July 2006 ECOAL 3

COUNTRY PROFILE
Map of Coal Reserves in India (billion tonnes)

A FOCUS ON INDIA
>> The choice of India for the location of the WCI/IEA workshop
was an important one – along with China, India is increasingly
influential in global energy markets.>>
ARUNACHAL
PRADESH

0.8

I
ndia is also active in international in total primary energy supply will reach UTTAR 0.3 ASSAM NAGALAND
energy and environmental discussions, only 9% in 2030 compared to 4% in PRADESH
MEGHALAYA
such as through its involvement in the 2002. A small number of new nuclear 35.4
Asia Pacific Partnership on Clean plants will be built, leading to a tripled 7.5 JHARKHAND
MADHYA PRADESH
Development & Climate (AP6), FutureGen, increase in the nuclear share. 11.4
W. BENGAL
the Carbon Sequestration Leadership Hydropower will increase strongly up to 9.4
CHHATTISGARH
Forum and as a signatory to the Kyoto 2020 but its growth is expected to then ORISSA 15.1
4.7
Protocol (see CDM report on page 5). slow as most good sites are exhausted. MAHARASHTRA

Key Energy Facts Electricity Generation 8.3

India is a major producer and consumer
of energy:
• it is the world’s eleventh largest
energy producer, accounting for about
2.4% of the world’s total annual
energy production;
• the sixth largest energy consumer,
accounting for about 3.7% of the
world’s total annual energy
consumption;
• primary energy demand has grown
over the last thirty years at an average
of rate of 3.6% a year.
Coal is the dominant commercial
fuel, meeting half of commercial primary
energy demand and a third of total
energy needs. According to IEA
projections, coal will remain the
dominant fuel in India’s energy mix
through to 2030. Demand is projected to
grow from 391 Mt in 2002 to 758 Mt in
2030. Only China’s demand for coal is
expected to outstrip India’s. The power
sector will be the main driver of India’s
coal consumption – currently around
68% of India’s electricity is generated
from coal, although this share is
expected to decline slightly to 64%
by 2030.
The IEA projects that biomass and
waste, the main fuels in the primary
energy mix in 2002 (includes non-
commercial sources of energy), will
increasingly be displaced by coal and oil.
Natural gas use is set to increase rapidly
but from a low base, therefore its share
India is the sixth largest electricity
generating country in the world and
accounts for about 4% of global annual
electricity generation. India is also
ranked as the sixth largest electricity
consumer worldwide. Annual electricity
generation and consumption have
increased by about 64% in the past
decade and the projected rate of
increase in electricity consumption -
estimated at as much as 8-10%
annually through to 2020 - is one of the
highest in the world.
Coal Reserves
Coal reserves in India are plentiful but
low quality. India has 10% of the world’s
coal, at over 92 billion tonnes, third only
to the USA and China in total reserves.
At current rates of production, India has
enough coal for the next 217 years.
Most of India’s coal reserves are
relatively high ash bituminous coal and
are located in Jharkhand, Orissa and
West Bengal (see map). Less than 5% of
India’s coal reserves are coking coal,
needed for the steel industry. As a result,
India imports coking coal to meet about
25% of its annual needs.
Coal Production & Consumption
Indian coal production reached 375 Mt in
2005 (see table). Almost all of India’s
565 mines are operated by Coal India
and its subsidiaries, which account for
about 86% of the country’s coal
production. Current policy allows private
ANDHRA
PRADESH
Smaller amounts of coal
are also located in
Arunachal Pradesh (31 million tonnes),
Meghalaya (117 million tonnes)
and Nagaland (4 million tonnes)
Sources: Ministry of Coal, India; Foreign and
Commonwealth Office, UK Line of Control
mines only if they are ‘captive’
operations, i.e. they feed a power plant
or factory. Most of the coal production in
India comes from opencast mining,
contributing over 83% of the total
production. Coal India employs around
460,000 people and is one of the largest
five companies in India.
Energy Poverty
Some 595 million people in India – 60%
of the Indian population – depend on
traditional biomass for cooking and
heating. The electricity industry faces
enormous challenges in providing a
reliable service and meeting rising
demand. The investment cost in meeting
the projected increase in generating
capacity, transmission and distribution is
estimated by the IEA at around $680
billion from now to 2030. Without the
introduction of major new government
initiatives, the IEA believes India is
unlikely to achieve its target of full
electrification by 2012.

Coal Production & Consumption in India, 1996-2005 (in million tonnes)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Production 268 283 294 290 296 307 320 333 353 375
Bituminous 248 263 273 269 276 285 297 310 328 347
Lignite 20 21 20 21 20 22 23 24 25 22
Consumption 301 325 329 341 368 375 391 391 NAV NAV

Source: CSLF website, original source Government of India NAV = not available
4 ECOAL July 2006

Continued from page 3

International countries involved in the newly Electricity Generation (TWh) - Fuel Mix
Activities formed AP6, as well as being a signatory 2500
In April this year, of the Kyoto Protocol.
Coal Oil Gas Nuclear Hydro Biomass & waste Other renewables
India became the
2000
first country to Challenges Facing Coal in India
join the USA on the The Indian energy sector faces a number
government steering of challenges. 1500
committee for the • Lack of investment in mining - in spite
FutureGen Project. FutureGen is an of the economic liberalisation of 1991 1000
initiative to build and operate the the mining sector has not seen major
world’s first coal-based power plant that investments.
removes and stores CO2 while producing • India has not been able to develop a 500

electricity. The signing of the agreement comprehensive solution to deal with

followed President Bush’s trip to India at the high levels of fly ash generated at 0
1971 2002 2010 2020 2030
the beginning of March. India will coal power stations through the use of
contribute $10 million to the Indian coals.
FutureGen Initiative and Indian • Lowering energy intensity of GDP
companies are also expected to growth through higher energy
Electricity Access
participate in the private sector efficiency is key to meeting India’s Electrification rate: 44.4%
segment. energy challenge, ensuring its
Population without electricity (million) 582.6
India is a member of the Carbon energy security and tackling
Sequestration Leadership Forum (CSLF), CO2 emissions. Population with electricity (million) 465.9
an international initiative to assist in the • Unreliability of electricity supplies is
development of improved cost-effective severe enough to constitute a Sources: IEA 2004 & 2005, CSLF website (www.cslforum.org),
technologies for carbon dioxide capture constraint on the country’s overall BP 2006, EIA, Journal of Mines, Metals & Fuels 2005, Coal India &
and storage. India is also one of the six economic development. www.indiacore.com

CLEAN COAL TECHNOLOGIES IN INDIA

India has a large construction of a demonstration plant at limiting greenhouse gas emissions through
number of existing Aurya in Uttar Pradesh. enhancing the thermal efficiency of coal-
coal-fired power The next step is putting together the fired power generation by using advanced
generation plants necessary finance for the Aurya plant, clean coal technologies. In the longer term,
and there is continuing rapid installation of which would be engineered and when more efficient plants have been
new units. Most have been and are being constructed by BHEL and owned by NTPC established, carbon dioxide capture and
constructed by Bharat Heavy Electricals (National Thermal Power Corporation). storage is seen as a possible strategy to
Limited (BHEL). The table shows recent Commissioning would be at the end of adopt together with novel plant designs.
500 MWe units and those contracted/ 2008. There are plans to follow the This is illustrated by India’s membership of
under construction. These use 17.9 demonstration with the construction of a the Carbon Sequestration Leadership
MPa/540ºC main steam conditions. All commercial scale (400 MWe) plant in 2012. Forum and participation in FutureGen.
currently operating plant use subcritical Activities such as these demonstrate
steam conditions but a move to the commitment in India to concentrate in Information supplied by IEA Clean Coal
supercritical conditions is beginning in the short to medium term on a policy of Centre: www.iea-coal.co.uk
order to raise efficiency. A supercritical
station at Seepat (3x 660 MWe) is being
manufactured by suppliers from Korea and Recent & Contracted 500 MWe Units in India
Russia and is due to be completed early in
2009. There are also plans for a further 20
GWe of supercritical capacity, and BHEL Generating company Site Synchronising date
has associated with Alstom in order to bid NTPC Vindhyachal Unit 8 02/00
for these future supercritical NTPC Simhadri Units 1 & 2 02/02 & 08/02
660/800/1000 MWe coal fired units.
NTPC Talcher Units 3, 4, 5 01/03, 10/03, 05/04
Integrated Gasification Combined NTPC Rihand Units 3 & 4 01/05 & 09/05
Cycle Developments NTPC Ramagundam Unit 7 08/04
As one route to raising the efficiency of
power generation for Indian coals, BHEL NTPC Talcher Unit 6
is developing an air blown pressurised MPEB Birsinghpur Unit 5
fluidised bed gasification based IGCC NTPC Vindhyachal Units 9 & 10
system. Last year, the process reached
an important milestone with the NTPC Kahalgaon Units 5, 6 & 7
achievement of a successful KPCL Bellary
uninterrupted run in the 6.2 MWe facility NTPC Sipat Units 4 & 5
at Tiruchirapalli in Tamil Nadu using
Singareni coal containing over 40% ash. APGENCO Vijayawada Unit 7
Over 100 tonnes of coal were processed APGENCO Bhoopalpally Unit 1
in the facility. Total test run time under NTPC Korba Unit 7
pressure now exceeds 4000 hours.
There are plans for scaling up the
process to 100-125 MWe, with the Source: BHEL, India

CLEAN DEVELOPMENT MECHANISM IN INDIA
In this short report,
Pamposh Bhat,
Head of GTZ CDM-
India, reviews the
power industry in
India and opportunities for the Clean
Development Mechanism.
The Clean Development Mechanism
(CDM) is a project based mechanism
established under the Kyoto Protocol to
the United Nations Framework
Convention on Climate Change
(UNFCCC). It has two main objectives:
1. assisting countries not included in
Annex I to the UNFCCC (‘developing
countries’) in achieving sustainable
development; and
2. allowing countries that are included in
Annex I to the UNFCCC and have
specific GHG emissions targets in
Annex B to the Kyoto Protocol (the
traditional industrialised countries) to
acquire Certified Emission
Reductions (CERs) from CDM Project
activities undertaken in non-Annex I
Parties and count them towards their
Kyoto targets.
Kyoto Ratification
India ratified the Kyoto Protocol in
August 2002, prior to the eighth
Conference of the Parties (COP8) to the
UNFCCC held in New Delhi in October-
November 2002. The Indian government
subsequently approved the
establishment of the National Clean
Development Mechanism Authority
(NCDMA) in December 2003. India has
since given host country approval to
over 297 projects. The CDM Executive
board (EB) has to date registered 71
Indian Projects.
Procedures underlying the CDM have
evolved slowly and steadily but there are
ENERGY STATISTICS
QUANTIFYING ENERGY
>> BP launched the 2006 edition of its "Statistical Review of
World Energy" in June.>>
Q
uantifying Energy provides
statistical information on
energy market developments in
2005. World primary energy consumption
increased by 2.7% in 2005. This was
below the strong growth in 2004, at
4.4%, but still above the 10-year
average. China accounted for more than
half of global energy consumption
growth. The largest consumption
slowdown was in oil - to 1.3%
an increasing number of voices in the
international climate policy arena that are
calling for improvements to the way the
mechanism functions. Concerns have been
expressed that projects that are likely to
enhance host countries sustainable
development - such as renewable energy,
energy efficiency and transport - are not
competitive in the CDM market and are
becoming marginalised.
India – Power Shortages
The total installed capacity in India,
including captive power plants, increased
to 137,552 MW in 2005 compared to
131,424 MW in 2004. However, India is
still facing a power shortage in terms of
overall and peak demand - the electricity
shortage is 8% while peak capacity
shortage is about 12%. The Indian
government has announced plans to end
shortages by 2011-12, with plans to
provide power to all by this time. This
would require 68,500 MW of base
capacity additions by 2012.
Coal-fired power plants contribute
the majority of electricity in India and
will continue to be a major source of
electricity generation into the future.
Improving the efficiency of coal-fired
power plants will be essential in helping
to meet some of the demand. The
introduction of supercritical technology
will also be important, with the addition
of 36,800 MW supercritical units to be
commissioned during the 11th
(2007-2011) and 12th (2012-2016)
five year plans.
CDM in India
All of these new projects can benefit
from GTZ CDM-India, a capacity building
project under the Indo-German Energy
Programme (IGEN) which is developing
methodology for renovation and
Coal
Coal is the world’s fastest growing fuel -
this was the case in 2005, in 2004 and for
the last decade, from 1995. This is only
true, however, as a result of China. In 2005
China alone represented 76.8% of the
growth in world coal consumption. Chinese
coal growth represented 38.8% of the
growth in total energy consumption
worldwide in 2005. Outside of China, coal
consumption grew by 1.8% in 2005.
July 2006 ECOAL 5
modernisation schemes (R&M) and for
supercritical power plants in India. These
would be groundbreaking methodologies
if they are approved by the CDM
Executive Board and would benefit
future projects in India.
The national baseline for carbon
burning in the Indian power sector has
been jointly prepared by IGEN and the
Central Electricity Authority (CEA) and a
first edition is due to be published in
September 2006. This will enable Project
Design Document (PDD) developers,
validators and project owners to base
CERs on well-researched and officially
sanctioned performance data in the
power sector. CEA will periodically
update the database.
A supercritical coal-fired power
project can generate substantial amounts
of CERs. As an initial estimate, each
project is expected to generate annual
CER revenue of US$4.5 million (annual
emission reductions of 750,000 tCO2 at a
conservative CER price of US$6).
Importantly, it has a good chance of
passing the ‘additionality’ test and being
registered as a CDM project because it is
likely that the technology will be
considered as ‘first of its kind’ in India.
The Indian government has introduced
a new tariff policy which assists CDM
projects. The policy also encourages
Public Sector Units (PSU) to develop
CDM projects and directs Central
Electricity Regulatory Authorities and
State Electricity Regulatory Authorities
to set tariffs taking the CDM benefits
into consideration.
See Ecoal Volume 52 for further
information on the Clean Development
Mechanism or visit http://cdm.unfccc.int
www.cdmindia.com &
www.envfor.nic.in/cdm
Other Trends
• Energy prices – in both 2005 and so far
in 2006 there were sharp rises in energy
prices, especially the price of oil.
• Fuel switching – away from higher
cost energy into lower cost sources.
Gas faced competition from cheaper
coal, particularly in liberalised
markets.
• Weather – energy markets in 2005
were particularly affected by the
weather.
• Geopolitical situation – particularly in
oil producing countries, has been
perceived to have deteriorated. Energy
security has risen up the agenda in
almost every country.
A copy of the BP Statistical Review of
World Energy can be downloaded on the
BP website: www.bp.com