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How can India’s hunger for energy be satisfied, while balancing the demands of price, environment, and infrastructure?

Published September 2017 by Harry Riley-Gould, Senior Conference Producer, Coaltrans Conferences

 

Harry Riley-Gould from Coaltrans Conferences is the Coaltrans blogger for the September 2017 edition

Every year in August, the Coaltrans team visit India to research market trends for our annual Coaltrans India conference.

 

The conference is the largest gathering for the Indian coal industry, and so naturally we met with a number of key industry stakeholders during our hectic but valuable trips through Mumbai, Kolkata and Delhi.

 

Indian energy architecture is at a vital crossroads. The country has the world’s third largest demand for energy, as well as a rapidly expanding population (expected to exceed that of China’s by 2022). But India is also home to the world’s largest population without access to electricity, estimated at roughly 240 million.

 

So the question is: How can India’s hunger for energy be satisfied, while balancing the demands of price, environment, and infrastructure?


Market sentiment

 

In recent years, the Indian government under Narendra Modi has committed to eliminating India’s coal import basket. This has mainly been attempted through ramping up production from India’s state mining company Coal India Limited, the largest coal miner in the world. Progress has been good so far, with 2016 seeing total imports drop by 5% alone.

 

Nevertheless, industry sentiment on the ground was positive. While large strides have been made towards shrinking India’s import basket, there was a broad recognition of the important role that the seaborne market would continue to play in meeting India’s energy needs.

 

We heard frequently of the recent NITI-Aayog report, which argued for coal to remain the backbone of Indian energy into the 2040s, and many pointed to the need for high CV and metallurgical coal (which cannot be sourced in India) as being the basis of the import structure moving forward.


Key issues

 

The main issues that stakeholders were concerned about were infrastructure – both at ports and for inland coal evacuation via rail and waterway – and better understanding the future of the Indian energy basket. The future dynamics of coal and solar power were a critical concern in particular.

 

One key positive was that following the shocks of the recent demonetisation programme and the move to a universal Goods & Services Tax system, optimism in economic performance was strong. The steel and construction sectors in particular were highlighted as being strong, and while power demand remained muted, nearly everybody we spoke to had a lot of confidence in the underlying strength of the Indian economy.

 

 

 

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