Coal Still Powers Much Of India’s Industry. Why Does It Remain A Troubled Sector?
Insights on what India’s coal surplus reveals about infrastructure bottlenecks, market design, and energy policy.
In this episode, journalist Puja Mehra speaks with Subhomoy Bhattacharjee, Journalist and Contributing Editor at Business Standard, about the paradox at the heart of India’s coal economy—why the country is sitting on large coal stocks even as it continues to import coal for power generation. They discuss how India’s transition from coal shortages to apparent surplus masks deeper structural problems in production, transportation, pricing, and quality.
Drawing on recent data and policy decisions, Bhattacharjee explains why domestically mined coal often fails to reach power plants economically, how high rail freight costs and geographic mismatches distort supply, and why many plants prefer imported coal despite higher headline prices. The conversation also examines the opening up of coal mining to private players, the weakening of Coal India’s monopoly, and the push towards market-driven coal pricing through proposed coal exchanges.
The discussion concludes by looking ahead to India’s energy future, assessing whether coal consumption has peaked, how rising electricity demand from data centres and the AI economy could reshape power needs, and why coal is likely to remain central to India’s power mix for years to come. Tune in for insights on what India’s coal surplus reveals about infrastructure bottlenecks, market design, and energy policy.
NOTE: This transcript is done by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.
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TRANSCRIPT
Puja Mehra: Subhomoy, thank you so much for coming to the show.
Subhomoy Bhattacharjee: Thank you very much, Puja, for inviting me.
Puja Mehra: Today, I want you to help us understand India's coal economy, in particular because I read that India has a surplus of coal and is looking to export some of these stocks. So, from import dependence going to export sounds very exciting, but often it happens in India that on the surface, the news headlines, something looks very exciting. And once you start reading a little more and understand a little more, details come out which sort of give you real insights into how the economy works.
And I thought, who better than you to help us understand the reality of India's coal economy, which is so important for the rest of the economy.
Subhomoy Bhattacharjee: It is actually a very interesting thing that you looked into, that whether India is really planning to export coal. Let's break it up into two ways that automatically would mean that India is producing more coal than what it needs. And we also have the type of coal that the world needs for us to be able to export.
So, the second part comes later, but the first is about the export. Why do we say that we are exporting? Because the principal thing that has been talked about a long time was that India has a coal shortage.
Now, essentially, that means that either we have overcome the shortage or we have come to a phase where the shortages don't matter. Putting it in a straightforward way, India now produces about 1 billion tonnes of coal and our demand for coal is roughly about 1,100 to 1,200 tonnes of coal. So, 1.2 billion tonnes of coal, to make the comparison simpler. So, that would mean that we actually have a shortage. So, where is it that we are saying that we can export coal? Well, one of the reasons why we are saying we will be able to export coal or we need to export coal is something that dates back to the basic structural problem of the coal economy, which is that while the coal is getting produced, the coal doesn't necessarily reach those places where it needs to do at the price at which it needs to do.
Now, what does that mean? Most of the coal that is produced is essentially the steam coal that we produce, using the nomenclature that's globally. This coal is essentially meant for use in the thermal power plants.
Indian power plants need coal. We have a long railway network that sends the coal in, but frankly, the coal that is produced isn't economically viable in lots of cases where we need to send that coal. So, because of that, coal India often ends up, in fact, as we speak, coal India has a pithead supply, which means that basically coal that is standing next to the mines of about 90 million tonnes, which is not the normal amount that should be there.
It should be more than 30 to 40 million tonnes. About 90 million tonnes are standing there. And the reason why it's standing there is because the coal that is to be sent to the thermal power plants isn't getting sent.
So, the idea is that can we export that coal? And that is the basis on which the coal ministry has come up with the suggestion that we should export the coal to our neighbours who obviously don't have coal, Nepal, Gutan and Bangladesh. So, that's the first part of it.
Puja Mehra: So, the cabinet seems to have approved this proposal to export coal, but what is the bottleneck that prevents the coal that is mined by coal India to reach the power plants that actually need this coal?
Subhomoy Bhattacharjee: Yes. So, the basic challenge that we have is that our coal that we produce, there are two problems there. And of that, the principal problem is that a tonne of coal to be able to travel from a place where it is produced to the places where it needs to be, where the consumers are sitting, is a very costly process.
This is something that we have faced for several decades and this problem hasn't gone away. Essentially, our coal that sits in Mahanadi coal field, which is the primary producer of coal in India, about 200 million tonnes comes from there. The next is Southeastern coal fields, about 150 million tonnes come from there.
So, these together are the largest producers, both as you can see are on the Eastern side. Our coal consumption for the power plants that would produce power happens in Western India and in Southern India. So, it's a long journey from Eastern India to Southern India.
Since that would mean travelling either by train, waggons, freight, train rakes, sorry, or by road, which is much more costly. The coal, by the time it reaches or rather the price at which it reaches these thermal power plants becomes costly. Still, many of the power plants use them, that's part of a coal economy, but it does keep it costly.
So, the power plants usually don't want to keep an excess supply of coal with them. They know that there's coal available. If they want, they buy it as they need it from the coal mines.
So, essentially, coal gets produced because India needs to produce coal. It has got a target of producing about a billion tonnes of coal. It's producing it, but that coal, as you can see, isn't getting sent to the power plants in the quantity that it needs to go, at the price at which it needs to go.
So, therefore, given the fact that the realisation per unit from coal that is converted to electricity is not rising, power prices, electricity prices in India are on a slightly decelerating slope, it means that there is a problem there.
Puja Mehra: And this cost of transportation is high because of the geographical distance? Or is it high because transportation itself is expensive? We've not been able to work out the economics of transportation.
Can't railways deliver this coal at a lower cost? Or through road, is that even viable?
Subhomoy Bhattacharjee: By road, it's almost impossible. The cost is very high. I mean, just imagine using diesel to run a truck carrying a tonne of coal to any place.
That's hugely costly exercise. We've done it sometimes too in the past, but that's not a very great idea. So, when a large quantity of coal that has to go to a power plant, to again put it in numbers, one rig of about 60 waggons is about what a power plant needs in about 14 days.
This is about a power plant that I'm talking about, of about a 4,000 megawatt power plant, which is the standard issue power plants in most places, would need a trainload of coal. A trainload of coal means that the railways have to supply it. Principally, railways should be able to do it.
But if the railway should be able to do it, then their challenge is because for the railways, the coal is the largest provider of revenue. 40% of the railway freight revenue comes from coal. So, for the railways, it should be an easy thing.
But because of the asymmetry of the coal railway lines, the fact that our freight, there is always a shortage of waggons that is available to send the coal. Railways are not able to send it at the price that they should be. There is A, the lack of adequate capacity to transport the coal at the time at which it needs to do.
B, the fact that the railways themselves, as a government monopoly, isn't particularly efficient, worsens the situation. And third, all of that is also contributed to by the fact that the coal that goes on to these power plants are not of the best quality. Every year, the quality of the coal that is being transported to these thermal power plants is worsening.
Because the coal mines themselves have got into a problem, which we can talk about a bit later. But the three together ensure that the coal supply to these power plants at the distance where they are becomes impossible. To take a simple example, Gujarat, for instance, has a large consumption of philipsity.
Gujarat almost entirely depends on imported coal or on gas to run its power plants. It doesn't take coal from Manedi coal fields or the southeastern coal fields because travelling all that rail break through the entire northern India is a humongously costly exercise. To take another example, the Punjab has got a power plant which is the Talwandi Sahib power plant.
It is about a distance of 1600 kilometres that a train has to travel. You can imagine the per unit cost that a per tonne of coal would be loading onto. It becomes a costly exercise for these plants.
So therefore, coal sits on our pittance and gets exported. The southern Indian power plants often import coal. In fact, they have therefore got around the challenge by configuring their power plant in such a way that they run better on the imported coal from South Africa and Australia.
Now, what's the difference that those coal have a larger calorific value, better calorific, that means the coal burns better. And because the coal burns better, those coal in despite being imported from say countries like South Africa and Australia, they give better economic value. The thermal power plants run by coal are able to run them and realise better unit value per electricity.
So therefore, we have excess supply of coal and that coal now is being sought to be exported to Nepal, Bhutan and Bangladesh.
Puja Mehra: In fact, another decision of the cabinet is to set up coal exchanges like we already have for power trading exchanges etc. I come to that but before that you know there's a question that comes to mind which is why are plants located at such long distance from where coal is available? What is the reason for not locating electricity power plants closer to the sources of coal?
Subhomoy Bhattacharjee: That was primarily because at the time when these plants were to be set up, two things happened. First is that transmission over, there is an engineering issue, the transmission of electricity over long distances, there used to be a huge transmission loss. That over the years, over the decades has got reduced.
Today, plants are able to supply electricity to long distances. So it does make sense to have the plants at the pithead. But then comes the economic issue.
For instance, the Punjab power plant that I was talking about, Punjab doesn't have any coal. It makes no sense to have a power plant sitting where it is sitting there, the Talwandi Sahib power plant. So why shouldn't Punjab set up the plant in somewhere near Chhattisgarh or plant near Roorkela or some other places?
Well, the obvious point is that Punjab can't earn any revenue. Punjab can't earn any economic value out of the plant. Apparently, the sort of employment generation that happens around those plants, the virtuous cycle that gets created, those are the plants that Punjab can't get.
But if Punjab was actually more sensible, it would have actually got cheaper electricity considering that it supplies electricity free to the farmers. But short-term logic dictates that you put the plant where the consumer is. Now, that obviously means putting the plants often near the big cities, which is actually a no-no, given the pollution challenge and all that.
It shouldn't have been there. Those shouldn't have been there. But then in that case, we need to re-imagine the entire coal economy in a different way altogether, which I don't think anyone is really thinking of at this stage.
So, therefore, we have plants which are near the cities, milking smoke, creating pollution. We used to have two near Delhi and the Baddhapur thermal power plant. Those have been mothballed.
But there are lots of others near many cities, and they actually add to all sorts of problems. There's a study that is going along about whether these plants also create sulphur oxide. And there's a battle that's going along over the data between companies like NTPC and think tanks saying that there's a debate that's continuing.
Essentially, not a pleasant debate, but essentially what it means is that the coal economy in India, the way it was structured and the way it still is structured, is frankly very suboptimal. Which again brings me to the point that because people use coal, but just to the extent that they need it, and in an inefficient way, you get the piles of coal at any moment unless there's a crisis. Something like, as I said, 90 million tonnes right now sitting on the pitheads, and those coal can be possibly exported.
There's a new phenomenon that's developed, you know, Puja, about the coal economy. And that, of course, is something, I mean, after having talked about all the negatives now, that's something, a positive thing that's happening. So by opening up the coal mines to the private companies, so there are those auction, for several years there wasn't much of a visibility about what happened.
But now those mines have started producing some serious quantities of coal. In fact, in aggregate, if we look at the government data, the coal production from these mines have gone up to something like 150 million tonnes in the last financial year, and this year they should be crossing 200 million tonnes. Now if that is so, then there is a good amount of coal that is being mined by these private companies using better technology, and they are coming on steam, and frankly, many of the thermal power stations would be happier getting coal from these mines.
Now that creates another challenge, because it means that Coal India, which had been supplying more than 85 percent of our coal to the country, would actually find that the demand for its coal is coming down. The private companies have two advantages. A, they are producing coal at a cheaper price.
Even if they don't produce at a cheaper price, they are producing better quality coal, because they are able to use technology to look for coal where Coal India wasn't able to. So the coal that is coming out from there is better, and because there's competition between them, they obviously would be looking for good buyers. The thermal plants largely are good buyers.
They are largely run by the central government utilities or even private sector. They are people who do not have any payment problems. So the coal companies would want to buy or sell them, which would mean that many of the policies, or rather what is called the coal linkage policy, that had been set up for coal plants for ensuring that coal is supplied to the power plants, which are of earlier vintage, don't need to be there.
What are these coal linkage policies? Which basically means that when there was a time of shortage, these power plants signed agreements with Coal India to say that you will ensure that I get at least 90 percent of my supply at all times, or 85 percent of my supply at all times. It was called the satisfaction level.
Those satisfaction levels don't need to be there, obviously, if coal is sitting on the pitheads and nobody is buying it. So what happens? Because in the current situation where we don't have a shortage of coal, the thermal plants will buy it from the private companies.
And that is where the demand for a coal exchange is coming in, because the thermal power plants are saying that we can buy our coal at the quantity that we need from anybody who's there, who's able and willing to send me coal at the shortest possible notice, which means that essentially they are signalling that they would want a market-driven price of coal. So coal exchange comes from that demand. There are other companies which are the smaller demands for coal, sponge iron plants, paper plants, cement plants.
They also need coal. They are also demanding, and all of them feel that their interest will be served better by having a market-driven price. This is, of course, going to be a very interesting thing, because it means that even till now, coal prices were set by the Ministry of Coal.
Based on calorific value, different grades of coal would be given particular prices. Those prices will not be working anymore. If you have a coal exchange, it gradually means that there's going to be pricing freedom.
That could actually mean a very interesting change in the entire coal economics.
Puja Mehra: I'll ask you to help us understand how the coal economics will change with the shift from controlled coal prices or government-set coal prices to market-determined coal prices. But before that, I must ask you that Coal India is a monopoly and a large one at that. Is it not resisting this shift to the market?
Subhomoy Bhattacharjee: It can, provided it has a chairman who stays there for a longer time. Coal India chairman gets appointed by the Ministry of Coal. They have an average tenure of two years, sometimes less.
That provides for no long-term policy continuity. Coal India right now actually even changed its balance sheet. It has now started valuing, because Coal India is going in for the listing in the many of its subsidiaries.
You would notice that a new entity has started showing up in the Coal India balance sheet. What it means is that the asset that is sitting on their books, they want to value those assets also, not sold. Basically, receivables.
Receivables from whom, that's not yet decided, but they are essentially started to value it. It used to initially be zero. From a couple of years ago, they've started valuing the asset that is sitting out there as coal, which has got a value.
That is driving up supposedly the profitability of these companies.
Puja Mehra: No, come on. You don't list a company when it was a monopoly. You're listing it just before you're opening up the market.
I'm not sure. It should be listed great. The balance sheet will be studied by a lot of analysts.
It will bring some discipline. But still, you should list when you're a monopoly.
Subhomoy Bhattacharjee: You should list when you're a monopoly. No, I'm not saying that you should not list. What I'm saying is that the company has actually started valuing assets.
I mean, I can see many of the subsidiaries suddenly looking much more profitable than they were earlier. And when I look at the difference, I find that this is this valuation. So anyway, the markets will sort it out.
Puja Mehra: I mean, are you suggesting that the valuation is going up because of creative accounting ahead of the listing?
Subhomoy Bhattacharjee: I'm not suggesting, I'm saying it. After all, the profitability is looking sharply up. If you look at any one of the Coal India subsidiaries which are coming to the market, you've seen the profitability has suddenly jumped.
Of course, the markets will discount it. But what I'm saying is that it does show the problem that I said at the top, that the Coal India has a lack of continuity at the top. And I think that's a serious problem that's come to direction.
So then I think that's seriously weakening Coal India's ability. You can't just have a PSU, which was actually sitting on a cash reserve of something like 35,000 to 40,000 crores year on year, is now looking, tending to become difficult. We don't want that sort of a thing.
Whatever we might have, I mean, objections or issues over the coal economy, the health of Coal India wasn't ever a concern. That's something that I don't like the look of.
Puja Mehra: When you had come for the episode on India's power sector, you had said that a lot of distribution companies have these unpaid dues accumulating on their balance sheets. Does Coal India also see something like that?
Subhomoy Bhattacharjee: No, because Coal India sells only to, as I say, to the generation companies. And the generation companies are all cash rich. Think of NDPC, think of Tara Power, think of, I mean, these are the companies, of course, Tara Power has almost entirely gone out of coal.
But even the other companies that are there, Torrent and Emerity, they're all cash rich companies. So Coal India doesn't have any problem of that sort, which is why it's actually a bit of a peculiar thing that Coal India should not be able to realise value at the rate which it is able to. Coal India, frankly, has got a problem in terms of the fact that it's not been able to mine its assets better.
And that has come because of the fact that after a period when it was listed, it was doing well, the direction seems to have gone out of Coal India. And that's a serious problem there. And that needs to be corrected.
Because we know that coal is going to be India's asset for the next at least 15 to 20 years. So you can't have India's preeminent coal mining company getting into difficulties because no one is looking at how the company is functioning.
Puja Mehra: Now, I will come to the climate side of things to ask you when India's consumption of coal will peak. But before I get to that, since we are talking about how the market is developing for coal in India, do you anticipate any resistance from the large number of employees of Coal India, its status changing from a monopoly to a market-driven sector?
Subhomoy Bhattacharjee: That is one of the very positive things about the coal market in India or the coal economy in India. Because Coal India has been a government company, the coal economy in India has largely been government-led, government employee-led. So you would expect that that opposition to be there.
But frankly speaking, they have found over the years that Coal India has taken care of their interest, whether as permanent employee or as contractual employees. So there isn't too much of resistance from the employees to that sort of a thing. In fact, neither during Coal India's listing, which happened in 2009, or subsequently when Coal India now is listing its subsidiaries, there is any trouble on that front.
So that part is taken care of. What's not happening is that the private sector companies that are coming in are much more fleet-footed. And they have the chance and they are showing the ability to take away a very large proportion of the share of the coal economy.
Remember, there's one thing that has not been talked about, Puja, and that's something which needs to be thought through. Many of the coal miners, the private companies who are coming in, are also those who have subsidiaries working with Coal India as mine development operators. In fact, that's a story that should be looked at very carefully.
So here's a company which is competing with Coal India and it's also got a subsidiary which is working as a contractor for Coal India. Now what happens when there's a rush to get consumers? Coal India had brought in MDOs, mine development operators, to ensure efficiency because its own employees were not adequately productive.
India had one of the lowest productivity of coal employees across the world. And there was also a shortage of machinery and there were a lot of factors. When the MDOs came, Coal India got the advantage.
The delta was there. That coal mining rapidly went up, especially today Coal India mines more than 70 percent of its coal through these MDOs. Many of these MDOs are also part of the competing companies that have come into the coal sector.
The coal ministry has not written in any clause that forbidding this sort of an arrangement. This is something, I mean, everybody has been happy that all coal companies have come in, they've bid, they're there. You look at probably any of the names of the coal companies that have come in, you find that they have an association with Coal India.
In fact, that is how they have born and brought up. This is something that needs to be looked at very carefully, which is why I have often said that we need an energy regulator which subsumes the interest of the coal economy. This is something clearly on which the Ministry of Coal has slipped up.
And India doesn't have a coal regulator, there's a coal controller, but that's basically an extended arm of the ministry. It has got other role. It doesn't have the capacity to look at this at all.
This is something that is a huge weakness that is going to develop and must be addressed.
Puja Mehra: So you're saying there is nobody looking at the conflict of interest?
Subhomoy Bhattacharjee: No one. There's nothing there in any of the clauses that says this conflict of interest shouldn't be there.
Puja Mehra: And I should have asked this earlier, but it strikes me now. So when you say that the government sets the price of coal, is it also for the private miners?
Subhomoy Bhattacharjee: It sets a coal price, which again, that's another weakness that you brought out. It sets a price for Coal India Coal. And since Coal India was the overwhelming supplier, so Coal India and Singarani Coal Eries Company, the sister arm of Coal India, that essentially ensured that that was the price of coal.
The price of coal that now will be coming will be two types of prices, one set by the private miners, which is the market determined rate, and other by the Coal India. So we will have, in fact, if there's an exchange, that might actually clean up this issue. But this price that is being set by the government is not mandatory for the coal miners, unless they enter into what is called a bilateral deal with companies, which is a long term coal linkage policy, which none of them have.
So coal pricing is going to be an issue. Coal production is going to be an issue, because coal production, as I said, they are a conflict of interest. So these are issues, these are subjects that needed to be sorted through.
Puja Mehra: And at the moment, what about allocation of coal that is available and that is usable? So how does Coal India's...
Subhomoy Bhattacharjee: That was a coal linkage policy, that for every tonne of coal that Coal India extracted, Coal India would sign a coal linkage policy with somebody or other. Usually, Tamil power plants had the predominant authority. In fact, if you remember the big debate during the time of Manmohan Singh, when he was the Prime Minister in 2000, and this happened in 2010 and 11, was that Indian industry turned up to complain to the Prime Minister that the coal linkages that are there are not being honoured, and fresh linkages are being signed and their interests are not being taken care of for the existing ones.
That was their scale of shortage. We have moved far away from there. Today, even though those linkages are there, nobody really looks at those linkages.
Those linkages essentially ensure that they are the first right, but when you're talking of export of coal, first right, when we're talking of coal exchange, first right, again, I mean, all of those things are pretty much old policy tools, which have no particular relevance today.
Puja Mehra: Now, the important question of how long will we see use of coal, given climate change, given that we have to reduce our emissions? Have we already peaked in our consumption of coal, or are we going to see a rising consumption of coal? What will be the tipping point?
How do you see the future?
Subhomoy Bhattacharjee: India is right now producing, as I said, about 1.2, I mean, India is actually consuming 1.2 tonnes of coal, of which about 1 billion comes from domestic and 200 million we import. It keeps on fluctuating, but 200 to 250 million tonnes we import. Is that where we would be?
I would think, no, we'll actually be consuming more. Why do I say so? There's this huge number of GCCs that are coming in.
The AI economy needs massive amount of power. India doesn't have a problem in terms of the capacity to supply power. We have got about 480 to 500 gigawatt of power capacity already, of which not more than half gets used.
So, we have the power plants. Most of these power plants are thermal power plants. So, therefore, coal usage will rise.
If you look at daily production figures from the grid controller of India, of the breakup between the different types of sources, renewables, nuclear, thermal, coal, and all that, we see that coal averages about 70 to 71 percent. During the rainy season, it comes down to 62 to 63, but that's not the standard. So, which means that the renewable power, despite the capacity, isn't producing more than 13 to 14 percent of the daily production.
It's got much larger capacity. As we say, we are talking about 45 to 50 percent capacity now for renewable energy, but renewable energy is not producing that much. Lots of reasons, but the short of it is when the GCCs demand extra power, we are seeing that happening in the USA and other countries where there's a massive demand for electricity.
I suspect the same thing is going to happen in India, and if that is so, then definitely our demand for power is going to rise very sharply very soon. This year, in fact, in summer, we had a very short summer, so the power peak didn't happen, even though the previous power minister, Mr. R. Kissing, had predicted that we'll be going up to 270 gigawatts of consumption if that didn't arrive.
Next, this summer, we'll have to see how the global climate plays out, where the pattern plays out, but the short of it is we are going to need more coal. So, coal definitely is definitely not peaked in India by any reckoning, which means that while the renewable power production might rise, but that's got different economics altogether. That part typically doesn't come when, if you don't have battery, it doesn't typically come during the evening power surge, which typically happens between 6 p.m. to 10 p.m. in the night, but even if we leave out that part, even that daily standard generation, that requirement that happens from the, going to happen from the new economy, which is basically the, as I say, the GCCs and others, I would expect the demand for electricity to rise, and correspondingly, the demand for coal would rise.
Puja Mehra: I will invite you to come again for a conversation on renewable sources of generating electricity, but I must at this point ask, for sake of continuity, so when new data centres, which are very electricity-intensive are set up, should we not mandate that they try and source electricity from renewable sources? We can do it at this point.
Subhomoy Bhattacharjee: We can do it at this point. It's a very good thought. Well, it should be possible because, after all, it's a question of feeding into the lines, and frankly speaking, the grid controllers, remember most of the, I mean, most of the engineers in India, grid controllers, all of them, happen to be from the thermal power window.
They have a natural affinity for the coal because that gives a nice balance. You don't have to reckon with grid fluctuations and stuff and all that, but I think that's an engineering issue that can be solved. It's not such a technically difficult thing.
Across the world, we are seeing that this is something that can be solved. We have the capacity. I suspect this is a question that's going to come soon about what sort of a path are the GCCs and others going to use.
It'll be great if they use more of the renewable power. Right now, you know, we have the challenge that the renewable power doesn't, we have got what is called the renewable power obligation, which means that states are supposed to buy a particular percentage of their renewable power, but that shouldn't be necessary. They should rather be opting for renewable power.
That is something that we'll have to see. The challenge there is more engineering rather than the capacity of the renewable power to be able to provide. Again, despite the constraints of battery and everything, battery energy storage and everything, it's doable.
And we need to do it because otherwise the demand for coal would really be shooting up. I don't expect the coal demand to play to off very soon. That original point that you made about whether India will be exporting, you could very soon see that India suddenly saying, no, no, no, we don't want to export.
And somebody, some bureaucrat saying, putting in orders saying, let's put a ban on this for some time. Export control, like we have for rice and wheat and others at times.
Puja Mehra: Minimum export price, or maybe even quotas. But given that some of the Western countries, actually the United States is not as keen on climate change. Probably what you're saying is true.
Global demand for coal may remain high or even keep rising.
Subhomoy Bhattacharjee: No, I wouldn't say that far. Because for instance, I was seeing some latest data from USA. Even in USA, the demand for coal has fallen off.
Of course, the demand for natural gas has sharply spiked. But the demand for coal has actually come off in USA, despite the fondness for fossil fuel by the current administration. Europe, of course, we know what's happening.
So I don't think globally there's that much of demand, which is again, I mean, something about our export market, that globally, countries like Australia, China, they're not really able to export much of coal. Even though there was a recent report by S&P, which said that the demand for what is called the coking coal, with the coal that is used for steel plants, is going to spike and India, because India is raising its projection for producing steel to something like 330 million tonnes. If that happens, then India will actually be importing a lot of coking coal.
And since we don't have supplies at all of coking coal, that means supplies from Australia. How much Australia will be able to provide is, of course, a different question. Because right now, there's a lot of environmental pushback against building of new mines.
But demand for that sort of coal will come. However, that coal business is, of course, entirely different from the thermal power, steam coal business, because this coal is available in India, and it provides a supply to the other sectors. The demand for coking coal, and which goes into steel plants is an entirely different track altogether.
If you shift on to hydrogen, as there's a lot of an effort and thought about it, then maybe that would sort of start to soften. But that's still some way off.
Puja Mehra: There are so many things to ask. Companies that are interested in green hydrogen are also doing coal mining. Also, there is nuclear to talk about.
So, you must come again to talk about electricity generated from renewable sources. But before I let you go, I must ask you also about nuclear and what that will do to coal.
Subhomoy Bhattacharjee: Nuclear's problem is that the technology for nuclear hasn't really developed since after the ban and everything. I mean, those decades of challenges. So, nuclear technology is concentrated in a very few places, Japan, Russia, and USA.
And we, frankly, would have a lot of runway ahead for nuclear plants to really go above the 3% that they are currently, even though we are talking about SMR, the small modular reactors. But the first prototype of at the earliest. So, I don't expect nuclear to really start up.
It is a good prospect, definitely. I definitely do think that there's a lot of our issues on climate analysis would have been handled much better if we had looked at nuclear carefully, not just India, globally. But that would need time to really make a change in terms of the entire power equation.
At least the period that we are talking about, 15 years to 20 years, I don't think nuclear would make a substantial change to India's power generation capacity.
Puja Mehra: Great. Thank you. Thank you so much.
Subhomoy Bhattacharjee: Thank you.
