- The statement comes in the backdrop of several global financing institutions announcing their plans to shift away from coal and other fossil fuels
- Solar energy, unless supported by a storage system, cannot replace coal as a major source of energy, said the Coal India CMD
New Delhi: Pramod Agrawal, the Chairman and Managing Director (CMD) of Asia’s largest coal miner Coal India Ltd (CIL), said on Friday that it has become difficult to get finance in coal sector and coal-based power sector. Speaking virtually at ET Energy Leadership Summit, Agrawal said, “Getting finance has become difficult in these sectors… like coal and energy based on coal. But as far as Coal India is concerned, we are a zero-debt company, and hence, for us, financing has never been a problem.”
Global finance shifting away from coal, other fossil fuels
The Coal India CMD’s statement assumes significance as it comes in the backdrop of several global financing institutions announcing their plans to shift away from coal and other fossil fuels. In a recent report, the Institute for Energy Economics and Financial Analysis (IEEFA) said, “In the last year, banks and financial institutions with large funding portfolios in fossil fuel assets, such as BlackRock, JP Morgan Chase, Korea Development Bank and Japan Bank for International Cooperation, have announced coal exit policies. Recently, oil and gas giants Shell and Exxon experienced huge setbacks in court and from investors over their inaction on climate policies. A Dutch court ordered Shell to halve emissions and Exxon lost two board seats to activist investors.”
At a time when global capital is shifting away from coal, India is moving rapidly towards commercial auction of coal mines, with the government showing eagerness to open the sector up for private participation, promising good returns.
Trends in coal mining sector
Commenting on the trends in the coal sector, CIL CMD said, “Technology-wise, large machines are being introduced in coal mining. Dumpers of the size of 250 T are being used, shovels of the size of 42 cubic metres are being used. These are large and costly machines. But at the same time, they ensure that production very fast and with minimum disruption. For example, if one dumper is being used instead of three, it saved ecological damage.”
He also added that digitalisation is on the rise as most of the mines are getting mechanised and operations are being controlled digitally. “Most of the mines are getting mechanised. Most of the mines’ operations are getting digitalised so that efficiency of machines improve. Coal India has also engaged Accenture to undertake digitalisation of its processes,” said Agrawal. In addition, he said, private participation is on the rise in the sector as the government auctions coal mines and Coal India, too, has introduced the concept of MDO to bring in private participation.
‘Solar energy, unless backed by storage, will not replace coal’
On being asked about the position of coal in the energy basket, Agrawal said that coal will continue to remain relevant for at least three decades as 53 percent of the commercial energy consumed in India comes from coal and over 70 percent of the power produced in India is coal-based. “Solar energy, unless supported by a storage system, cannot replace coal as a major source of energy,” he said.
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