demand and supply gap of coal for indian steel & … · 2015. 6. 6. · mrs. priya kumari**...
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JOURNAL OF INTERNATIONAL ACADEMIC RESEARCH FOR MULTIDISCIPLINARY Impact Factor 1.625, ISSN: 2320-5083, Volume 3, Issue 5, June 2015
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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 (2012-2017) the demand of coal has increased by around 80% annually. In this five year
plan coal demand is expected to be around 900-1000 Mt. The gap in demands and supply is
to be met through imports. The coal import during the year 2016-17 is expected to be around
200 Mt. 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 1969. 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).
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Figure 1: Global coal production (Mtoe) (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 Mt in
2006-2007 to 554 Mt in 2011-2012 (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
Mt. As per the India Energy book, 2012 the country’s total demand supply gap (including
coking coal) is about 98 Mt, out of this India imports about 85 Mt 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
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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) 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 Mt.
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 1.4.2012 are given below in Table 2 (In
million tonnes) (GSI, 2012).
Table 2: Category-wise geological distribution of Indian coals
Table 3: The type wise and category-wise coal resources of India as on 1.4.2012 are given below (GSI, 2012).
Cou
ntr
y
PR
Ch
ina
Au
stra
lia
US
A
Ru
ssia
Ind
ia
Can
ada
Mon
goli
a
Uk
rain
e
Kaz
akh
stan
Pol
and
Coal Production
504 Mt
146 Mt
82 Mt
78 Mt
35 Mt
29 Mt
20 Mt
20 Mt
13 Mt
11 Mt
In Million tonne
PROVED INDICATED INFERRED TOTAL
FORMATION
GONDWANA COALS 117551.01 142069.51 321383.99 292004.51
TERTIARY COALS 593.81 99.34 799.49 1492.64
TOTAL 118144.82 1422168.85 33183.49 293497.15
Type of coal PROVED INDICATED INFERRED TOTAL
(A)COKING COAL
Prime Coking 4614.65 698.71 0 5313.06
Medium Coking 12836.84 11951.47 1880.23 26668.54
Semi-coking 482.16 1003.29 221.68 1707.13
Sub-Total of coking 17933.35 13653.47 2101.91 33688.73
(B)NON COKING 99617.65 128416.04 30282.09 258315.78
(C)TERTIARY COALS 593.81 99.34 799.49 1492.64
GRAND TOTAL 118144.81 142168.85 33183.49 293497.17
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State-wise distribution of coal reserves
As a result of exploration carried out up to the depth of 1200 meter, cumulative total of
293.497 million tones of geological resources of coal have so far been estimated in country as
on 1.4.2012. The detail of state wise geological resources of coal is given as under:-
Table 4: GONDWANA COAL (GSI, 2012)
STATE GEOLOGICAL RESOURCES OF COAL(Mt)
PROVED INDICATED INFERRED TOTAL
Andra Pradesh 9566.61 9553.91 3034.34 22154.9
Assam 0 2.79 0 2.79
Bihar 0 0 160 160
Chhattisgarh 13987.9 33448.3 3410.05 50846.2
Jharkhand 40163.2 33609.3 6583.69 80356.2
Madhya Pradesh 9308.7 12290.7 2776.91 24376.3
Maharashtra 5667.48 3104.4 2110.21 10882.1
Orissa 25547.7 36466 9433.78 71447.4
Sikkim 0 58.25 42.98 101.23
Uttar Pradesh 884.04 177.76 0 1061.8
West Bengal 12425.4 13358.2 4832.04 30615.7
TOTAL 117551 142070 32384 292005
Table 5: TERTIARY COAL (GSI, 2012)
STATE GEOLOGICAL RESOURCES OF COAL(Mt)
PROVED INDICATED INFERRED(Exploration)INFERRED (Mapping) TOTAL
Arunachal Pradesh 31.23 40.11 12.89 6 90.23
Assam 464.78 42.72 0.5 2.52 510.52
Meghalaya 89.04 16.51 27.58 443.35 576.48
Nagaland 8.76 0 8.6 298.05 315.41
Total 593.81 99.34 49.57 749.92 1492.64
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(Figure 2A: Distribution of Coking Coal State Wise & Depth Wise (GSI, 2012) (Mt).
Approximately 13 % (around 717 Mt) 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 37598.01 Mt in which 18112.13 Mt is in the proven category. Madhya
Pradesh comes second in the tally with total coking coal reserves of 2187.43 Mt out of this
354.49 comes in the proven category. Chhattisgarh has the least coking coal reserves of
170.02 Mt (Fig: 2A).
Figure 3: Distribution of Non-Coking Coal State Wise & Depth Wise (GSI, 2012)(Mt).
As per demand projection, power utilities would continue to be the most important
consuming segment. The share of power is 682.08 Mt in the total assessed coal demand.
(Total non-coking coal demand of 913.30 Mt) 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 142894.82 Mt; it has 51095.32 Mt proven reserves. Then comes
Chhattisgarh with total non coking reserve of 78845.82 Mt and having the proven reserve of
20612.60 Mt. Madhya Pradesh has the least non coking coal reserve of 42870.07 Mt, with a
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proven reserve of 16948.38.(GOI, 2012).According to geological survey of India’s reports till
1.04.2012, our total non coking reserve is about 418094.80 Mt, with proven reserve of
168881.32 (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 12th FYP and 15th 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 Mt, reflecting a growth of 6.2% over 2010. Global steel production depends on
coal. Around 68% of total steel production relies directly on inputs of coal. 761 Mt 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 2004 2005 2006 2007 2008 2009 2010 2011 PRODUCTION 1061 1147 1249 1347 1341 1236 1429 1518
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 12th
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FYP, the steel production by 2016-17 is projected to be 105 Mt. The corresponding
requirement of coking coal for this quantity of steel is estimated to be 67.2 Mt in 2016-
17(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 SOUTH KOREA
CHINESE TAPEI
JAPAN GERMANY PR CHINA
RUSSIA USA BRAZIL INDIA WORLD
PER CAPITA USE
1157 KG 784 KG 506 KG
480 KG 460 KG 292 KG 284 KG
123 KG 57 KG 215 KG
Further, the ministry of steel (Govt. of India) projected to build steel production capacities of
200 Mt 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.
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The current shortage of coal stands at 84 Mt 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
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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
79010 MW (14560 MW in Central sector, 12080 MW in the state sector and 52370 MW in
private sector). This apart, CEA has also indicated 38905 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 Mt in 2016-17. Approximately,
57% or 118.7 GW of India’s total installed generating capacity of 207.9 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 Mt of coal against the demand of 34.4
Mt) 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
China USA India Indonesia South
Africa Australia Russia Kazakhstan Colombia Poland
PRODUCTION IN MILLION TON
2831 Mt
849 Mt
509 Mt
373 Mt
250 Mt 199 Mt
178 Mt
98 Mt
80 Mt
65 Mt
As shown in the above table, PR China stood first worldwide with 2831 Mt of steam coal
production followed by the USA and India which comes third in this tally with annual steam
coal production of 509 Mt.
Demand vis-à-vis Availability
In overall term, the gap between the projected demand of 980.50 Mt and the projected
domestic availability of 980.50 Mt and the projected domestic availability of 715 Mt works
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out to 265.50 Mt in 2016-17. This comprises of 35.50 Mt of coking coal and 230.0 Mt of
thermal coal. If the production is enhanced to the level visualized in the optimistic scenario,
the demand-availability gap would reduce to 185.50 Mt (coking: 35.50 Mt & Non coking 150
Mt).This requirement would be need to be met from imports (GOI, 2012).
Table 9: DEMAND PRODUCTION GAP(-)/SURPLUS(+) COOKING 67.2 31.7 (-)35.50 NON-COOKING 913.3 683.3 (-)230.00 TOTAL 980.5 715 (-)265.50
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 150-250 0 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
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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.
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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.
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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, 2012. 3. Government of India, Ministry of Steel, 2012. 4. Geological Survey of India Reports, Ministry of Mines, Govt. of India, Kolkata, 2012. 5. The Indian coal sector: challenges and future outlook: Indian Chamber of Commerce, 2012. 6. World Steel Association, 2012. 7. Application of inferior grade of coal for metallurgical as well as for power generation in
different industries, Ranjit Choudhary, 2012.