coal sector Current Affairs - 2020

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Union Cabinet gives nod for development of Underground Coal Gasification

The Union Cabinet has approved a policy framework for development of Underground Coal Gasification (UCG) in unexplored coal and lignite bearing areas in the country.

Decision in this regard was taken by Union Cabinet Committee meeting chaired by the Prime Minister Narendra Modi in New Delhi.

What is Underground Coal Gasification (UCG)?

  • UCG is a clean coal extraction technology for extracting energy from the coal seams and lignite resources which cannot be mined through traditional mining technology.
  • It is mainly an industrial process which converts coal into product gases such as methane, hydrogen, CO and CO2 that are combusted for electricity generation.
  • The gasification process is carried out in non-mined coal seams using injection of oxidants which brings the product gas to surface through production wells drilled from the surface.

UCG Policy Framework

  • The UCG policy framework has been framed in line with the existing policy for Coal Bed Methane (CBM) development on revenue sharing basis.
  • Development of UCG has been envisaged to provide for energy security and will be adopted for offering the blocks through competitive bidding.
  • Inter-Ministerial Committee under the Union Ministry of Coal with members from concerned Ministries will be responsible for identification of the areas.
  • Central Mine Planning and Design Institute Limited (CMPDIL) will be the nodal agency for all business related proposals and regulations.

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Government adds 18 more coal blocks to fuel the power sector

Government has added 18 more new coal blocks exclusively for the power sector in order to revive the this sector  which was facing hurdles due to poor supply of coal to thermal plants. These 18 coal blocks are added to the existing 74 reserves, which have been earmarked for e-auction as well as for allotment by March 16, 2015.

With the inclusion, the total strength of blocks which would be offered by the Centre through auction as well as direct allotment route is 92.

Top priority to the power sector: Government has given top priority to the power sector, as 59 out of these 92 blocks will be given out for it. Of these 59 blocks, 25 will be put up for e-auction while the remaining 34 will be allotted directly to Centrally-owned as well as State public sector undertakings.

The PSUs, apart from being given blocks directly, also have the option of participating in the auction exercise, as per the Ordinance promulgated by the NDA Government in October 2014. The PSUs will be identified and given blocks (depending on the criticality of their demand) through the already in place Government dispensation route.

Remaining 33 blocks will be offered to the steel and cement sectors.

Ramp up production of Coal India Ltd (CIL): Government is also planning to ramp up production of Coal India Ltd (CIL) which is the largest supplier of dry fuel in the country. For this government is aiming to increase CIL’s current production capacity of 460 million tons annually, to take it to 1 billion tons by 2019.

To achieve the target, Government is planning to introduce modern coal evacuation as well as handling technologies within the next three to four years, as well as by expediting the environmental clearances to CIL’s nearly 200 projects.

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