With inflation at unprecedented levels in many countries, concerns over energy security have gained centre stage.
Needs to increase domestic coal production
- High prices of coal and coal-based generation will only encourage imported coal and expose the country to price risks from international energy prices.
- The domestic coal industry has responded to increasing international prices with an increase of over 30 per cent in coal production from April to June this year.
- Anticipating these problems, a big effort toward permitting commercial mining has been made to get the private sector to produce more coal.
- Gradual transition: Looking at coal from a singular focus on GHG emissions will give a myopic view of energy requirements for a growing economy like India.
- The path to achieving 500 GW of renewables needs to be gradual, ensuring an orderly transition as coal is unavoidable in the near future.
- Reducing coal imports and increasing domestic production of coal needs focused attention
Suggestions to increase domestic production of coal:
- The draft National Electricity Policy released in May 2021, recognised the need to increase coal-based generation.
- Holistic approach in ESG criteria: Apart from the government, the industry should also take up this issue with the financial community in adopting a more holistic approach toward environmental, social, and governance (ESG) criteria.
- There is the need for a regulator to address the issues arising from a greater role of the private sector.
- Single point of contact: A single point of contact for the industry in the form of a dedicated regulator would give great comfort to private players and would help to overcome problems that could arise in due course.
- The undue financial burden on the coal sector due to various cross subsidies needs attention. The regime needs to be reformed.
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