Role of State Owned Enterprises in the Energy Transition | ft.  Dr. B. Veera Reddy

[Podcast intro]

Welcome to the season five of the India Energy Hour podcast. This podcast explores the most pressing hurdles and promising opportunities of India energy transition through an in depth discussion on policies, financial markets, social movements and science. Your hosts for this episode are Shreya Jai, Delhi based energy and climate journalist and Dr. Sandeep Pai, Washington based energy transition researcher and author. The show is produced by 101 reporters, a pan India network of grassroots reporters that produces original stories from rural India. If you like our podcast, please rate us on Spotify, Apple Podcasts or the platform where you listen to our podcast. Your support will help us reach a larger audience.

The role of State-Owned Enterprises (SoEs) in India’s energy transition cannot be overstated. SoEs, or Public Sector Undertakings (PSUs), control majority of India’s fossil fuel production and provide millions of jobs across the country. As India accelerates its energy transition, these enterprises will play a crucial role in scaling the rapid deployment of clean energy. Historically, SoEs have been key drivers of economic growth and local welfare. However, they are often seen as bureaucratic, slow in decision-making, and susceptible to political influence.

To gain insights into the role Indian SoEs can play in this energy transition, we spoke with Dr. B. Veera Reddy, Former Director (Technical) of Coal India Limited and Chairman-cum-Managing Director of Central Coalfields Limited. Dr. Reddy brings nearly four decades of experience working with Indian SoEs.

[end]

[Podcast interview]

Sandeep Pai: Dr. Reddy, really a warm welcome to the India Energy Hour podcast. We’re just delighted and thrilled to have you. you know you’re somebody who I have followed for a long time your career path but also all your work that you have done in the coal sector. so it’s truly an honor to have you on the podcast and just have a conversation with you. So welcome again.

Dr. B. Vera Reddy: Thank you. Yeah, thank you.

Sandeep Pai: Okay. so yeah, let’s get started. So I think before we get into the topic of role of state owned enterprises or PSUs in the energy transition, we will spend some time just to understand your journey. we have a lot of students who and lots of professionals who listen to it from all over the world and in India. So it’s always you know, for them it’s always a fun story to hear how people have traversed their life and journey. So I’ll get started. tell us about your sort of journey. Where are you from? What did you study? like how did you get into a psu? that must have been a long time ago. and you know like you over the period of time you really rose through the ranks and Finished it as Chairman cup Managing Director of Central Coalields Ltd. And Director Technical of Coal India. So just tell us your life story.

Dr. B. Vera Reddy: Yeah thank you Sandipji that Yeah Basically I am from Telangana From a small village near to Hyderabad. from agricultural background and schooling is done in government school live within the village and in nearby town. Then intermediate also in government college in nearby town. the place name is Kodard that is again near to Hyderabad. So then Secured good rank in engineering entrance and selected mining engineering and completed mining engineering from Usmania University passed out in 1986. Then on 9th of January 1987 I joined Syhranic Alls which is again that coal fields located in Telangana. So there I joineded as a mining graduate trainee. Then gradually with the time and all I was promoted to different stages and reach to the General manager position in Syhrany simultaneously I completed Mtech Mining part time Mteh Mining. Then also I completed PhD in Mining particularly feasibility of Mass production technologies inounded mining under the guidance of Professoror R.A. madoji and also from IIT Dhanbad and finally I got PhD award in 2022. and as far as my carerier is concerned I was working right from 1987 till 2019 December for about 32 years I was in Shrani. and finally I was general manager at Adriala Longwal project that was a very prestigiousground project with so many first time technologies and with so many mining challenges like ultimate depth is about 700 meters so far in the country there’s no mine with such depth and with more automation and Long Wa technology and so that way I was there for about 17 to 18 years from drawing board to complete execution of the project and till itained 2 million tons per annum. probably first mining underground project to ach issue that kind of production and all. Then While working at Adria project just I applied for this director post in coal India and then I got selected through this PB selection process. Then I joined Eastern Coal Fields one of the subsidry companies of Coal India. I worked there for about two years two months as a Director Technical Eastern Coal Fields limited and there Ranan coal fields are there and very good quality coal is available Basically non Coing coal but very Superior quality coal that can substitute the import of Coal for non regulated sector and all. So during that time just We planned Underground roadmap for eastern coal fields. And also Some sustainable practices like Getting this sand from Warurden. so we initiated certain steps like paste field technology own mining. So that Solves really two problems. One is that There is no need for rehabilitation. Surface will not be disturbed. And That is People Like that kind of methodound mining with stowing so that they are not disturbed and you are not losing any soil or surface still that can be utilized for agriculture purpose. And all during the mining process and after the mining process. And also you can address the disposal of fly ash also with wasteful technology. So did lot of work and we have identified some projects for that it is under progress. Then again I Got selected as a Director Technical Coal Indiacl as Director Technical. Then I got selected as Director Technical of Coal India holding company. Then again Giant Coal India Headquarter in Kolkata. There as Director Technical I’m supposed to monitor all the subsidry companies which are spread over in about eight states. Right From Assam to Maharashtra. there are eight states. Chisgar Jar Khan, Wor Isa Then West Bengal Maharashtra and then Nasam Majhya Pradesh also up. Also there are two mindes. So all these mines I used to monitor. So that gave me an opportunity to know the different geo mining conditions and different working cultures and also dealing with different state governments. So that has given me a lot of exposure and lot of experiences. I worked as Director Technical Coal India for about two years five months. Then simultaneously I got an opportunity to work as a cmdc. So there also I was there for one year. So there also I had very satisfying experience in ccl. result oriented approach like Improvement in quality improvement in production in all the parameters there was a significant improvement and particularly quality improvement with that the customers were very happy and So that’s My career journey. And Simultaneously I held number of positions like Chairman CL Africana Limited. There is a One subsidry company calledal. vidsh. that is We have one office in Mozambique for exploration purpose and all. I was chairman for that Coal Vish subsidiary company for some time. Then cclcmd. Then also I was part of my official director in Most of the subsidiary companies like scl, CMPDAL and Then Eastern Coalields Bharat Coking Co Ltd. then also I was director in some of the boards of Coalignite. Urja Viikas Private Limited CIL Solar PV limited CL Navakarnia URJA Limited and also I was a member in SIM for Research Council. So these are some of the portions I held during my career. And also I was immediate post president of mgmi that is a very prestigious organization Mining a GE Geological and Metallurgical Institute of India. with very experienced members. About 3,000 members over the country and Their branches are spread over in the country and I was there as president and during that time we conducted number of seminars and to share the technologies and all that we did. I was also an organizing committee member for World Mining Congress and also director in World Coal association and visited about 20 countries mostly coal producing countries took training particularly in China, Australia. In US also We have seen min. Closer practices. Not only that Mass production technologies and digitization and all. and after visiting them then we tryied to implement in coal India wherever we are lacking we try to implement them and they are under implementation. So again I was also chairman of th Chair Fertilizers Ltd. TFL so that is again a JV company of Coal India where ammonia is manufactured. I was well chairman for hu URL Hindustan Urwarak Chemical Limited HUL Rasign Limited Hralka. So this is briefly about my career. I also authored about 25 papers and submitted in international conferences and all. So I think this is about my career and my life right from schooling toill now. And presently I am now after my retirement again I’m working with the Hon.

Shreya Jai: Great sir. that is some length and breadth of experience that you have across the sector. And I’m very keen to ask you you know in these many years how much has coal mining changed you know compared to say the 80s and 90s. the images of which continue to be seen in mass media to what coal mining is for you now. And while you’re at it maybe you can also address how was your experience taking coal India globally. You mentioned that they have an office in Mozambique. So what. What was that experience like? so please tell us about the local and the international experience that you had.

Dr. B. Vera Reddy: But what what were the changes how the polling has to transform from 30 years back to now.

Shreya Jai: Right.

Dr. B. Vera Reddy: So 30 years back mostly it was conventional system of mining and mostly it was underground mining and productivity was very low and there were no mandating facilities or no digitization of operations. There was no technologies, advanced technologies and all. So I think in 1972 at the time of nationalization of mines the coal production of coal India was about 78 million ton. Now that has gone to 773 million ton in 2324 and the method of mining got reversed that in 1972 it was mostly underound mining. There was no open ca Mining. In 1980s Open Co Mining started in coal industry within India. Then gradually open costas picked up and underwound mining has gone down. So with OPENC cost now presently when you see the production lost during last year or this year. 96% of coal production comes from opencast mines and about 4% comes from underground mining. This is one thing. So safety has been improved. If you take the safety figures hundreds of people were killed in 1970s due to explosions, disasters and all. Now that has come down to about total country may it is coming to 30 to 40 now. So multiple times the extidents rates have been decreased particularly fatal and serious extents. It is because of adoption of advanced technologies and maning facilities, monitoring systems and automated technologies. So this all helped in bringing awareness among the workmen and all. So all this helped in improving these safety standards and all simultaneously productivity has gone up because of higher capacity machines, latest machines, new technologies like long wall mining, continuous miner open costast mining, drag line technologies, shovel dumper of higher specifications and input pressure conveyor technology. So the surface miners that blastless mining and all, all these things helped in improving the productivity, reducing the extents and all that and more communication. And as people earlier all were illiterate but now most of the people are qualified and they are able to operate this automation process and this SAP system or whatever it is now in entire coal industry. SAP SAP is being implemented in seven modules that right from patient preparation to everything it is done in SAP and people are working on it. New generation people and people are We have to change the system now. Present generation is not ready to work as involved in days like manual filling of coal into baskets and then loading onto tubs and They are Exposed to more risk. Now the manual mining is completely replaced with mechanized mining. So that way productivity has gone up and safety also improved considerable. This is about mining changes. And the second thing is that the global experience and where we stand in presently. So actually globally, Coal India is largest coal producing company globally. A single company with the last day it produced about 773 million ton. So coal India is the number one company as far as coal production is concerned globally. So globally there was about 8.75 billion ton production last year. And out of that mostly 4.75 or 5 billion ton comes from China. About 55%. Rest of the coal production comes from remaining countries. Basically number two is India produced about 1 billion last year. 990 is 7 million ton. so almost all 1 billion ton. Then Indonesia, then Australia, then Russia, America also there in between these five are the major coal producing companies. So that way coal India is having Gabra mine in the world. There are top 10 mines, as far as production is concerned. We have one mine in Wyoming in America. That mine has produced about 65 million ton or so. And Gabra produced about 62. Mine Gavra is inl. Chisgard that produced about 62 million ton. Kusunda also produced about 40 million ton. So when compared with the production globally we are not inferior where At least we can say that at par with them. And Our technologies and all also were at par with them. The only thing is that we have number of minds and Our problem is that we have more number of employees unlike other countries. So that is a social obligation. Also we are running some mins, though they are not profitable. But all of a sudden we cannot remove the employment and all. So as a social obligation we are running many mins for providing employment or Social Security or To provide some CSR or whatever it is. Still mines are under operation though they are not profitable or viable. So again now as far as the digitization is concerned and last two years back we have introduced DZ Coal with the help of assure that Where all operations are digitized, with the application of A&ML, we could optimize the utilization of every asset. And that helped in improving the productivity by 20%. And this digitization is again at same level as in Australia or in America. So these two countries where better standards are there. Particularly Australia where safety is very good and Also productivity is also better. Even American min’productivity is much more than Australia. Globally American minds are more productive. For example long wall in underound mining, in open costst mining dumper capacity they are going up to 320 ton capacity also. So that way they are there but we are also in some of the mins at par with them. remaining mines are small mines and we can’t go for more digitization or that way. but we have identified some gaps, we have set some standards. Global benchmarking minds we have taken up and what is being implemented there and what is the present condition In Coal India we have identified the gaps and we are trying to bridge those gaps in a planned way. That’s being done, I think I have answered.

Sandeep Pai: Right, right. Yeah no this is great. thank you so much and thank you also for explaining the whole context. let’s dive into the topic of today’s discussion which is about the role of state owned enterprises as it’s called globally or PSUs public sector undertakings as it is commonly referred to in India. So I mean obviously the importance of state owned enterprises in the energy transition cannot be overstated. I mean so’control fossil fuel production their use and like you were saying like they provide so many jobs and there’s a huge welfare mandate for local communities as well. and you know outside North America and Europe it’s basically state owned enterprises in the energy landscape. So what as a big picture question I just wanted to understand what do you think would be the role of state owned enterprises or PSUs in the energy transition as the energy landscape itself is changing now more renewables are coming up India’s net zero target. So what role do you think broadly not particularly coal India but so’in general can play in the energy transition

Dr. B. Vera Reddy: This public sector undertakings PSUs and so’in India play a crucial role in the country’s energy transition by leading the shift towards renewable energy sources and diversifying their portfolios away from fossil fuels and utilizing their large financial and operational capacity to invest in clean energy technologies thus contributing significantly to India’s decarbonization goals while managing the transition process for a just outcome for workers and communities impacted by the shift away from coal based power industries. So in this some key points in India’s energy transitions about PSU is that investment in renewables is very high. Major PSUs like NTPC and NHPC, NLC and coal India are Actively investing in solar, wind and hydropower projects Expanding their renewable energy capacity to meet India’s growing clean energy demands. Particularly NLC Navvelliignite Corporation lignite is also one form of coal. presently they have one point 5 gigawatt of renewable energy including wind power and that is the PSI PSU to cross 1 GW renewable energy navignite and sereanei we have about 300 megawatt installed renewable energy capacity. And Coal India also presently 122megawatt installed as on date. But they have the plans to commission 3 gigawatt by 20,627 to get that net zero target for coal India. So again diverse question from coal again it is a big thing that for example Coal India again it’s a big infrastructure and a lot many people involved in it. lot many social responsibilities Also wherever mine is there, there hospitals are there, schools are there funded by Coal India. So again keeping all this in the view and diversification is taken UP by Coal India/ly it is a environmental concern and also social responsibility. So to achieve any diversification target it is not an immediate thing. If you start now it will take minimum of 10 years to get some result. So that way PSUs are diversifying into number of things particularly Coal India, NTPC Renewable Energy or NLC they are going into peit head thermal power plants and also solar power, wind power then critical minerals then pumped storage power plants. So lot many diversification initiatives are taken up by the PSUs like grid infrastructure development for Power Grid Corporation of India then financial strength due to their large size government backing PSUs can access significant capital for investments in clean energy projects including research and development of new technologies and policy influence Also POS they can influence better related to energy transition by advocating for supportive regulations and incentives for renewable energy development and as I mentioned earlier social responsibility particularly all pus are taking care. And if you take coal India the cr spent was about 500 crores last year. Every year as production goes up the CSR expenditure also will go up. Every year Coal India alone is spending 500 crores. That means all FPS’Together there are more than 200 PASUs in the country including Maharatna, Naratna and many Ratna companies. And other than these categories also about 170 PUS s are there so thousands of crores of rupees being spent on CSR and really that is helping the local people in many aspects. The challenges being faced by the PHUs in energy transition particularly legacy coal assets many PS s have large investments in coal based industries maybe power plants are in working the mins and all making the transition to renew a complex process. So you can’t substitrate the Coal India annual income is about 1 50,000 crores but with diverse question Coal India is planning for at least 20% of revenue from diversification by 2930 so that way they have prepared plan and action is being taken. Similarly every company divers fine particularly fossil related industries because that coal has got or fossil fue has got limited life. So in the process by the time that is first out you have to have some alternative for continuing the employment and other obligations so that is one thing and also market competition. Now for example if you take Coal India we are entering into thermal power plant speit head and solar wind we are not experts in that. Coal India is having expertise in mining that is their core strength. Now with diversification even Analysis is going for nuclear power plant and that way hydrogen this thing. So there are so many things, even PSP is also that we don’t have any core competence in it. We have to compete in the market and so that is a major challenge. We have to train our people or we have to recruit the people laterally and so we have to compete with people then only anybody can survive also investing in new technologies that storage and battery storage and all that. So these are the some of the challenges in transition process. Overall PSU are critical players in India’s energy transition with the potential to drive significant change by leveraging their financial strength, existing infrastructure and policy influence to accelerate the adoption of clean energy technologies and ach the country’s climate goals.

Shreya Jai: thank you for this very detailed response you know just to give a kind of an understanding to our audience if you can explain how a typical Indian PSU function You know there is a kind of impression that any kind of change in a public sector company is very slow move moving and obviously because there are obligations you are stay owned then for listed entities it’s another set of challenge that they are answerable to their investors. So if you can tell you know what what are the different types of functionings in an Indian PSUs and most importantly how autonomous is actually the Board of a PSU in India.

Dr. B. Vera Reddy: In India is a company where the government holds a majority stake at least 51%. essentially it is controlled by the central or state government and operates commercially on its behalf. Depending on their performance PS are categorized into different types like Maharatna, Navaratna and many Ratna. Maharatna being the highest level where they net worth and also their profits are very high. Navaratna just below Maharatna and many Rana is small companies but they are making profits for last three years and they have defined what should be the profit for last three years what should be the net worth. Baseding on that they have classified companies into these three categories and each company, any government company headed by the board okay CMD is there but ultimately CMD is also responsible answerable to the board. Again in the board there are government nominated directors in addition to independent directors. So in the board I think any addition will be taken transparently because a lot of money is there, public money is there. So you can get all the transparency or proptitions from the board because that board to composition is apart from that company representatives we have independent directors also from with different backgrounds and also government nominee directors also. So you get more freedom that Maharatna company can take a addition on its own up to certain extent like 15 percent of their net worth they can invest so that way there are some guidelines. So when you come to Maharatna they have highest freedom and Navaratna little lesser than Maharatna and Minir Ratna being small companies they have to take permission from the government for any small proposal. So these are the different companies and when we compare with private companies as private companies are basically meant for getting profit or optimizing everything and it is owned by private person and mostly owned by families and whoever is the owner he will take the immedation and that is there. But at the same time the pus can take a holistic decision in the interest of nation keeping the people and everything in the view. And it is peces are not meant for profit alone but it is for the whole development of the nation particularly the society, people and community and all. So this is about pus particularly this PSUs are there in energy particularly oil, gas and power generation infrastructure, railway and ports and coal and Mines So that way these portfolios are headed by the PSCs which are critical to the nation.

Sandeep Pai: Right? This is great. Actually this is a very good precursor for my next question which is like like we were discussing how the energy landscape is changing completely and PSUs are also and you explained very nicely how different PSUs, NLC Coal India and TPC different PSUs are trying to diversify their businesses as well. I mean my first question is because PSUs have so much obligation beyond their core core business and profit is not the only criteria. Like is it easy to diversify a psu? I mean it must have so many challenges. So would love to understand what are the main challenges and they can be technical challenges, they can be like soft challenges like mindset I don’t know. So what are the main challenges in your experience? Not even pointing to a particular company but what are the main challenges for SOEs or PSUs to diversify their business into clean energy?

Dr. B. Vera Reddy: they face several challenges when diversifying into clean energy including high initial investment costs, lack of expertise in new technologies, bureaucratic hurdles, grid integration complexities, existing fossil fuel infrastructure dependence, political pressure to maintain traditional energy sources and competition from private players in the renewable energy market all while navigating the need to ensure affordability and energy security for the population. So some key challenges are financial constraints, high capital expenditure. Switching to clean energy often requires significant upfront investments in solar panels, wind turbines and energy to storage systems which can be a major financial burden for PS Especially when transitioning from established fossil fuel operations limited access to low cost financing. Securing affordable financing for clean energy projects can be difficult due to the pursived higher risk associated with renewable energy resources or any diversification initiative. Technical challenges like lack of expertise. Many PSEs s may not have the necessary technical knowledge and experience to effectively develop and operate clean energy projects requiring significant skill developments that because that is not the core strength. All these years for decades they were working on coal mines and they were digging down and excavating the ob and taking out coal and connected missionry connected this thing. They are conversgent with that. Now all of a sudden they have to enter into new field which was not there early year so they have to develop. Fortunately within India a lot many people are available maybe clean energy exports and the companies are recruiting the export people so that way that preparing themselves for this clean energy but it is taking some time then greatid indeation issues for Example now we have renewable energy when you see the installed capacity of power within India about 4 40 gigawatt installed it is there about 51% fossil fuel based. Out of that 46% is coal based and remaining is renewable that is about about 48 or 47 it is coming including that hydro, wind even nuclear also 1.5 it is there. So that way and also with 46% installed coal generation capacity the electricity generation was about 73 to 75% last year and in this year also and only 23 to 24% from the renewable energy sources though installed capacity is high because they are seasonal they are not stable. So again with the increase of renewable energy how that can be integrated with grid system and you need to have some base load you can’t keep on increasing renewable energy the total grid may collapse also. So these kind of technical challenges are there energy storage limitations also. Now unless that is established it is very difficult to depend on renewable energy. So now some developments are there but not to the desired level. Still it has to go up and the required battery storage capacity has to be developed and established. Then only we can completely depend on renewable energy. So till the time basel load has to be maintained with coal based power generation. And these are the some of the challenges. Lack of exportise grid integration issues energy storage limitations and all and policy and regulatory hurdles. Complex regulatory landscape. Navigating the evolving regulatory framework for renewable energy including permitting processes grid access tooles can be challenging for pos. These are the challenges but the government is coming up with some proactive policies and regulations and also in Indian system political pressure is also very important and that is also to be handled and market competition. Private sector is already it is there in renewable energy or in critical minerals or even whatever diversification initiative is there they are ahead of PSUs and definitely their efficiency is better than because they can takeion immediately and monitoring it when you compare working hours or other things. Also it is very difficult to compete with the private sector but PSUs have no option unless they compete with private sector and survive otherwise they can’t survive also so they have to compete with and also on P is for example coal is coal pricing coal India can take a addition on coal pricing but once you increase the coal pricing power cost will go up and that will be passed on to public. So government will not accept it. So coal has to be sold out on notified price. But private people now with commercial mining and all so they are allowed to sell their coal at any price or export coal or whatever they can do, they can do. But PSU has got the responsibility to take care of the national interest and government control on it also. So in the interest of the nation. So these are the some of the challenges for diversification land equation issues also there for clean energy we need lot of land. For megawatt we need 2 hectares of land and for 3 gigawatt of coal India target so hundreds of hectors of land is required and again acquiring land is very challenging particularly in jar and some of the states land records are not available a lot many things are there. So environmental impact assessment also for everything now there is a procedure we have to comply to that potential solutions could be that government support providing financial incentives, streamlined regulatory frameworks and targeted capacity building programs for PSU transitioning to clean energy technology partnerships particularly collaborating with private sector players and technology providers to access advanced renewable energy technologies and expertise. Skill development also strategic planning, developing comprehensive diversification plans with clear timelines and targets for transitioning into clean energy. So this is about challenges and their possible solutions and all.

Shreya Jai: Yeah, I would now want you to address this question from the lens that PSUs are also corporate entities you mentioned and that’s a very important point that PSUs carry the weight of national interest. they have the larger picture in mind there where most of the decisions that the board takes or the company takes is for the national interest. Profit maximization like a private entity is not the ultimate goal. But for so many years state owned entities involved in fossil fuel sectors such as coal India, NTPC have their revenue, supply chain etc. Imagined around coal or thermal. So not only are you share, not only are you reimagining the whole business, you’re also looking at new modes of revenue and they might not be as same as fossil fuel. So just from the angle of a corporate entity, how much sense it makes for a coal India or an NTPC or an LLC to go beyond its core areas into this new segment. And what kind of a scope do you think there is? Would it offer the same amount of revenue less and when.

Dr. B. Vera Reddy: Yeah there is a lot of scope for diversification. they can go now already there into renewable energy, critical minerals extraction, technology based services, infrastructure development, healthcare and even Entering into new market geographically leveraging their existing expertise and government support to tap into emerging sectors with high growth potential. already we discussed about this in energy sector but clearly renewable energy and I explained you that already this 3 PSUs, 2 PSUs and 1 SOE. The synchrony Allge Co. Ltd. Navvel lignite and Coal India put together they have about 1.8 gigawatt renewable energy capacity and by 2930 about 8 gigawatt renewable energy is planned by navaliignite and 5 gigawatt by coal India and about 500 to 600 megawatt by singhrani. So that way about 12 to 13 gigawatt renewable energy will be installed by 2930 by these three coal companies. And green hydrogen production is also one. Not much has taken place on this Coal India is going to start it is working on it but other companies there there is some progress energy storage solutions also this is one thing particularly PS have to do a lot of R and D and find out solutions for this storage and particularly mining and minerals again mining and minerals. Now even NTPC into coal mining and they are doing better with their exportise and all all this they’re going to touch about 100 million ton shortly in coal India now critical minerals. Now seriously for last 23 years they are working on it and recently they had one mou m with Argentina and also Australian company for lithium mineral and also within the country also we are looking for critical mineral assets. Recently one block in Majha Pradesh graphite black coal India has acquired it and also looking for some more blocks within the country also. And the minerals and mining is again mining companies core strength it is their pore strength and they can go for it without any problem. And also mineral processing and value addition for example coal if you look at any country the global practice is that you get rockol from mine and that will be washed on the pith head then only that will be utilized. When you wash the coal that unwanted material will be removed and to that extent transport also reduced and you are not burning the waste material that way you are protecting the environment. Also now in India also now recently in Ministry of Coal also oneation has been taken discussed that to go for waseries so that we can enhance the quality of coal and we can reduce the transport of wastage burning of wastage so that way processing of coal or washing of coal that is the thrust area for coal India and also processing of other minerals wherever if you start working on bauxite there also you need smelter plant and all bauxide to alumina, alumina to aluminum so these processing plants also to be set up instead of giving it to some other party that is another diversification initiative and also it is not being done so far that cybersurity solutions data analytics and a applications but some of the companies they started doing it developing these cybersurity solutions and AI applications for all the processes including mining and then infrastructure development like smart city projects, urban transport systems, healthcare and all. So these are the some of the diversification initiatives and when you see these coal companies globally maybe Rot Tinto or BHP or Anglo Coal these are all again they are diversifying that they are in mining reducing the coal production and going into non coal mining activities like maybe gold or lithium or they into other minerals not whole so that way they are successful. Those examples are also studied before deciding on diversification in coal India and after studying all global experiences only codiaa condition for critical minerals and diversification and identified some areas for diversification.

Sandeep Pai: Sir, I am just very very fascinating. Thank you for explaining. I have just kind of three questions but some of them are quite short. The first question I have is like know some companies like NTPC started their diversification 1012 years back. We had Mr. Mohit Bhargav who was NTPC Green CEO so he explained that the journey actually started in 20102011 and it took some time but then by 201617 NTPC was quite ready I think in coal India and correct me if I’m wrong, I could be wrong this story started in the 2020s 20202021 with creation of business development division and all that. So I’m m just wondering how did it come about? Like what is the story? Like was it a board decision, ministry decision if you can shed some light on that and the second particular question I have is like why is a company like Coal India just thinking about you know energy to energy like whether it’s critical minerals or solar Cor India has so many guest houses, hospitals can you not get into for example hospitality like what the private companies do. So these are two different but connected questions related to diversification.

Dr. B. Vera Reddy: Soipji Just. I’ll answer your second question. First that coal India volume of business now okay hospitality also big thing and other things that health care and all that. But again Our competence is mining and coal. India is having about 2 la 21 thousand hectares of land. And after decoling we have a lot of land. So whatever resources we have we have to utilize them properly. So renewable energy, solar power which needs lot of land and All that now vacant land decod land is being utilized for solar power. And also when you close the mine always some portion will be there which will be filled with water. There we can go for floating solar power plants and pumpu storage power plant. That means that you will have to dig inside and finally you will be leaving some depression point where water will be there and adjacent to that you will be piling up this orbard and dump and all to the height of about 80 to 90 meters. So we have identified 24 such areas for PSP application and that is given to consultancy Tata Consultancy limited for preparing feasibility report and all they have submitted feasibility reported and now technically they are re suitable but financial evolution is also being done. So what I’m trying to say is that now our target is to get 20% of our revenue to get it by 2930 we have planned something like 2935 gigawatt solar power 3 gigawatt is net zero target that will be achieved by 2728 and by 2935 gigawatt and similarly pit head thermal power plants and similarly critical minerals. So these three are the major things. Apart from this we also already are there into that fertilizer business TFL Cultulture Fertilizers limited Hu URL. So we are JV partner in that With ntpc, iocl, Gail and all. They are all JV partners in that fertilizer side. So wherever the top line is more or where we can generate more revenue like 20% to Achie that target. so that way these things are identified. And also one thing you told that Whatever land is available we have some land parcel within the township urban area. Now we are commercializing them. We have constituted a one committees and there is al for utilizing the idele land persons particularly commercial value and all so that also where commercializing and get some money from that. And we have Actually the quarterots accommodation and all I think 15 years back, 20 years back the manpower was about 5 to 6 lakhs in coal India. Now that has come down to 2 lakh 10,000 or 20,000. So quarters were constructed for fiveach people. They are all lying idle. So whether that can be revived and then can be h to some people or that way you now things are going on that also they are doing simultaneously.

Sandeep Pai: Yeah the first question was about like why coal India decided to diversify in the first place. But more than why how it came about I think why you explained previously but how it came about.

Dr. B. Vera Reddy: Again. Yeah we have no option that coal has got limited life and two or three decades as per present projections and all by that time we need to have same revenue or considerable revenue so that we can continue with present manpower or all social responsibilities and all that with the global commitments particularly this environmental concerns. And it was a necessity that divers question was a necessity particularly going for cleaner energy and going for low carbon processes and in that regard there were some global commitments and also national commitments to align with those commitments. Government of India has given mandate to all the public sector companies that net zero target by what time each individual company can achieve and how they are going to achie and diversification. Also this again critical minerals cannot be separated from clean coal technologies because all that minerals are required for solar and wind power hardware the components. So that way that is the mandate given to PSUs. Accordingly they have prepared action plan and that’s why they have done it. So the solar though they are not experts or wind power also they are not experts but to align with national commitments and also to address this environmental concerns this diversification initiative is taken up particularly more on critical minerals and renewable energy.

Shreya Jai: Yeah sure. sorry, just one last question to maybe wrap things up given that you know you have served in so many companies across so many different supply chains of the coal sector, you know how would you Advise the newer PSUs who are looking to diversify and this is not just true for PSUs which are in the fossil fuel sector. We are seeing infra companies railway companies diversifying and having their own energy transition plan. So what according to you are the keys to plan a very efficient transition plan?

Dr. B. Vera Reddy: I experience in this diversification process.

Shreya Jai: Maybe just a bit of free advice.

Sandeep Pai: I think what we are asking is like if imagine a board of a new PSU that today decides to diversify. What would be your advice to that board of a new PSU or a PSU that is just decided today to diversify. It’s like a fun question. So what your advice would be.

Dr. B. Vera Reddy: Diversification means okay one is that Whether it is renewable energy or critical minerals it is completely outsourced. Only thing that management and Hiring some Experienced people and Even Colal India also not doing on its own anything that even our own core activities are outsourced. So only thing that We have to consult the experts in that particular field and Accordingly some action plan is to be prepared. And They have to do market study. They have to do market study before identifying the diversifications. And they how to study the different models. And all after doing all this Coal India takenation that is relevant to Coal India particularly critical minerals and renewable energy. And Pithead thermal power plant again that is related to coal. And another important thing is that Clean coal technology like coal gasification, coal bed methane. So these are also Under diversification particular clean coal technologies. More thrust is given by Coal India. If you consider some other company with the background of Maybe power generation. Then what they have to look at like renewable energy already NTPC is the best example. And now nuclear power now in government of India probably within a week or ten days one document will be released on mission 100 gigawatt nuclear power. So they’re preparing a document and that will be coming out shortly that Enhancing the nuclear power and all. So that is also renewable energy completely nuclear power. And that is relevant to power sectors. And Already they are into that distribution, transmission, everything. So that way what they can do is that forward integration or Backward integration. Any company related to them they can start with those things and after getting confidence and all they can expand to Depending upon their skill expertise and availability of resources and market study and government policies on that. So that way I think They can take addition accordingly suiting their conditions. Like Coal India because we have maximum land and all where we can go for renewable energy. We have more manpower so that can be utilized for the diversification initiatives. And particularly these critical minerals. We have that expertise and preed thermal power plants because we supply coal and all. So we know that what are the mines they have more life like 30 years life equivalent to power plant life that way so that way where you have complete information and associated with those things, you can take up those things immediately and you can start with.

Shreya Jai: Thank you so much for this. I’m sure our listeners and I hope the PSUs are listening to some of this advice. But your experience alone and whatever you said during this one hour long conversation is lesson enough and I clearly learnt a lot. I am m sure it’s the same for sundaydeep. So, so I want to thank you again for coming here, taking out time and discussing in so much depth, these issues which are so important, not just for the country, but for India’s as we are calling them, the temples of modern India, in Nehru’s words. but thank you again. Thank you so much.

Sandeep Pai: And Dr. Reddy, thank you so much from my side as well.

Dr. B. Vera Reddy: Thank you. Thank you Sandeepji. Thank you madam. Thank you.

[end]

[Podcast outro]

Thank you for listening to The India Energy Hour! Subscribe to this channel to never miss an update. To drop us a feedback, visit our website or write to us at [email protected]

We are on Twitter. You can follow @tieh_podcast and get in touch with 2 hosts @shreya_jai and @sandeeppaii

[end]