19NOVEMBER, 2025In an interaction with Industry Outlook, Prasanna Kumar Motupalli, Chairman and Managing Director, NLC India shared his views on the key advantages of using lignite over other fossil fuels like coal and natural gas in India, how lignite contributes to reducing India's dependence on imported energy sources, and how it enhances the country's energy security and more.INDUSTRY INSIGHTSTHE ROLE OF LIGNITE IN INDIA'S ENERGY SECURITYCould you provide an overview of the current landscape of lignite production and usage in India? How significant is lignite in India's overall energy mix?Lignite deposits in India are primarily located in the tertiary sediments in the Southern & Western parts of the peninsular shield, particularly in Tamil Nadu, Puducherry, Gujarat, Rajasthan, and Jammu & Kashmir. Lignite is also in minor quantities in Odisha, Kerala & West Bengal. The production of lignite is 44.990 MT in 2022-23. Tamil Nadu accounted for 49.97 percent of the production, followed by Gujarat at 27.37 percent, and Rajasthan at 22.67 percent.Tamil Nadu accounts for about 82 percent of India's lignite reserves of 40.9 billion tonnes. Tamil Nadu has lignite reserves of 33,309.53 million tonnes. At present, only a small percentage of the total lignite reserves have been exploited. There is considerable scope for their exploitation and use of lignite in thermal power stations subject to cost economics, particularly in Tamil Nadu, Rajasthan, and Gujarat, which have limitations in the transportation of coal.In terms of dispatch of lignite, Tamil Nadu had the highest share of 24.166 MT or 51.61 percent, followed by Gujarat at 26.27 percent, and Rajasthan at 22.12 percent. Tamil Nadu's lignite production stood at 23.635 MT in 2021-22, followed by 18.026 MT in 2020-21.Most lignite is used in boilers to generate electricity. However, small amounts are used in agriculture, in industry, and even, as a jet, in jewelry. Lignite fly ash produced by the combustion of lignite in power plants may also be valuable as a soil amendment and fertilizer.Lignite may also be used for the cultivation and distribution of biological control microbes that suppress plant pests. Reaction with quaternary amine forms a product called amine-treated lignite (ATL), which is used in drilling mud to reduce fluid loss during drilling.In India, the total installed generation capacity (MW) is 6,620 MW. This accounts for 1.6 percent of the total installed generation capacity. About 4000 MW of lignite-based power plants are in various planning and construction stages.Given the current landscape, what are the key advantages of using lignite over other fossil fuels like coal and natural gas in India?Lignite is generally used for the generation of electricity. Across the world, when you consider the worldwide statistics, around 75 percent of lignite produced is used for power production, and around 12-13 percent is used for gasification. This lignite is not only used in agriculture to improve the quality of the land but is also used as a gem in pieces of jewelry.Lignite-based power plants are pit head plants and generally avoid the transportation cost of fuel. This makes the power generated from Lignite relatively cheaper. Lignite-based power plants generate electricity at a cost significantly below that of all coal and natural gas power plants nationwide. Even though the calorific value of Lignite is less, the landed cost of lignite is less compared in terms of other fossil fuels. Considering less transportation involved, the environmental impact caused is also less. Hence, Lignite has advantages over coal and natural gas in terms of cost & environmental impact.Furthermore, the adoption of Circulating Fluidized Bed Combustion technology for lignite was possible due to its lower Calorific value. This helps in avoiding the generation of undesirable emissions like SOx & NOx from combustion. Prasanna Kumar MotupalliChairman & Managing DirectorPrasanna Kumar Motupalli, Chairman & Managing Director, NLC India
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