JOURNAL OF INTERNATIONAL ACADEMIC RESEARCH FOR MULTIDISCIPLINARY Impact Factor 1.625, ISSN: , Volume 3, Issue 5, June 2015

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1 DEMAND AND SUPPLY GAP OF COAL FOR INDIAN STEEL & POWER PLANTS: OUR STRATEGY Dr. ASHOK K. SINGH* Mrs. PRIYA KUMARI** *Principal Scientist; Head, Coal Characterization and Coal Petrology Department, RQA CSIR-Central Institute of Mining and Fuel Research, Ministry of Science & Technology, Govt. of India, (Digwadih Campus), Dhanbad, Jharkhand, India **CSIR-Central institute of Mining and Fuel Research, P.O. FRI, DHANBAD ABSTRACT In India about 55% of electricity is generated from coal. Energy consumption in India has risen 700 times in last four decades. The commercial energy consumption at present in India is approx. 350 kgoe. This is far less than developed countries. In the twelfth five year plan ( ) the demand of coal has increased by around 80% annually. In this five year plan coal demand is expected to be around The gap in demands and supply is to be met through imports. The coal import during the year is expected to be around 200. This doesn t appear feasible to meet out through domestic systems. In this paper attempt has been made to discuss the modalities to meet out the gap in demand and supply of coal for two major Indian industries i.e. Steel and Power. KEYWORDS: Demand Supply Gap, Coking Coal, Non Coking Coal, Steel Industry, Power Industry in India. INTRODUCTION Globally, coal resources have been estimated at over 861Bt (billion tonne) which includes for India s 294 billion tonne (Bt) of coal resources (GSI, 2012), other countries with major chunk of resources are USA, China, Australia, Indonesia, South Africa and Mozambique (ICC, 2012). Coal meets around 30.3% of the global primary energy needs and generates 42% of the world s electricity. In 2011, coal was one of the fastest growing forms of energy after renewable sources and its share in the global primary energy consumption increased to 30.3%, all time high since Coal production in Asia Pacific region has grown tremendously and accounts for over 67% of the total production globally (2011) as compared to about 27% in 1981 (in terms of energy equivalent) (ICC, 2012). 71

2 Figure 1: Global coal production (oe) (ICC, 2012). India has the fifth largest coal reserves in the world. Of the total reserves, nearly 88% are non coking reserves. While tertiary coal reserves accounts for a meager 0.5% and the balance is coking coal. The Indian coal is characterized by its high ash (45%) and low sulphur content. The power sector is the largest consumer of coal followed by the Iron and Steel and cement segments. The country s coal production has increased from 431 in to 554 in (an increase of 28.5%).On the other hand the demand for coal has grown at a CAGR of more than 7% in the last decade and has reached around 600. As per the India Energy book, 2012 the country s total demand supply gap (including coking coal) is about 98, out of this India imports about 85 of coal (ICC, 2012). International status for coking & thermal Coal Coal provides 30.3% of global primary energy needs and generates 42% of the world s electricity. Coal was the fastest growing form of energy outsides renewable resources (WSA, 2012). Figure 2: Coal production & consumption (WSA, 2012). Asia Pacific is expected to account for 70.8% of the global coal production and 71.3% of the global consumption in 2015 with China and India being two largest consumers. The demand 72

3 and supply gap is expected to widen in 2030 as Asia pacific is expected to produce 73.8% of the global coal production but will consume 77.7% of the total consumption (ICC, 2012). Table 1: Top ten coking coal producers (2011e) (WSA, 2012) Country Coal Production In Million tonne PR China 504 Australia 146 USA 82 Russia 78 India 35 Among the top ten coking coal producers in the world, PR China remains in the first place followed by Australia, USA and Russia. India stands fifth with annual coking coal production of 35. Canada 29 Mongolia 20 Ukraine 20 Kazakhstan 13 Poland 11 National status for coking and thermal Coal The resources in India are available in older Gondwana Formations of Peninsular India and younger Tertiary formation of north-eastern region. The formation and category wise resources of India (excluding Tertiary Lignite) as on are given below in Table 2 (In million tonnes) (GSI, 2012). Table 2: Category-wise geological distribution of Indian coals PROVED INDICATED INFERRED TOTAL FORMATION GONDWANA COALS TERTIARY COALS TOTAL Table 3: The type wise and category-wise coal resources of India as on are given below (GSI, 2012). Type of coal PROVED INDICATED INFERRED TOTAL (A)COKING COAL Prime Coking Medium Coking Semi-coking Sub-Total of coking (B)NON COKING (C)TERTIARY COALS GRAND TOTAL

4 State-wise distribution of coal reserves As a result of exploration carried out up to the depth of 1200 meter, cumulative total of million tones of geological resources of coal have so far been estimated in country as on The detail of state wise geological resources of coal is given as under:- Table 4: GONDWANA COAL (GSI, 2012) STATE GEOLOGICAL RESOURCES OF COAL() PROVED INDICATED INFERRED TOTAL Andra Pradesh Assam Bihar Chhattisgarh Jharkhand Madhya Pradesh Maharashtra Orissa Sikkim Uttar Pradesh West Bengal TOTAL Table 5: TERTIARY COAL (GSI, 2012) STATE GEOLOGICAL RESOURCES OF COAL() PROVED INDICATED INFERRED(Exploration) INFERRED (Mapping) TOTAL Arunachal Pradesh Assam Meghalaya Nagaland Total

5 (Figure 2A: Distribution of Coking Coal State Wise & Depth Wise (GSI, 2012) (). Approximately 13 % (around 717 ) of total hard coal production is currently used by the steel industry and over 60% of total global steel production is dependent on coal. Our country has very limited resources of coking coal and it accounts for only 15% of the country s overall proven reserves. The Jharkhand holds the majority of the coking coal reserves with total of in which is in the proven category. Madhya Pradesh comes second in the tally with total coking coal reserves of out of this comes in the proven category. Chhattisgarh has the least coking coal reserves of (Fig: 2A). Figure 3: Distribution of Non-Coking Coal State Wise & Depth Wise (GSI, 2012)(). As per demand projection, power utilities would continue to be the most important consuming segment. The share of power is in the total assessed coal demand. (Total non-coking coal demand of ) work out to 74.7% demand vis-à-vis availability for TY of XIIth plan. The majority of non-coking coal comes from the Odisha having the total reserve of ; it has proven reserves. Then comes Chhattisgarh with total non coking reserve of and having the proven reserve of Madhya Pradesh has the least non coking coal reserve of , with a 75

6 proven reserve of (GOI, 2012).According to geological survey of India s reports till , our total non coking reserve is about , with proven reserve of (GSI, 2012).The overall long- term demand of coal is closely linked to the performance of the end-use sectors in India. The end use sectors of coal mainly include electricity, iron and steel and cement. Other industries using coal have marginal impact on the long-term demand of coal. The charts show the projected sector wise coal consumption in India by the end of the 12 th FYP and 15 th FYP (fig 4 & 5). Figure 4 Figure 5 Shortfall of coking coal for steel industries Coal is an essential input in the production of steel. In 2011, the world crude steel production reached 1,518, reflecting a growth of 6.2% over Global steel production depends on coal. Around 68% of total steel production relies directly on inputs of coal. 761 of coking coal and pulverized coal injection (PCI) coals are used in global steel production, which is around 12% of total hard coal consumption worldwide(icc, 2012). Table 6: Crude Steel production (WSA, 2012) YEAR PRODUCTION India has very limited reserves of coking coal, which is a key raw material for the production of steel. About 770 kg of coal are required to produce 1 tonne of steel by conventional route. Coking coal accounts for only 15% of the country s overall proven coal reserves. The Jharia coalfield, located in the state of Jharkhand, holds the majority of the coking coal reserves. The Indian steel industries are facing acute shortage of coal for the last several years (ICC, 2012). As per the report of working group of coal and lignite for the 12 th 76

7 FYP, the steel production by is projected to be 105. The corresponding requirement of coking coal for this quantity of steel is estimated to be 67.2 in (GOI, 2012). Figure 6: Coal demand in India (ICC, 2012). The per capita finished steel consumption in 2011 is estimated currently at 215 kg for world and 460 kg for China, while that for India it is estimated currently at 55 kg (provisional). This clearly indicates scope for increasing the per capita steel consumption, a factor which correlates to the coking coal availability and production within the country (WSA, 2012). Per Capita Use of Steel (2011) Table 7: The per capita use of steel varies significantly around the world (kg per capita) (WSA, 2012). COUNTRY PER CAPITA USE SOUTH KOREA CHINESE TAPEI JAPAN GERMANY PR CHINA RUSSIA USA BRAZIL INDIA WORLD 1157 KG 784 KG KG 460 KG 292 KG KG 57 KG 215 KG KG KG Further, the ministry of steel (Govt. of India) projected to build steel production capacities of 200 by 2020 to meet the rising demand. Out of this, almost 70% of the steel might be based on the basic oxygen furnaces (BOF) technology. Different scenarios for coking coal requirement are also proposed under different studies, and their projections are as follows:- Figure 7: Coking coal demand for steel. 77

8 The current shortage of coal stands at 84 and the same is expected to rise to 300 MTPA. Some of this shortfall will be met by supplies from domestic blocks and rest through imports. Also, the choice between the supplies from domestic and imported coal is mainly driven by timely availability of coal from domestic sources. It became important for India to secure coal through imports from international market to meet their significantly rising coal demand. However, import is mainly dependent on availability of coal in global market, increasing competitive scenario and affordability (ICC, 2012). Figure 8: (ICC, 2012) Shortfall of Non-Coking Coal for Power Sector Coal is the major fuel used for generating electricity worldwide-countries heavily depend on coal for electricity. Of the total electricity consumed in the most of the country, approximately 80% is produced from coal (WSA, 2012). Figure 9: Sources of electricity generation 78

9 India is fifth largest energy consumer, accounting for 4.1% of the global energy consumption. The current per capita consumption of energy in India is 0.5 toe against the global average of 1.9 toe, indicating a high potential for growth in this sector (ICC, 2012). For the XIIth five plan period, CEA has indicated a coal based capacity addition plan of MW (14560 MW in Central sector, MW in the state sector and MW in private sector). This apart, CEA has also indicated MW coal based capacity is under various stages of execution. After considering the capacity addition program of CEA and going by the trend that around 70% of the projected energy requirement to be coal based. Further, considering that there will be substantial increase in use of washed coal and imported coal at power plants, the specific coal consumption has been considered to be 0.70 kg/kwh. The coal requirement for power sector, thus work out to 682 in Approximately, 57% or GW of India s total installed generating capacity of GW is coal fired, while over two thirds of electricity generation is from coal based plants. At global level, coal accounts for 30% of the world s primary energy consumption (GOI, 2012). The average plant load factor for coal plants (which is function of coal availability, repair and maintenance and connected demand) was 61.30%. Part of this can be attributed to the fact that only 89% of the total requirement of coal (30.6 of coal against the demand of 34.4 ) was available. Considering the above facts, it is clear that the shortage of coal has lead to installed capacity remaining unutilized and shortfall in the power generation. On the other hand, electricity being a basic and necessary public service, any nation wanting to grow in economic and social terms must be able to provide sufficient and efficient power generation. Neither manufacturing, finance nor commerce can function without electricity. Table 8: Top Ten Steam Coal Producers (2011e) (WSA, 2012) COUNTRY PR USA India Indonesia South Australia Russia Kazakhstan Colombia Poland China Africa PRODUCTION IN MILLION TON As shown in the above table, PR China stood first worldwide with 2831 of steam coal production followed by the USA and India which comes third in this tally with annual steam coal production of Demand vis-à-vis Availability In overall term, the gap between the projected demand of and the projected domestic availability of and the projected domestic availability of 715 works 79

10 out to in This comprises of of coking coal and of thermal coal. If the production is enhanced to the level visualized in the optimistic scenario, the demand-availability gap would reduce to (coking: & Non coking 150 ).This requirement would be need to be met from imports (GOI, 2012). Table 9: DEMAND PRODUCTION GAP(-)/SURPLUS(+) COOKING (-)35.50 NON-COOKING (-) TOTAL (-) Coal contributes to about more than 1.5% of the GDP of the country. The unavailability of coal will have significant impact on the power generation in the country which in turn would impact new proposed projects in the manufacturing and cement sector in the country and retard overall economic growth. Government strategies & alternatives to fulfill the demand supply gap in coking and thermal coal (Choudhary, 2012) Some of the alternatives routes and strategies suitable for Indian scenario have been discussed as under- 1. Preheating By the Preheating process, the inferior non-coking coal before charging to oven is heated at c, where the bulk density as well as heat conducted to the coal in the oxygen oven is increased improving the quality of coke after carbonization. In some plants this process is being tried in India. 2. Briquette blending By this process the coke strength and reactivity has similar properties to conventional coke in spite of blending of non coking coal. In this process coal is briquetted with the help of binder pitch; the strength of coke obtained from the coal blend is increased by 1.5%. This process of improving coke quality is widely used in Japan and has scope in India also. 3. Formed coke making It is another process for improving coke quality by using non coking coal. The coal is carbonized and the char produced is briquetted at 1-2 tonnes/square inch pressure with tar formed at the same time and the briquette devolatilized. Coke produced in this 80

11 process is suitable for foundries. The process has been tried by number of countries like USA, Poland, UK and India and bears good potential for Indian Industries. 4. Selective crushing By selective crushing, the harder constituents are subjected to more intense grinding to reduce over size. The advantage of selective crushing is that improved quality of coke is produced from coal, which reduces the coke rate by 2.4% and increases blast furnace output by 2.5%. The technique helps in utilization of higher percentage of inferior or poor coking in coal blend. For Indian coal this process may be tried. 5. Technology of group wise crushing of coal. The technology of group-wise crushing of coals, which aims at decreasing the heterogeneity in the properties of different size fractions of coal blend and improving the properties of coarser size fractions by crushing them to groups to the required crushing levels as dictated by the technological requirement. It is being applied in many countries. 6. Stamp charging In this process coal is crushed and compressed by stamping machine, whereby the coke formed is charged to coke oven maintaining certain gap from the wall. The coal density is improved and the carbonized product gets higher micum M40 than the original. CIMFR, Dhanbad has done some research work and it has been found that it is very suitable for Indian scenario. Tata Steel is already using these techniques in India. 7. Beneficiation of coal For Indian condition, we need 17% ash for coking coal and 34% for thermal coal. Ash percentage of different size fractions is lowered through washing using heavy media, jigs, hydro cyclone and forth floatation where coal is washed removing ash and mineral impurities as rejects. The concentrate having good quality coal is used for blend in coke oven. Middlings of higher ash content is sent to thermal power plant and tailing and rejects are disposed off. Sometimes middlings or rejects having even up to 65% ash is used in PFBC boilers for power generation. 81

12 8. Selective agglomeration of coal One of the most useful processes developed for reclamation of coking coal portion from high ash coal or their middling or washed slurry is selective agglomeration using fuel oil or kerosene. It is also being used by different industries in India. 9. Addition of pitch in solvent extract of coal In CIMFR (erstwhile CFRI), research has shown that it is possible to produce coking coals from non-coking coal by addition of solvent extract of coal obtained using anthracene oil under hydrogen pressure of about 60 kg/cm in batch autoclave. Pitch addition also can be done to the blend for improving coking properties. 10. Different alternative routes in steel industries Direct reduction for sponge iron production (DRI route) is tried in our country, where inferior non coking coal, limestone, dolomite and iron oxide used in the rotator kiln giving oxidation-reduction reaction, where 90% metallization of sponge iron is produced and fed in electric arc furnace for special steel. 11. Deshaling of ROM coal by heavy medium Drewbouy vessel The Drewbouy vessel was originally specifically designed for deshaling ROM coal in H.M.S. It is the only available equipment in the world, which can handle 500x500x1200 mm size and is the only option to treat true ROM coal. It holds good prospect for Indian coals. 12. By jigs Babock plant is good illustration of the possibility of utilization of jigs in preparation plants dedicated to deshaling operation in front of power plant. Now a day, the technique is gaining popularity in Indian scenario. 13. Coal and industrial furnace Indian industries use six million tones of coals in furnace alone to produce heat. If we are able to replace the coal from other energy source the scope for saving on coal consumption in furnace becomes as high as 25%. Apart from above alternatives, Government of India is trying its best to acquire more and more coal from overseas. Recently, CIL, Ministry of Coal through its newly formed subsidiary, Coal India Africana Limitada (CIAL) acquired 1.0 Bt coal lease in the Tete province of Mozambique. It contains 80% thermal and 20% coking coal. In other efforts, Government of India is planning to acquire few more coal leases in Australia, Indonesia and South Africa etc. 82

13 Conclusion In view of deterioration of coal quality and preservation of coking coal for metallurgical process, the processes of up gradation of coal quality by treatment mentioned earlier like preheating, briquette blending, stamp charging, beneficiation, may help in Indian scenario. Alternative roots of iron making can largely be used by utilizing large deposit of non-coking coal. The phosphorus content of Indian non-coking coal is quite low. Most of the coals identified for the Inred and KR processes have sulphur below 0.05%. Inred and KR hot metals may be a good substitute for the phosphorus blast furnace pig iron. Both these processes can produce low phosphorus metals through use of non-coking coal. For power sector it would be most sensible to utilize every part of combustible matter in coal i.e. washed low ash coal going to the thermal plant, and the reject produced is burnt in the fluidized bed boiler for further generation of power. The investigation can be directed for removal of high ash stones/carbonaceous matter at high specific gravity by this beneficiation process. In future, when boiler designs are required for higher capacity thermal power unit, beneficiated coal with limited ash content at 25-30% can be transported over long distance by railway system. While the higher ash beneficiated fraction can be consumed by pithead power plant. Acquisition of new coal leases abroad will also help meeting out the demand supply gaps in coal for Steel & Power sectors. Acknowledgement The authors are thankful to Scientist in Charge and the Director, CIMFR for kindly permitting to submit this paper in this seminar. Special thanks to Mr. Ritesh Mohan, Ms Dipti, Mrs. Jyotsna Kumari & Mr. R. Singh for giving valuable suggestions. References 1. Report of the working Group on Coal & lignite, Government of India, Ministry of coal. 2. Shastri Bhawan New Delhi, Government of India, Ministry of Steel, Geological Survey of India Reports, Ministry of Mines, Govt. of India, Kolkata, The Indian coal sector: challenges and future outlook: Indian Chamber of Commerce, World Steel Association, Application of inferior grade of coal for metallurgical as well as for power generation in different industries, Ranjit Choudhary,