India’s coal demand is set to jump to 1.6 billion tons in 2030, from about 1.2 billion tons now, due to higher electricity generation and industrial activity, Indian Coal Secretary Vikram Dev Dutt said on Friday.
India, which is the world’s second-biggest coal consumer behind China, plans to create a coal trade exchange and raise in its domestic coal supply to boost market transparency and energy security, respectively.
A local coal exchange will create a transparent marketplace for buyers and sellers and could later lead to the establishment of a market for coal derivatives in India, the secretary said at a commodity industry event in Mumbai.
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“Coal demand is projected to rise further to an estimated 1.6 billion tonnes by 2030, and under this situation, where the country has moved from a scarcity scenario to a surplus scenario, a shift that underscores the need for more efficient, transparent and market-driven mechanisms for coal trade,” Dutt said, as quoted by Indian media.
Last year, India’s Coal Ministry proposed to establish a coal trading exchange as domestic coal production jumps with the government push for higher output and sector reforms allowing private firms to operate mines.
Overall coal-fired power generation and capacity installations in India continue to rise, and coal remains a key pillar of India’s electricity mix with about 60% share of total power output.
Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.
Coal will still be a key part of India’s power system for the next two decades, Rajnath Ram, adviser for energy at the government policy think tank, NITI Aayog, said at the end of last year.
“We cannot be subjective about coal. The question is how sustainably we can use it,” the official noted.
By Charles Kennedy for Oilprice.com
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