Cement, Energy and Environment

and institutional framework. Let us take a look at each of these factors to get a clear understanding of this situation. Technology At the time of independence, the country's power generation capacity was about 1500 MW (megawatt). This mostly consisted of small hydro and coal-based thermal power stations. The main objective at that time was nation building, and thus, electricity generation was one of the basic concerns. And the technology to use coal– fired thermal power plants was easily available and cheap. In the other words, immediately in the post-independence period, a coal-based economy suited our purpose and objective. An coal became a natural starter, along with hydroelectric power. But things soon started to get dogmatic as our technological evolution got stuck in time. Even today, m1nmg is inefficient, with thermal plants using older sub-critical technology. Coal production is being increased through more and more opencast mining and over-exploitation of existing mines. The inability of technological development to move beyond coal and, at the same time, enhance the coal mining process has been critical bottleneck for the economy and handicapped growth. Relative costs particularly, industrial Till the 1980s, most coal mines in the country were underground mines, as opposed to opencast ones. As underground mining is labour– intensive, the cost of coal production remained low in the pre-nationalization period. And even when the country moved towards opencast mining, economies of scale allowed coal production to rema1n mexpensive. However, the fact is that it is very difficult to assess the 'real cost' of domestic coal because of the presence of heavy cross subsidies in rail transport; archaic method of coal pricing based on useful heat value; and difficulty in putting a cost to externalities involved in the absence of proper studies. Beliefs and perceptions One of the most important reasons underlying India's dependency on coal since independence and the relative neglect of the development of other technological options has been the belief that the country has an immense coal reserve - enough to sustain the country for hundreds of years. And till date, this perception prevails . The Statistical Review of World Energy conducted by the British Petroleum lists India's proven reserve to production ratio at 114, as on 2009. This means that at the current rate of coal production, the reserve will last for 114 years. However, in the recent years, it has increasingly evident that the actual extractable reserves of coal in the country are far less than what these statistics show. This ambiguity over the actual coal reserves in the country is mainly because the assessment of India's coal reserves it itself ambiguous. The reserves have been . inventoried by the GSI (Geological Survey of India) on the basis of a geological classification system, and we still do not have any comprehensive inventory assessment based on the UNFC {United Nations Framework Classification). According to S K Chand, Senior Fellow, Regulatory Studies and Governance, TERI (The Energy and Resources Institute), 'The operating belief of possessing huge quantities of coal led to stagnation of policy and outlooks, and an insufficient development in infrastructure that would have enabled the use of other alternatives such as natural gas, nuclear options including the thorium route, and distributed renewables. Consequently, today, not only is coal firmly entrenched as the primary fuel source in India, but alternatives are also not really feasible right away.' Institutional framework The coal industry was nationalized between 1971 and 1973. The then-existing legal and regulatory authorities like Chief Inspector of Mines, Coal Board, and Coal Mines Welfare Organization notwithstanding, the reasons cited for nationalizing the same were the following . 0 Private operators were corrupt 0 They were engaged in slaughter mining 0 They were not willing to modernize o They were unable to increase coal production to meet national demand o They were not meeting norms related to working conditions of workers, payment of wages, health, and education. Consequently, the entire coal production segment is now under the public sector, mainly dominated by the CIL (Coal India Limited). However the condition of the coal sector of India has not changed much. The monopolistic situation has 24