Given the country’s growing shift to renewable energy, the coal ministry has decided to foray into thermal power plants, and not just mine coal.

The Gevra coal mine in Chhattisgarh of SECL, a subsidiary of Coal India Ltd, is the largest coal mine in Asia.

The Ministry of Coal has directed all subsidiaries of Coal India Limited (CIL) to identify de-coaled land for establishing new pithead thermal power plants in order to diversify the operations of its companies.

The decision to diversify the operations of CIL and its subsidiaries from just the mining of coal to building thermal power plants has been taken by the ministry due to the country’s increasing shift toward renewable energy (RE), which is likely to have a capacity of 500 gigawatt (GW) by 2030. In such a scenario, as more RE capacity gets added even beyond 2030, the use of coal is likely to decline, resulting in a coal surplus.

“The use of coal for electricity generation will continue in India, but there will be a gradual decline. We have to look beyond 2030 and plan accordingly, which is why diversifying into fields such as thermal power generation, renewable energy, coal gasification, etc., need to be taken up. The ministry has asked CIL to identify de-coaled land parcels across its subsidiaries for potential creation of new pithead thermal power plants,” said a senior ministry official requesting anonymity.

Lands from which coal has been mined out are called de-coaled mines. A coal pithead, usually located near a mine, is where the mined coal is kept before being transported to power plants. Setting up power plants at the pithead is more cost-effective, with a tentative fixed cost of approximately Rs. 2.5 and a variable cost of about Rs. 1.25 per unit, making it possible to generate power at less than Rs. 4 per unit, as per an assessment by the coal ministry.