Way Forward to Meet Demand of Coal
Clearances and Land Acquisition for Coal Blocks
Sanjeev Aggarwal
Amplus Infrastructure Developers Private Limited
India’s peak power demand in 2017 is expected to be ~199GW
Projected Power demand and Installed capacity requirement
300
266
249
250
233
217
202
200
186
174
174
GW
162
150
96
91
102
162
151
141
130
121
100
199
189
109
117
126
145
135
50
0
2010
2011
2012
2013
Base Demand
Peak Demand
2014
2015
Installed Capacity Requirement
2016
2017
…and Installed Capacity requirement to ~266 GW by 2017
Source: CEA, 17th EPS, IEP, Planning Commission, KPMG Analysis
2
2
Of this, ~83 GW is expected to come from Thermal power plants
and Coal is likely to be the dominant fuel source
Capacity addition by fuel type
Capacity of Coal based power plants
• Maximum addition is likely to be in Thermal power plants (~83 GW)
• 70 GW capacity of Coal based power plants to be
added by 2017
• Coal is the dominant source of Fuel (~70 GW)
35
Coal
Gas
Diesel
Nuclear
Hydro
RES
Lignite
30
160
25
137
140
20
117
GW
120
100
GW
15
10
146
147
2016
2017
124
99
77
79
85
2009
2010
2011
80
60
40
5
20
0
0
2010
2011
2012
2013
2014
2015
2016
2017
2012
2013
2014
2015
Imported,
16 GW,
22%
Linkage,
41 GW,
59%
Captive,
13 GW,
19%
• Most of the
planned coal
plants use
domestic
source
(Linkage or
Captive); 22%
of the capacity
addition is
based on
Imported coal
GW
Coal power plants by source of Coal
20
18
16
14
12
10
8
6
4
2
0
Linkage
2010
2011
Captive
2012
2013
Imported
2014
2015
2016
2017
Source: CEA, Infraline, MoP, KPMG Analysis
3
3
The significant linkage between power and coal

Coal to remain as the mainstay of Indian power capacity addition

Given the price difference between Indian and imported coal, huge demand
for Indian coal

Coal India falling majorly short of meeting the demand and pressure
mounting on the coal companies to increase supply (by reducing e-auction,
pit-head stocks, etc.)

Why is that coal companies are unable to meet the demands of its
customers?
The significant linkage between power and coal

Development of the coal blocks has become a challenge both for the
economy as well as for the industry.

Though available in plenty below the ground, is not available to meet the
requirements of the growing economy leading to tremendous loss.

The issues that have really pushed back the efforts are land acquisition
and various clearances. And the issue is common for Coal India and the
captive mining companies.
Land Acquisition

Even after award of the mining license, the land acquisition process
remains a big challenge


Revenue land (non-forest)

Private land

Forest land
Issues range from private land prices, rehabilitation, rights of forest
dwellers and so on…

The government need to enforce its Eminent Domain right at least for the
land that holds natural resource and complete the acquisition process in a
timely manner
Environment and Forest Clearance

Recent issue of forest clearances: Category A / B is the biggest bugbear for
most of the coal mine owners:

Huge investments incurred / planned based on government allocation of coal
mine.

Discussion at the top levels in the GoI over last 2 ½ Years; still uncertain on what
can be cleared

Now, we believe that GoM has finally decided to do away with the Go/ No-Go
policy

Any change of policy retrospectively or uncertainty in the same is the single
largest measure that impacts investments in a growth economy.

Latest policy of MoEF to not grant environmental clearance till the
forest clearance is obtained will further add on to the timelines
7
How can we do it better?

Forest clearances: With the curtain drawing on the Go/ No-Go issue, we
expect hat the forest clearance will be much more timely and systematic

Avoid linking of environmental clearance with forest clearance

The new land acquisition bills/ rules can provide for compulsory land
acquisition for areas bearing natural resources

Provide PL immediately to all pending applicants along with the permission
to prospect in forest areas – prospecting need not involve any forest loss.
Increasing the production for the future..

Coal Block allocation through competitive bidding is the next step:

Avoid the issues of environment and forest clearance by pre-screening the
blocks

Increase coal production through involvement of real mining companies and
avoid squatters that may hold on the resource

Avoid speculation by providing as much data as possible

Up-front premium just increase the speculation premium rather than bringing in
real efficiencies

The long expected coal regulatory system can take care of the concerns
about excessive profiteering by the mining companies

Result: The coal will be available in plenty, to all the needy, and at the
right cost.
Thank you