Wagons loaded with coal are heading towards the Kamarajar port in Ennore, near Chennai. File | Photo credit: The Hindu
History so far: A recent report by the Organized Crime and Corruption Reporting Project, an effort backed by billionaire hedge fund manager and philanthropist George Soros, provided up-to-date documents confirming that in 2014 the Adani Group claimed that “low quality” coal imported from Indonesia to be “high quality” coal, inflated its value and sold it to the energy company TANGEDCO (Tamil Nadu Generation and Distribution Company).
What is ‘high’ and ‘low quality’ coal?
High and low quality are relative terms and only matter in the context of where the coal is used and how it is processed. Gross calorific value (GCV), the amount of heat or energy that can be produced from burning coal, determines the grading of coal. Fossil fuel coal consists of a mixture of carbon, ash, moisture and many other impurities. The higher the available carbon content in a unit of coal, the higher its quality or “grade”. According to this metric, there are 17 grades of coal from class 1, i.e. the highest quality coal, with a kilogram providing over 7,000 kcal, and the lowest producing from 2,200 to 2,500 kcal, according to the classification of the Ministry of Coal. However, calorific value in itself is not a useful indicator. The most crucial uses of coal are to operate thermal power plants or to power a blast furnace to produce steel, both of which require different types of coal. ‘Coking’ coal is the type of coal needed to produce coke – an necessary ingredient in steel production – so it requires a minimum ash content. Non-coking coal, despite its ash content, can be used to generate enough usable heat to power a boiler and turbine.
What are the characteristics of Indian coal?
Historically, Indian coal was assessed to have high ash content and low calorific value compared to imported coal. The average GCV of domestic steam coal ranges from 3,500-4,000 kcal/kg compared to imported steam coal +6,000 kcal/kg GCV. Also, the average ash content of Indian coal is more than 40% compared to imported coal which has less than 10% ash content. The consequence of this is that high-ash coal produces more particulates, nitrogen and sulfur dioxide when burned. As a result, the government has controlled coal prices since 1954 in a way that discourages energy companies from using high-quality coking coal to generate energy.
Therefore, in a bid to balance India’s needs for coal production, power plants and pollution, the government recommended the apply of imported coal with lower ash and moisture content. The Central Electricity Authority (CEA) in 2012 recommended, and continues to maintain, that Indian power boilers that run on low-grade Indian coal can usually safely apply about 10-15% blend of imported coal.
What is neat coal?
Generally speaking, neat coal is obtained when the carbon content is increased by reducing the ash content. Coal-fired power plants have on-site “cleaning plants” that can process the coal in a way that reduces ash and moisture content. They apply huge blowers or a “bathtub” to remove fine, harsh ash. However, implementing such equipment is pricey and increases energy costs. Another method of coal purification – also requiring significant investments – is coal gasification. In this case, the need to directly burn coal by converting it to gas is bypassed. Based on an integrated gasification combined system (IGCC), steam and pressurized warm air or oxygen combine with coal in a reaction that separates the carbon molecules. The resulting syngas, a mixture of carbon monoxide, hydrogen, CO2 and water vapor, is then purified and burned in a gas turbine to produce electricity. Because IGCC plants produce two forms of energy (steam from the gasification process in addition to syngas as a fuel), they enhance the efficiency of the coal used.
What does the future hold for coal in India?
Official data says that India produced 997 million tonnes of coal in 2023-2024, an enhance of 11% compared to the previous year. Most of them were produced by state-owned Coal India Ltd and its subsidiaries.
As of March 2024, India produced 261 tonnes of coal, of which 58 million tonnes was coking coal. Despite declarations regarding the transition of the Indian electricity sector away from fossil fuels, coal is the basis of the Indian energy economy. Change is in the air, however, as for the first time this year renewable energy accounted for 71.5% of the record 13.6 GW of generating capacity added by India in the first quarter of this year, while the share of coal (including lignite) in the total for the first time since the 1960s, power has dropped below 50%.
