India’s coal production grew by 14.65 per cent on a Y-o-Y basis to hit an all-time high of 892.21 million tonnes (mt) on a provisional basis in the last financial year aided by Coal India’s (CIL) record production as well as captive and commercial mines.
The world’s second-largest consumer of coal produced 778.19 mt of the key commodity in FY22 and 716.08 mt in FY21. Furthermore, the off-take of the dry fuel was also at a record 876.72 mt in FY23. However, the pan-India production was below the FY23 target of 911 mt.
“This is a historic moment for the coal sector. I congratulate all the coal warriors and stakeholders for the record growth. Despite the stiff targets, Coal India, SCCL, along with captive and commercial mines have produced more than 892 mt of coal in FY23. CIL has done a tremendous job by surpassing 700 mt this year,” Coal Minister Pralhad Joshi told reporters.
The coal sector’s contribution to the economy’s growth is powering India’s rise under the leadership of Prime Minister Narendra Modi, and the Ministry will continue to meet the nation’s growing energy demand, he added.
CIL’s production rose by almost 13 per cent to 703.20 mt in FY23, while output by captives and commercial mines grew by 34.59 per cent in FY23 to hit 121.88 mt. The production from Singareni Collieries Company (SCCL) rose a modest 3.25 per cent Y-o-Y to 67.14 mt.
Coal demand
The demand for coal increased to 1,027.92 mt in FY22 from 906.13 mt in FY21. For FY23, demand was assessed at 1,087 mt.
Given the expected rise in coal demand due to economic growth, the domestic output is proposed to be increased to 1,017 mt in FY24, which is further likely to increase by 9-10 per cent in FY25. As coal is India’s major source, the demand will continue with a likely peak between 2030-2035.
Rising electricity consumption
The domestic coal requirement by the power sector in FY24 has been accessed at 821 mt. This is due to higher consumption from domestic and industrial consumers. The power demand is expected to grow between 5-7 per cent in the current financial year.
The Central Electricity Agency (CEA) expects India’s energy demand at 142 billion units (BU) in April 2023, the highest for 2023, before tapering to 141.20 BU in May and 117 BU in November.
The Power Ministry has projected a peak demand of 212 gigawatts (GW) in March 2023. During FY24, peak demand is expected at 230 GW in the summer months (April-June).