. During last week, 35 thermal power plants in the country have coal stocks for less than four days and around 61 plants have stocks for less than a week. India has 53 million homes that do not have access to electricity, and many businesses depend on generator sets. The government has set a goal to provide power for all businesses and homes across the country by 2019.

According India's Minister of State for Power, Coal, New and Renewable Energy, Piyush Goyal, this increase in demand from 53 million homes and businesses put together, along with growing industrialization, will double the requirement of power in the next five years. To meet this steep increase in demand, the power ministry has adopted a multi-pronged approach of utilizing the existing assets, sort fuel supply problems and improve the electricity mix by adding alternate energy sources.

The ministry has also started discussion on setting up an integrated power grid project for enhancing energy cooperation and inter-connectivity between the eight nations comprising the South Asian Association for Regional Cooperation (SAARC). The agreement, which will facilitate development of a SAARC Market of Electricity (SAME), now awaits ratification by the respective governments.

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