Eco

INDIA’S ENERGY SECURITY: COAL SECTOR 

A final project submitted in partial fulfilment of the course ECONOMICS-II, 4th SEMESTER during the Academic Year 2017-2018

SUBMITTED BY: Khushbu Kumari Roll No. - 1533 B.A LL.B

SUBMITTED TO:

Dr. PETER F. LADIS FACULTY OF ECONOMICS-II ECONOMICS-II

MARCH, 2018 CHANAKYA NATIONAL LAW UNIVERSITY, NAYAYA NAGAR, MEETHAPUR, PATNA-800001

DECLARATION BY THE CANDIDATE

I hereby declare that the work reported in the B.A. LL.B (Hons.) Project Report entitled “Rising Cyber Dependency” submitted at Chanakya National Law University, Patna is an authentic record of my work carried out under the supervision of Dr. Shivani Mohan . I have not submitted this work elsewhere for any other degree or diploma. I am fully responsible for the contents of my Project Report.

(Signature of the Candidate) KHUSHBU KUMARI Chanakya National Law University, Patna 05/10/2017

ACKNOWLEDGEMENT

“I  F YOU WANT TO WALK FAST GO ALONE  I  F YOU WANT TO WALK FAR GO TOGETHER” A project is a joint endeavour which is to be accomplished with utmost compassion, diligence and with support of all. Gratitude is a noble response of one’s soul to kindness or help

generously rendered by another and its acknowledgement is the duty and joyance. I am overwhelmed in all humbleness and gratefulness to acknowledge from the bottom of my heart to all those who have helped me to put these ideas, well above the level of simplicity and into something concrete effectively and moreover on time. This project would not have been completed without combined effort of my revered Economics teacher Dr. SHIVANI MOHAN whose support and guidance was the driving force to successfully complete this project. I express my heartfelt gratitude to her. Thanks are also due to my parents, family, siblings, my dear friends and all those who helped me in this  project in any way. Last but not the least; I would like to express my sincere gratitude to our Economics teacher for providing us with such a golden opportunity to showcase our talents. It was truly an endeavour which enabled me to embark on a journey which redefined my intelligentsia, induced my mind to discover the various events and provisions which led to the development of law in India. Moreover, thanks to all those who helped me in any way be it words, presence? Encouragement or blessings...

- Khushbu Kumari - 3rd Semester - BA LL.B

TABLE OF CONTENTS  Acknowledgement …………………………………………………………………………….3 Table of Contents…………………………………………………………………………...... 4  Introduction…………………………………………………………………………………5

 Aims and Objectiv es…………………………………………………………………………6   Hypothesis……………………………………………………………………………………..6   Research Methodology………………………………………………………………………..6   Limitations…………………………………………………………………………………….7 

1.

 Introduction………………………………………………………………………………..……5

2.

 Increasing Crime Through Cyber

 Dependencies……………………………….…………10 3.

Cyber Dependency Increases Cost Of Production……………………………..………11

4.

Cyber Dependency Adversely affected Indian Economy………………………….……12

5.

 Effect Of Cyber Crime Indian Economy…………………………………………..……….15

6.

Conclusion , Criticism And Suggestion……………………………………………..……..17 

 Bibliography…………………………………………………………………………………18

TABLE OF CONTENTS  Acknowledgement …………………………………………………………………………….3

Table of Contents…………………………………………………………………………...... 4  Introduction…………………………………………………………………………………5

 Aims and Objectives……………………………………………………………………………6   Hypothesis……………………………………………………………………………………..6   Research Methodology………………………………………………………………………..6   Limitations…………………………………………………………………………………….7 

7.

 Introduction………………………………………………………………………………..……5

8.

 Increasing Crime Through Cyber

 Dependencies……………………………….…………10 9.

Cyber

Dependency

Increases

Cost

Of

 Production………………………………..………11 10.

Cyber Dependency Adversely affected Indian Economy………………………….……12

11.

 Effect Of Cyber Crime Indian Economy…………………………………………..……….15

12.

Conclusion , Criticism And Suggestion……………………………………………..……..17 

 Bibliography…………………………………………………………………………………18

INTRODUCTION

Energy security in India revolves around coal sector, which has dominant use in three core sectors i.e. power, steel, cement. Coal Industry itself too is part of core sector. Apart from this there is inconsistent demand from small scale industry involved in brick manufacturing or ceramics. There is increased impetus on moving away from coal based technologies to cleaner and efficient technologies, but still demand of coal will continue to rise almost in  proportion to industrial growth in India. This is because base infrastructure in all core sectors is designed for coal consumption and still India’s supply of power and steel doesn’t match the

demand. Even new capacity additions in these sector using clean energies will fall short of incremental demand and again usage of coal in capacity addition will be indispensable. India is well placed to fulfil this demand given there is adequate transparent government policy and reforms in state monopolized sector.1 India is not well endowed with energy resources in comparison with its large population. While it supports 17% of the world’s population, it only has 0.6%, 0.4% and 7% of the world’s oil, gas and coal reserves, respectively. This has led to large import dependence to

meet its demand for energy, which has been sticky at nearly 35% of its annual primary commercial energy demand over the last several decades. This has led to intensive efforts to exploit India’s coal reserves and explore oil and gas. However, due to a number of structural

issues, both exploitation and exploration of energy minerals have been poor so far. India’s renewable energy potential is vast and holds a great promise. It is evident that an integrated approach towards developing domestic energy resources, and giving special attention to the ones in which India may have higher potentials, has been engaging the attention of India’s economic planners. On the other hand, there is a large scope for effecting energy efficiency in the demand sectors as well. Electrification of this demand could also ease India’s import dependence, as th ere would be a shift from liquid fuels to coal and renewable energy. It is noteworthy that India’s

import dependence for liquid fuel (petroleum) is nearly 78%. The shift to electricity could be  particularly do-able if India’s renewal energy potential could  be tapped, and a major demand shift could be made in the cooking and transport sectors, which are presently heavily

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dependent on petroleum products. It has made good progress in the former on many fronts such as adopting efficiency in white goods, but needs to usher in the same in industry, transport, cooking and in buildings. India is the world’s fifth largest energy consumer, accounting for 4.1% of the global energy

consumption. Maharashtra is the leading state in electricity generation. The current per capita consumption of energy in India is 0.5 toe against the global average of 1.9 toe, indicating a high potential for growth in this sector. Of the total electricity consumed in the country, approximately 80% is produced from coal. More, streamlined classification is on basis of carbon content and stage of formation. Coal is formed by fossils of plants, trees, bushes etc. which got deposited in shallow basins millions of year ago. Later decomposition by bacteria converts it into peat, which is generally unviable to mine. After this bio- chemical action ceases and geo chemical action becomes dominant. It results in gradual development of Lignite, Bituminous and Anthracite coal. Peat is Impure, has very low carbon content (in turn calorific value) of about 40%. Lignite, bituminous, anthracite coal has carbon content of 4060%, 60-80% and 80-90% respectively. Bituminous coal has special significance because it contains Bitumen which on heating in absence of oxygen is converted into coking coal. This removes volatile material in the coal and is further heated to get Coke, which is used in blast furnaces to extract iron from iron ore. This type of Coking coal is what India lacks, as 88 % of reserves are of Non Coking type and rest 12 % have high Ash content. Indian Coking Coal is cheap and of poor quality and imported Coking coal is expensive and good quality. Steel industry blends both to secure a moderate cost and quality.2

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AIMS AND OBJECTIVES

1. To study about India’s Energy Security. 2. To study about India’s Coal Sector.

HYPOTHESIS The researcher presumes that : 1. Coal sector is the biggest source of power supply as compare to other resources in India. 2. Abundance of Coal in India but no proper utilisation. 3.

SAMPLING TECHNIQUE Researcher has used purposive and convenient method of sampling due to paucity of time and various limitations of research.

RESEARCH METHODOLOGY The researcher has adopted doctrinal method of research only.

SOURCES OF DATA SECONDARY SOURCES 



Books  Newspaper



Journals



Magazines

STYLE OF WRITING The researcher has used both descriptive and analytical styles of writing.

MODE OF CITATION The researcher has used a uniform mode of citation throughout this paper.

 SCOPE AND LIMITATIONS OF THE STUDY Though the researcher has tried her level best not to leave any stone unturned in doing this  project work to highlight various aspects relating to the topic, but the topic is so dynamic field of law ,the researcher has sight with some of unavoidable limitations. The limitations encountered by the researcher were the paucity of time.

BLACK DIAMOND: LIMITED RESOURCE OF ENERGY IN INDIA Coal is the most abundant form of fossil fuel available on earth. They were formed by the decay of old plants and animals several centuries ago. coal is mostly found below the earth and is major source of fuel for electricity generation as of today. Most power stations on earth require huge reserves of coal to produce electricity continuously without break. When coal is  burnt, it produces heat that is used to convert the water into stream.

The steam is then used to move the turbines which in turns activate generators which  produces electricity. Coal contains excessive amount of carbon. When it is burnt to produce  power, it mixes up with oxygen to produce carbon dioxide. Carbon dioxide is one the gas responsible for  global warming.  The use of coal and other fossil fuels have only increased since they were discovered. Their excessive extraction and use has resulted in degradation of environment and ecological imbalance. Though coal is still available in big quantity on this earth but it is predicted that it won’t last for more than 40 -50 years if switch is not made to

green or clean energy.3 There are different types of coal such as peat, lignite, sub-bituminous and bituminous. The first kind of coal is peat which is merely a mass of dead and decomposing plant matter. Peat has been used as fuel in the past, as an alternative to wood. Next, the peat becomes lignite, a  brownish rock that contains recognizable plant matter and has a relatively low calorific value. Lignite is basically the halfway point from peat to coal. The next phase is sub-bituminous which is a shade of dull black with very little visible plant matter. This type of coal has a less than ideal calorific value. Bituminous coal is the best quality of coal. It. is jet black, very dense and brittle. This type of coal has high calorific value.4 India has limited coal reserves, plus, availability of domestic coal is a challenge on account of various bottlenecks such as capacity expansion, coal block allocation, land acquisition, environmental and forest clearances, etc. Transportation of coal is a big concern in itself. Ensuring smooth supply of coal requires efficient supply chain management process. As a remedy to the shortage of fuel, the government of India has planned for the deregulation of the coal sector for competitive resource allocation. But even though If these commodities are 3 4

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imported from the world markets, the cost production will go up leading to the rise in the cost of production of products in other sectors. The higher cost of production will lead to inflation.5 USES OF COAL IN DIFFERENT SECTORS Electricity Production

Modern life is unimaginable without electricity. It lights houses, buildings, streets, provides domestic and industrial heat, and powers most equipment used in homes, offices and machinery in factories. Improving access to electricity worldwide is critical to alleviating  poverty. Coal plays a vital role in electricity generation worldwide. Coal-fired power plants currently fuel 37% of global electricity and, in some countries, coal fuels a higher percentage of electricity.6

Steel sector

Coal is an essential input in the production of steel. In 2011, the world crude steel production reached 1,518 MT, reflecting a growth of 6.2% over 2010. The per capita finished steel consumption in 2011 is estimated at 215 kg for world and 460 kg for China, while that for India it is estimated currently at 55 kg (provisional). This clearly indicates scope for increasing the per capita steel consumption, a factor which correlates to the coking coal availability and production within the country. India has very limited reserves of coking coal which is a key raw material for the production of steel. Coking coal accounts for only 15% of the country’s overall proven coal reser ves. As per the report of the Working Group of Coal

and Lignite for the 12th Five Year Plan, the steel production by 2016-17 is projected to be 105 MT. The corresponding requirement of coking coal for this quantity of steel is worked out at 67.2 MT in 2016-17.

Cement sector India is the second largest producer of cement in the world. Large amount of energy is required during the production of cement and coal is used as an energy source. During the process, coal is usually

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 burnt in the form of powder. Around 450g of coal is consumed to produce 900g of cement. The cement industry is the third largest consumer of coal in the country. Due to the high cost and inadequate availability of oil and gas, coal is used as the main fuel in the industry. However, in the last few years due to rapid adoption of the dry process, the specific consumption of coal for producing cement has reduced significantly . It has also improved efficiency in cement kilns and increased the use of fly ash (produced in power plants) and granulated slag (produced in blast furnaces of steel  plants) in the production of cement (Coal Vision, 2025).

ROLE OF COAL IN INDIAN ECONOMY Around 69% of India's power generation is coal based .Even under a least coal usage scenario, coal will supply more than 40% of the primary commercial energy in 2031-32 .It is the most abundantly domestically available fossil fuel, while about 80% of oil has to be imported .A total of 293.50 billion tons (BT) of geological resources of coal has been estimated in the country (8% of the global coal reserve) Coal is viewed as a key element in increasing energy access in India, as over a quarter of the country does not have access to electricity . Coal will remain the cheapest source of electricity for at least another two decades .CAGR for Indian coal production has been estimated at 5%-6% in medium term Demand supply gap is 200 MT, India imported 168 MT of coal (2012-13) .Demand supply gap for coking coal is 34 MT .India is the 2nd largest producer of cement in the world, coal shortage affects cement industry . Cost of imported coal is twice as compared to domestic coal • Coal import is 3rd largest consumer of foreign exchange (US$ 22 billion in 2012-13, 20% increase in 2013-14)

COAL SECTOR AND GOVERNMENT POLICIES Coal is the primary energy resource of India. India has the third largest coal reserve after the United States and China. By 2025 India is likely to become the second largest consumer of coal . Coal sector remains the least efficient of all the energy sectors. Demand of coal is sure to rise with increasing demand of electricity. Uncertainty over coal production expansion has led to low levels of investment in the power sector. High environmental and social costs are always associated with high dependence on coal. India can be brought on to a more dependable and cleaner energy pathway by sustainable development of the coal sector. With an aim to ensure co-ordinated and efficient utilization of coal with the growing demands of the country, India’s private coal mining companies were nationalized under the Coal Mines Act 1973.

Steel/ Iron companies and power industries were allowed to produce coal from the designated mines for their captive consumption through the amendment of the Act in the year 1976. To encourage foreign and private investment in India’s mineral sector, the National Mineral Policy was formed in

the year 1993. The Ministry of Coal and Mines was authorized to govern the pricing and dissemination of coal along with subsidy allocation according to the Colliery Control Order of 1945. The Ministry required the coal producers to distribute their products through SEBs due to the absence of direct relations between the mining firms and purchasers. The Coal Linkage Policy in the year 2000 derestricted prices for all coal qualities but dispersal persisted under the jurisdiction of the government.7 The National Coal Distribution Policy (NCDP) was introduced in order to assist supply of guaranteed quantities of coal to core and non-core consumers . Fuel Supply Agreement (FSA) in place of the linkage system was the key feature of this policy. Reform of the coal sector is extremely crucial at this juncture as coal is the primary energy resource of India. Deteriorating domestic production and arrangement for coal handling are the serious issues in India’s energy supply. Private firms should be given access to engage themselves in commercial coal

mining, technical enhancement and efficient management of coal sector in order to make India energy secure.

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RIGOURS USE OF COAL AND SUSTAINABLE DEVELOPMENT

Coal is one of the cheapest and most important sources of energy, responsible for 41% of electricity production worldwide. The Pros of Coal are most evident in Electricity Generation where it continues to grow at a sharp pace in countries like India and China. In many important countries like India, China, Germany, USA, Coal is the primary source of electricity and energy. Other smaller countries also heavily rely on coal for example Poland 94% , South Africa 92%, China for 77% and Australia for 76% of Electricity. Coal has  played this a pivotal role in the development of mankind and his progress into the Industrial Age. Coal is an essential raw material and fuel for important global industries like Cement and Steel. Different qualities of Coal are used for different purposes. For example coking coal with higher carbon percentage is used in Steel Production while Thermal Coal is used in Production of Electricity. It was during the Industrial Revolution in the 18th and 19th centuries that demand for coal surged. Coal is responsible for almost a quarter of the global energy production,41% of the Electricity Production and more than 60% for Steel Making. Here

is

a

list

of

the

Major

Uses

of

Coal

1. Electricity Production –   Coal is mainly used as Fuel to generate Electricity through combustion. Approximately 6.8 Billion Tons of Coal was consumed and that is expected to keep on increasing at around 1.5-2% per year in the next 20 years.Steam coal, also known as thermal coal, is used in power stations to generate electricity.

2. Steel Production –   Steel Industry is the second largest user of Coal after the Electricity Industry. More than 600 million tons of Coal were used to produce more than 1 Billion Tons of Steel. Coal is an essential raw material along with iron in the production of steel which is one of the useful metal products used by man today. Coking Coal is a solid carbonaceous residue derived from low-ash, low-sulphur bituminous coal.

3. Cement Industry –   Coal is used as an energy source in the cement industry. Large amounts of energy are required to produce cement. Kilns usually burn coal in the form of  powder and consume around 450g of coal for about 900g of cement produced. By products generated from burning coal in coal-fired power plants such as fly ash, bottom

ash, boiler slag and flue gas desulphurisation gypsum are also used in Concrete Production (source WCA). Fly ash can be used to replace cement in concrete

4. Paper Industry and Aluminium Industry –   Both these industries require large amounts of Fuel and Energy. Coal being the cheapest energy resource forms an essential input to these industries. The price and availability of Coal is an important factor in the growth of these industries

5. Chemicals and Pharma Industry –   Several chemical products can be produced from the  by-products of coal. Refined coal tar is used in the manufacture of chemicals, such as creosote oil, naphthalene, phenol, and benzene.

6. Coal Gas and Coal Liquid as Transportation Fuel  – Current Transportation Industry does not make much use of Coal as Fuel. However the increasing cost of Oil has made it economical to consider converting Coal into Gas and Liquid which can be used to power vehicles, ships etc. Coal is also used in thousands of other applications and products like soap, fibre making, rayon, cooking fuel etc.8

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ENVIRONMENTAL IMPACT OF COAL SECTOR IN INDIA Achieving energy security which is needed not only for higher GDP growth but also for assuring inclusive growth to all her citizens and ensuring environmental security. Coal meets not only commercial energy needs but also ensures lesser dependency on nearby forest areas for collection of firewood. Coal mining and coal consumption are environment unfriendly. There are negative social impacts as well, such as displacement and lost livelihoods . Coal usage in India also has impacts beyond India. In 2011, though India’s annual per -capita CO2

emissions at 1.6 tons was considerably lower than the global average of 4.9 tons, India was the world’s third largest emitter of CO2 with 1,970 million tons. Of this, coal usage

contributed about 970 million tons, or about 49.24% of India CO2 emissions .India needs coal but coal mining and subsequent usages of coal has adverse impact on climate which may risk various forest types FUGITIVE METHANE EMISSION IN COAL MINING

Fugitive emissions are unintended emissions, including both carbon dioxide and methane that arise during the production, processing, transportation, storage and distribution of coal . Previously trapped methane and carbon dioxide gases are released into the atmosphere as coal seams are mined. The level of fugitive emissions from coal mines varies from mine to mine . Due to low concentration of methane gas, mitigation is currently a costly option for the coal mining industry9 Air Pollution:

In India, air pollution due to coal fires is also a severe problem. The major pollutants are oxides of N and S, one coal dust, suspended particulate matter, reparable particulate matter,  poly aromatic hydrocarbons (PAHs) and benzene soluble matter. coal fires volatilize a large number of potentially harmful heavy metals like arsenic, selenium, mercury, lead, sulphur and fluorine. These could condense on dust particles and get inhaled or ingested by the  people or they could gain entry to local water bodies and thus enter food chain causing severe diseases. There have been documented reports of stroke, pulmonary heart disease and chronic obstructive  pulmonary disease due to air pollution. Heavy metals along with PAHs can cause a number of ill effects on health like cancer, neurotoxicity, cardio toxicity, mono toxicity, arsenics, fluoridise, CO poisoning etc.10

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OTHER RESOURECS OF ENERGY IN INDIA Nuclear: Because India’s coal production at the current level is sustainable for only a few more

decades, viable alternatives must be developed and brought to the market. Nuclear power is a low carbon energy source. That means that the pollution problems stemming from generation are minimal; instead, its environmental costs show up at the back end of the production chain in the storage of nuclear waste, a testy political issue. Sun  : A resource with greater potential in the short term is solar energy. India is endowed with

abundant sunlight and solar radiation. Solar radiation is most concentrated in the north and west, in Rajasthan and Gujarat. The potential amount of energy to be reaped is staggering  — an estimated 13,000 MW based on existing infrastructure alone. Wind: India also has a sizable home-grown wind industry, with a total installed capacity of 5,340

MW and seven manufacturers of wind turbines. India recently overtook Denmark to become the fourth-largest wind energy market in the world. Wind energy is strongest on the coasts, particularly in Tamil Nadu, Karnataka, and Maharashtra, as well as in landlocked Rajasthan. The low cost and readiness of the wind industry in India make it an attractive source for short-term growth. Natural Gas: Natural gas produces less carbon dioxide and pollutants than other fossil fuels. India’s

use of natural gas is growing faster than its use of other fossil fuels, at an average of almost 10 percent  per year over the past six years. India imports small amounts of natural gas, which make up 8 percent of its commercial energy usage. To meet its natural gas demand, India primarily uses its own domestic supply off its western coast. India recently found a gas field deep in the Krishna-Godavari basin, with reserves of between 10 and 20 tcf (trillion cubic feet). These reserves would be 40 times larger than those in the Bombay High field and double the entire annual gas production of India’s Oil and Natural Gas Corporation (ONGC). Plans for the field’s development are still in their initial stages while companies wait for the government’s approval. In the medium term, expanding the use of natural gas is a good solution to

coal usage .11

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COAL SECTOR AND SUSTAINALBE DEVELOPMENT India‘s energy and economic development has a cause and effect relationship. With India being a

growing economy, there is external resistance for sacrificing economic growth for the sake of  protecting environment in the future. But India needs to keep up the pace of economic growth to ensure the good of its masses.12 India needs economic growth and development to free itself from the evil clutches of poverty and hunger. To ensure the desired rate of growth of the economy it also needs adequate energy either indigenously or by means of import. This entails that in order to maintain the required economic growth India would have to exploit the natural resources in the form of coal, hydro, gas nuclear, and wind. But the challenge is how it can harness the energy resources so as to ensure its energy needs and at the same time make it sustainable for its future generations. , India has to depend largely upon coal. Coal today accounts for 50% of India’s commercial energy

consumption and around 78% of the domestic coal production is dedicated to power generation. Coal shall remain the most dominant energy source till 2031-32 and possibly beyond. Coal for instance, will dominate India’s energy basket in terms of catering to its present and future needs considering the

volatility of crude oil both in terms of price and supply disruptions.  Nuclear energy offers India powerful means for long term security. It needs to develop its thorium cycle for nuclear power. India and USA recently have signed a historic nuclear deal. This will help India in removing the hurdles that it faced in procuring nuclear fuel and technology in the future. This is a win-win from India’s perspective as this will enable India to build more nuclear plants to meet its future energy needs. This will also enable India to reduce its dependence on foreign oil and gas. India needs to establish energy markets so as to optimally utilize indigenous resources and externally trade energy sources to meet the demand at affordable prices with environmental responsibility. The restructuring of the energy sector is urgent in the near future. Further the sustainability of the natural resource base can be ensured by recognizing the role of all stakeholders, and by strengthening governance for Sustainable Development at the local and national levels. India further needs to strengthen its health care systems so as to avoid environment related health risks.13

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13

CONCLUSION AND SUGGESTIONS Coal is one of the cheapest and most important sources of energy, responsible for 41% of electricity production worldwide. Energy security in India revolves around coal sector, which has dominant use in three core sectors i.e. power, steel, cement. India is the world’s fifth largest energy consumer, accounting for 4.1% of the global energy consumption. Coal is the most abundant form of fossil fuel available on earth. They were formed by the decay of old  plants and animals several centuries ago. coal is mostly found below the earth and is major source of fuel for electricity generation as of today. Coal plays a vital role in electricity generation worldwide. Coal-fired power plants currently fuel 37% of global electricity and, in some countries, coal fuels a higher percentage of electricity. India is the second largest  producer of cement in the world. Large amount of energy is required during the production of cement and coal is used as an energy source. Around 69% of India's power generation is coal  based .Even under a least coal usage scenario, coal will supply more than 40% of the primary commercial energy in 2031-32 .

BIBLIOGRAPHY