Coal India chooses energy-intensive manufacturing; Adani and NTPC chase vertical integration.

For a long while now, from the time #DespiteTheState went to the presses, I have been chasing a story on coal.

You know the score. India’s coal sector is behaving in discontinuous ways — Coalblock auctions find few bidders; Coal India mulls diversification into Aluminium smelting and solar ingot/panel manufacturing; power producers like NTPC and Adani eye not just coalblocks but also discoms. Each of these is new. Back when I was in ET, coalblocks were prized commodities; Coal India was happy mining coal; Adani/NTPC were focusing on power generation.

That series of articles is finally out. The first part came out last Saturday. Feeling all these developments can be traced back to the ongoing crisis in coal-based power — as the sector drifts, India’s coal-majors – be it Coal India or coal-based power generators – are planning their own pivots, my first report looked at the building blocks of that crisis.

The second report, published earlier this week, focused on Coal India. Coal-based power plants are its biggest customers. As they slip into trouble, the state-owned miner is trying to boost growth by entering the manufacturing sector. Given that Coal India is also the world’s biggest producer of coal, it makes sense to ask how much additional coal its proposed forays (into Al smelting and solar ingot-panel manufacturing) might consume.

And today, we have the third and final story in this series. If Coal India is trying to lessen its dependence on thermal power, NTPC and Adani are betting vertical integration will make them cost-competitive vis:a:vis other standalone thermal plants and — for an unknown length of time — renewables. A tack that comes, however, with externalities like oligopoly and worse.

Do read. How these responses fare will (partly) determine India’s coal consumption graph in the coming years. The rest of the answer lies in how India’s solar sector behaves. As CarbonCopy and I have already reported (See, story one, story two and story three), Gas is not likely to be a large part of the country’s energy mix. And so, Solar next.

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