The Energy Coordination Committee guides government policies on energy. Chaired by the prime minister, the committee comprises Union Ministers of Finance, Power, Petroleum & Natural Gas, Coal and Non-Conventional Energy Sources, the deputy chairman and member (Energy) of the Planning Commission, hairman of the Economic Advisory Council to the prime minister, National Security Advisor, Cabinet Secretary and the Principal Secretary to Prime Minister. The principal secretary convenes the committee. The Prime Minister’s Office and the Planning Commission lead the committee providing all the necessary data and other requirements.

The committee is entrusted to establish key initiatives to encourage economic development, energy security and energy efficiency and suggest ways to implement the policies. It also monitors vulnerabilities to energy security.

The committee was set up in 2005. After liberalization of the Indian economy in 1991, India needed to address energy demand and energy security. The committee was founded to establish and implement a unified cross-ministerial energy policy.

India’s energy sector is extremely complex and the country’s energy policy requires interaction between various ministries and bodies. About 70% of India’s energy requirements are met through fossil fuels, with coal accounting for 40%, followed by petroleum and natural gas at 24% and 6% respectively.  Almost 80% of India’s oil consumption is met through imports. Generation of India’s electricity is hindered by shortages in coal and natural gas. As a result, there is a growing dependence on imported coal and natural gas. Since the country’s continued economic growth depends on the developing domestic energy resources and importing energy, key policy initiatives need to be taken involving various ministries and planning bodies. While energy security is a concern for the government, there are other associated issues of environmental sustainability, energy conservation, energy efficiency, privatization, regulation and technological upgrades that are also becoming increasingly crucial.

The coal ministry initiates policies regarding coal but it requires coordination with the ministries of environment, power, railways, labor, steel, shipping and state governments. Mainly the ministry of petroleum and natural gas adopts policies regarding oil and gas but the policies need to be coordinated with the ministries of power, industry and commerce and the various state governments. Among all energy sectors, nuclear energy is the only sector that is still entirely in the domain of the public sector because of security issues. But the nuclear energy policies, adopted mainly by the Atomic Energy Commission, need to be coordinated with the department of science and technology as well as the foreign ministry and the National Security Council. There are various regulatory bodies in the power, oil and gas and coal sectors that need to coordinate to form an integrated energy policy. The Energy Coordination Committee has been formed for this purpose.

India has been experimenting with various mechanisms for implementing such a coordinated strategy starting with the advisory board on energy that was set up in the early 1980s, to having an integrated energy ministry with a single cabinet-level minister (supported by a bureaucracy representing each energy sub-sector). None of these were successful. Finally, the Energy Coordination Committee was set up under the chairmanship of the prime minister.

One of the first initiatives of the Energy Coordination Committee was to entrust the Planning Commission to formulate an Integrated Energy Policy. The commission drafted the policy in 2006; the government adopted it in 2008. The policy addresses all aspects of energy use and supply including energy security, access and availability, affordability and pricing, as well as efficiency and environmental concerns. It provides a broad overreaching framework for guiding the policies governing the production and use of different forms of energy from various sources. All energy policies initiated either by various ministries since then have been within the overall framework of the Integrated Energy Policy.

The Energy Coordination Committee meets periodically to make important decisions on regulators of the energy sub-sectors, coal mining policies, fuel supplies for power, pricing of energy products and so on.

The committee believes that each energy sub-sector should have a regulator. While the Petroleum and Natural Gas Regulatory Board has already been formed, the committee has recently proposed a regulator for coal prices. Power generators, particularly the largest thermal power generator in the country, National Thermal Power Corporation, have demanded intervention of the committee to decide policies regarding coal and gas supplies. The power sector is serviced by the Central Electricity Regulatory Commission and the State Electricity Regulatory Commissions.

The committee is deliberating over the policy of involving private coal miners to undertake coal mining on behalf of the state-run Coal India. If approved, the policy would amount to partial privatization of the coal sector which is now almost a government monopoly.

The committee, in the early years of its formation, was also actively involved in the captive coal mining policies and the awards of captive coal blocks to power plants and industries.

The committee is handicapped by the lack of an agency to collect data and conduct research on the energy sector. It has to depend entirely on the data provided by the energy cell of the Planning Commission. As a result, it has often come out with data that have anomalies. For example, there is a 15% discrepancy between the data on coal usage estimated by Central Electricity Authority and that reported by the Planning Commission’s low carbon expert group.

Child Labor in Mines
The constitution of India ensures that no child below the age of 14 is allowed to work, especially in a job as hazardous as coal mining. However, use of child labor is a major problem in coalmines, where the coal mafia routinely traffics children from Nepal, Bangladesh and Assam. According to the NGO Impulse Network, based in the Northeastern state of Meghalaya, over 70,000 children work in mines in that state’s Jauntier Hills District alone. The issue is made more difficult to police by that fact that state is poorly governed, suffers from subpar infrastructure, and is remote so rescuing kids from the mine is difficult.

Meghalaya: Brave Heart Fights Against Child Labour in Coal Mines (by Arijit Sen, CNN IBN)
India's Child Coal Miners (by Daniel Etter, Christian Science Monitor)
Indian Child Miners Unaffected by Labour Laws (by Julien Bouissou, Guardian Weekly)

Captive Coal Block Allocation

The Comptroller of Auditor General in August 2012 tabled a performance report in the Parliament stating that the committee acted in undue haste, particularly in the years between 2006 to 2009, to allocate captive coal mines although the need for competitive bidding had been under consideration since 2004. The ECC approved coal block allocation in 2006 a few days before the law ministry gave its opinion that coal blocks can be auctioned. Subsequently, a large number of coal blocks were allocated over the next couple of years.

CAG found that much of the coal block allocation was opaque. Besides, CAG pointed out that during the 11th Five-Year-Plan period (2007-12), 86 captive coalmines were supposed to begin production. Ultimately only 28, of which 15 were private, came online. The prime minister also held the Coal Ministry portfolio during this period. The delay in introducing competitive bidding, according to CAG, has denied the government exchequer of Rs. 1,860 billion ($34.56 billion USD).

In 2007, the prime minister on the ECC’s recommendation allocated 18 Coal India blocks without a public auction. These blocks remain idle.

The Coal Mines (Nationalization) Act allowed power, steel and cement companies to apply for captive coal blocks. The screening and linkage committees allocated coalmines with inputs from other ministries. The ECC, working under the PMO, felt political pressure from Congress’ UPA coalition partners.

 The states and trade unions vehemently protest the auction of coal blocks through competitive bidding. 

The bidding norms for captive coalmines were finally announced in February 2012 but two issues remain. First, mines for power plants would not be auctioned since power plants themselves go through competitive bidding processes. Second, without a coal regulator, there is no decision-maker for competitive bidding.  

A Messy Business (by Kandula Subramaniam, Outlook Magazine)

Manmohan Singh Government Apparently Acted In Undue Haste In Allocating Coal Blocks (by Javed M. Ansari & Mayur Shekhar Jha, India Today)

PMO Deferred Coal Auction Policy: CAG (by Aditi Tandon, The Tribune)

Improve Power Distribution

The performance of the power distribution sector has been an area of concern since many years. The commercial performance of the power sector depends largely on the distribution sector; hence, it is important to improve the performance of distribution sector in the country. Many states have initiated steps to improve the commercial performance of their power utilities; however, the progress has been very slow. Unbundling of state utilities, setting up independent regulatory authorities, controlling theft and transmission losses are some of the steps taken by the government at the Centre and State level. Considering the slow progress, the Centre is taking measures to give these measures a boost.

India’s Transmission and Distribution Utilities – It's Time To Transform (by Ritesh Pothan, Renewable Energy Magazine)

The Future Is Black: Power Is Essential For India’s Long-Term Growth. But Electricity Is Unlikely To Flow Fast Enough (The Economist)

A Smarter Grid for India (by Alex Yu Zheng, Smart Grid News)

Should India Allow Private Investment in Coal Mining?

The Coal Mines Nationalization Amendment Bill 2000 aimed to open up coal mining to private investment. In May 2012, the present government, on the ECC’s recommendation, announced that it would amend the Coal Mines (Nationalization) Act, 1973 to allow both private and public Indian companies to mine coal in the country without the existing restriction of captive mining.

For Privatization of Coal Mining

The government believes that India’s domestic coal supply of coal falling short of demand can be addressed if coal mining is privatized so that there can be also players other than Coal India and its subsidiaries in the sector. 

Privatise Coal India to Improve Production: FICCI (Economic Times)

Plan Panel Pitches for Privatisation of Coal Mining (Press Trust of India)

Against Privatization of Coal Mining

The opponents point out to the fact that the first attempt at privatization through captive coal block allocation was unsuccessful, as a large number of allocated mines remain undeveloped even though almost 90% of the allocated mines went to private players. Also, opponents feel that if Coal India were weakened through the privatization process, India’s import dependence for coal would increase leading to increased current account deficits.

Coalgate Should Be Used To Reverse Privatization Of Minerals: CPM (India Today)

Should a Coal Price Regulator be Appointed?

The Group of Ministers and the ECC have proposed that a coal regulator should be appointed to determine the mechanism for pooling of imported and domestic price of coal for end-users. This issue becomes particularly important in the context of the Prime Minister’s directive for Coal India to sign Fuel Supply Agreement with users of coal, particularly the power companies.

For Giving Pricing Power to the Coal Regulator

The move will restrict Coal India’s say in fixing the pooled price and will benefit power companies which are facing severe coal shortages from the domestic market and skyrocketing import prices. The proponents of the coal price regulator insist that the power to fix power should not be available to the monopoly producer.

Coal Regulator To Have Pricing Power (By Sudheer Pal Singh, Business Standard)

Against Giving Pricing Power to the Coal Regulator

Coal India and the Coal Ministry vociferously protest the move, as it would infringe on its authority. The primary functions of the regulatory should be to monitor production by the mines.

Proposed Coal Regulator May Get Power to Fix Prices (by Priyadarshi Siddhanta, The Hindu)