Commercial mining: UN secretary general expresses concern over ongoing coal auctions

The government estimates that the country will need 892 million tonne of the fuel in FY30 — around 40% higher than current levels — for power generation.

After the government recently launched the maiden auction for 40 coal blocks for commercial mining, Antonio Guterres, secretary general of the United Nations, said on Friday that such a “strategy will only lead to further economic contraction and damaging health consequences”. While delivering the 19th Darbari Seth Memorial Lecture organised by Teri, Guterres said, “In India, 50% of coal capacities will be uncompetitive in 2022, reaching 85% by 2025.” He added that “the coal business is going up in smoke”. Expressing his concerns about the “continued support for fossil fuels in so many places around the world”, Guterres said that “we have seen countries doubling down on domestic coal and opening up coal auctions”.

The government has recently amended several rules to make the coal mines more attractive for private players in the upcoming auctions, and has offered some blocks falling in areas which had been earlier designated as ‘no-go zones’. This would also be the first set of coal assets to be auctioned off for selling the fuel in the open market. The government estimates that the country will need 892 million tonne of the fuel in FY30 — around 40% higher than current levels — for power generation.

More than 75% electricity is currently generated by thermal power plants, though the share of such power generation capacity is only around 60%. The intermittent and limited hours of power supply from renewable energy render it unattractive for state-owned discoms, which have to spend more on making backup arrangements. The nameplate tariffs of some solar/wind based projects are currently cheaper than coal, but only when the sun shines and the wind blows.

Speaking at the same event, S Jaishankar, Union minister for external affairs, said that the country has “demonstrated its will through its Intended Nationally Determined Contributions (INDCs), emerging as a leader in green energy transitions”. Jaishankar also stated that it is time “to revisit the very concept of globalisation”, and “the world has been ill-served by a one-size-fits-all approach”. “Whether it is condescending prescriptions given from afar or mass-produce that overwhelm local creativity, they infringe the very diversity that defines us,” the minister said.

As on July 31, the installed renewable energy capacity was 88 giga-watt (GW). Around 34 GW is under various stages of implementation and 34.5 GW under various stages of bidding. If the 45.7 GW of hydro and 6.8 GW of nuclear capacities are included, the INDC target for 2030 under the Paris climate change accord of having 40% of installed power generation capacity from non-fossil fuel sources is expected to be achieved by 2022 itself.