"If you want to import coal, gas or petrol, it is freely available. But the problem is that imported coal is 60 to 70 per cent more expensive," Chairman of the India Planning Commission, Montek Ahluwalia.
Mr. Ahluwalia’s quote says it all: the Indian coal sector is in shambles and imports are a part of the problem, not the solution. Even though India is home to one of the world’s largest coal deposits the country can’t mine coal fast enough let alone transport it where it needs to go. That’s why their enormous coal plant pipeline is largely an illusion. Now a new study (pdf) from the World Institute for Sustainable Energy (WISE) further underscores the vulnerability of the coal plant pipeline by calling into question the enormous energy security risks coal imports pose. With economic growth slowing down, and clean energy alternatives like wind already cheaper than coal, these new concerns put a big question mark over future growth for the coal sector in India.
Despite the high cost of coal imports until very recently the Indian government was convinced they could heavily rely on them to plug their domestic supply deficit. In fact official government documents placed their imports at somewhere between 35-57 percent of total demand by 2032 (see planning commission chart below). To put that in perspective, even though China has broken records for coal imports they still only account for roughly 7 percent of total coal consumption.