Fast depleting coal reserves in India could push up energy prices

The fast depletion of coal, a strategic resource and India’s fuel of choice currently, has huge implications for energy costs.

As much as 64 per cent of coal is used for power generation, while the rest is used for other purposes. A TERI (The Energy & Resources Institute) document of 2013 said India does not have adequate extractable coal reserves to meet the current incremental demand or to make long-term supply commitments.

The fact is that between 1980 and 2005, only India and Australia have revised the coal estimate figures upwards against a global trend in which coal resource assessments have been downgraded by overall 50 per cent. Many countries have not reassessed reserves for a long time, and if at all, most have downgraded them, contrary to what was expected.

India has reported total coal resources at 315 billion tonnes as on April 1, 2017. Australian hard coal reserves have been upgraded from 29 billion tonnes in 1987 to 38.6 billion tonnes in 2005.

Mining coal below 300 metres is generally not economically viable with current technology options. Coal resources in India within a 300-metre depth are assessed at 196 billion tonnes. Of this, 154 billion tonnes are of poor quality, and is economically expensive. What this leaves India with is merely 42 billion tonnes.

A large portion of the measured resources of 42 billion tonnes is in the forest, in tribal areas or under water bodies or other protected regions, which may be excluded from the reserves assessed.

Several leading banks have decided to stop financing coal-based plants, including mining, fearing that such assets would become stranded in a few years. Also, renewables have attained grid parity with coal. Soon renewable energy with storage would follow suit, which could ultimately eat into the revenue of utilities.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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