Contents 25 Wind energy to see ramp-up in FY20 & FY21 27 Spot thermal coal offers decline on Chinese import restrictions 28 Seaborne coking coal market quiet amid low liquidity 29 India’s September coal imports up 13% y-o-y 30 Coal India Oct production up 7.86% y-o-y 31 SCCL’s October production up 30.44% y-o-y 32 Sept sponge iron production down y-o-y, m-o-m 33 Power capacity addition in Sept at 30 MW 34 India’s Sept cement production up 12% y-o-y 35 Higher power demand boosts short-term power tariffs 36 Financial health of Europe utilities improving: study 38 Traffic handled by major ports up 5% in April-October 39 Indian Railways’ Oct coal handling up 9% y-o-y 40 CoalMin rules out Independent External Monitors to resolve dispute 41 Let there be light 43 Epiroc bullish on India 57 US coal production estimated to drop 4% in 2019 58 Corporate 59 E-auction 60 Port data
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6 | COVER STORY Sunrise delayed?
22 | COVER INTERVIEW
The solar energy segment is being singed by low tariffs, squeezed margins, low private investment and banks wary of funding such projects
Rooftop solar needs mass involvement Roof-top solar is a neglected area, as a result, only 1,600 MW has been achieved against 40,000 MW, says solar expert S P Gon Chaudhuri
46 | interview
Coal miners to fuel growth in mining equipment biz Current fiscal is likely to see purchases, says Sharad Thussu, VP, Voltas, MCE Division
49 | interview
Prakash Transport eyes bigger play in coal transport Co aims to expand coal movement portfolio from 1.5 lakh tons to 5 lakh tons in 4-5 years
51 | InterNATIONAL
Will India, China find a place in the sun at COP24? The pivotal climate conference would be held in the heart of Poland’s coal region, in a move that has angered some campaigners
Cover Story
Sunrise delayed? The solar energy segment is being singed by tariffs that scrape the bottom of the barrel, squeezed margins, low private sector investment, banks wary of funding and inadequate policy support Madhumita Mookerji
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tanding at the end of calendar 2018, can we say there has been an unexpected twist in the solar story? Is it showing signs of a slowdown after a few ra-ra years? Are installations facing lack of bank closures due to the absence of power purchase agreements? Are rock-bottom tariffs squeezing margins so sharply that investments are not pouring in? Indeed, the pace has begun to slacken if figures are any proof, bringing about a lull in the renewables wind. Solar installations
6 Coal Insights, November 2018
have halved from 3 GW in the first quarter of 2017-18 to 1.6 GW in the second quarter of 2018-19. Solar capacity installations in the country are at 25,000 MW, or one-fourth of the 2022 target of 100,000 MW, according to Mercom India research. As of July, the Indian Wind Turbine Manufacturers Association pegged the operating wind capacity at 34,393 MW, or about 57 percent of the 60,000 MW target set by the government for the five-year period.
“Yes, it has definitely slowed down. Even two years back, people were very upbeat. I feel this sector will experience even further slowdown if the several barriers impeding its growth are not removed,� stresses Prof (Dr) S P Gon Chaudhuri, Member, Tripura State Planning Board and a well-known renewables expert when Coal Insights approached him. However, the story had been positive even a year back. In fact, the scene over the past decade had seemed quite bright
Cover Story with installations of renewable energy for electricity growing at an annual rate of 25 percent. These reached 30,000 MW as of January 2014 and during this period, wind power installations expanded 10-fold and solar energy from nil to around 2,500 MW. In 2015, renewable energy accounted for about 12 percent of the total electricity generation capacity and contributed about 6 percent of the electricity produced in the country. And, reports indicated that the country added, between April 2017 and March 2018, around 11,788 megawatts (MW) of renewable energy capacity, which was more than double the 5,400 MW of capacity additions seen in the thermal and hydro power sectors during the same period, impelling many thermal coal analysts to sit up and take note of the strides being taken by renewables. But, after about a year or so of record expansion, do the diversion of a national clean-energy cess to subsidise the Goods and Service Tax-induced losses and a new import duty to protect domestic manufacturers of solar equipment threaten to derail India’s ambitious 2022 target? There seems to be many a slip between the solar cup and lip, the last mile before romping home to light up bulbs through the sun seems to have extended a tad beyond. Consequently, India’s much-hyped 10GW solar auctions hit a roadblock. The state-run Solar Energy Corporation of India’s (SECI)’s tender bids for 10 GW of inter-state transmission system (ISTS)connected solar photovoltaic (PV) power projects linked with 3 GW (per annum) solar manufacturing capacity, was extended to October 12. According to the tender trajectory issued by the Ministry of New and Renewable Energy (MNRE), approximately 30 GW is expected to be tendered in financial year 2018-19. Some time back in the recent past, Harsh Vardhan, the Minister of Science & Technology, Ministry of Environment, Forest and Climate Change and Ministry of Earth Sciences, while emphasising on the need to transform the ongoing solar energy progress in India into a social movement, said the country would meet its renewables target of 175 GW, including 100 GW of solar, before the stipulated time frame of 2022. The minister recently said at a function in Kolkata, “We have set an ambitious target for generation of clean energy, including
solar, and the Centre has been working towards its goal. The solar energy progress has started becoming a social movement. The country will meet its renewable target before the stipulated time,” he said, emphasising on harnessing of more technology and innovations that are emerging in the solar energy field. It may be recalled that The Pandit Jawaharlal Nehru National Solar Mission, later also known as the National Solar Mission, had been an initiative of the Government of India and state governments to promote solar power. The mission was one of the several initiatives that had been part of the National Action Plan on Climate Change and had been inaugurated by former Prime Minister Manmohan Singh on January 11, 2010 with a target of 20 gigawatt (GW) by 2022 which was later increased to 100 GW by the Narendra Modi government in the 2015 Union Budget of India. In line with India’s climate change commitments and domestic pollution concerns, India’s was one of the world’s largest programmes to expand its renewables capabilities to 175 gigawatt by 2022, which means tripling of capacities over the next three financial years or so. India increased its solar power generation capacity by nearly 5 times from 2,650 MW on May 26, 2014 to 12,288.83 MW on March 31, 2017. The country added 5,525.98 MW in 2016-17, the highest in any year. The government ‘s target by 2022, as fixed by the present Prime Minister of India, was 100,000 megawatt (MW) of solar energy and 75,000 MW of other renewables, which makes it a total of 1.75 lakh MW. Within the 100,000 MW of solar power generation target, there is a division – land-based solar and roof-top solar power. The share of landbased solar power generation is targeted to touch 60,000 MW within the time frame of 2022 and the balance 40,000 MW through roof-top solar installations. Strangly, earlier this year, the renewables target was further enhanced to 227 GW (within 2022), with a question mark hanging over achieving the previous targets. “But the slowdown trend seems to have started in the last one year or so, since the tariffs nosedived,” corroborates a source. So, are there some issues the government is overlooking? India missed its yearly renewable expansion targets since 2016. No more than 29 percent of the clean energy cess, which is
a major source of funding renewables in the country, has been spent over six years, with `56,700 crore diverted in 2017 to subsidise GST losses. Moreover, there is talk of a new import duty on solar modules from China, Taiwan and Malaysia which, although it would prop up the domestic manufacturers, threatens to increase production costs. Not to speak of the record low solar tariffs. Barriers to growth
Now, we may ask, is 1.75 GW a realistic target? “I would say this target is achievable. However, it can only be achieved when there are one), conducive government polices to aid this growth, and two), the barriers to achievement of the targets are gradually brought down. Only then can the 2022 targets can be met. Otherwise not,” emphasizes Gon Chaudhuri to Coal Insights. He adds: “Till the end of calendar 2018, we do not see an appreciable achievement – it is, well, close to 25,000 MW. That means we have to go a long way. In three years, by 202122, we have to achieve those huge targets.” According to Gon Chaudhuri, there are several barriers that have cropped up in the solar power generation sector which are hindering its growth. Rock-bottom tariffs: One is from the cost standpoint. Solar power tariffs have become very cheap over the last year. It may be recalled that solar tariffs had touched `2.44 per unit for the first time in May 2017 at a Solar Energy Corporation of India (SECI) auction of 500 MW at the Bhadla Solar Park in Rajasthan, but thereafter, as per reports, tariffs have been steadily rising as the cost of solar panels – mostly imported from China – have increased. “Tariffs have come down from `18 a unit to `2.50 per unit because the solar energy movement has been unprecedented. We have to transform the solar initiatives into a social movement,” Harsh Vardhan said on the sidelines of an event on Solar Entrepreneurship and Innovations, organised by the NB Institute for Rural Technology and Vikram Solar with the support of the Department of Science and Technology. But industry stalwart Prof Gon Chaudhuri says, “However, I do not know whether that cheap tariff is a realistic one or not. You see, the tariffs had hit such a rock-bottom level of `2.44 per kwh that the
Coal Insights, November 2018
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Cover Story
Rooftop solar needs mass involvement
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oof-top solar is a neglected area in India as a result of which only around mere 1,600 MW has been achieved against the 2022 target of 40,000 MW. Though power generation through this avenue is allowed in most other parts of India, this policy has not received adequate publicity in the country. Public involvement in roof-top solar is a must, Prof (Dr) S P Gon Chaudhuri, Member, Tripura State Planning Board, tells Madhumita Mookerji. Excerpts from an interview:
The target, as fixed by the Prime Minister of India was 100,000 megawatt (MW) of solar power generation and 75,000 MW of other renewables by 2022, which makes it a total of 1.75 lakh MW. Is this achievable within the next 3 years or so?
22 Coal Insights, November 2018
I would say this target is achievable. However, the target can only be achieved when there are one, conducive government polices to aid this growth, and two, the barriers to achievement of the targets are gradually brought down. Only then can
the 2022 targets can be met. Otherwise not. The barriers are the rock-bottom solar tariffs, banks reluctance to fund projects and inadequate state-level policies that dissuade
INTERVIEW
Prakash Transport eyes bigger play in coal transport
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ogistics play a key role in dry bulk cargo segments like coal, iron ore, refractories, ferro alloys and other materials. Odishabased Prakash Transport Corporation, which is a large player in the road transportation of coal, iron ore and other raw materials, is looking to expand its coal movement portfolio from the present 1.5 lakh tons to 5 lakh tons in 4-5 years, Sujeet Arya, Managing Partner of the company, tells Coal Insights. The company serves clients like Tata Steel, Jindal Steel & Power, RINL Vizag in steel and is also transporting coal from the ports of Visakhapatnam and Gangavaram at present. Excerpts from an interview:
Tell us about your company. What sort of transport logistics is it involved in? What dry bulk materials does it transport? Prakash Transport Corporation (PTC) was founded by the late Krishan Kumar Arya, a visionary known for his business acumen, way back in 1968. Since the last
50 years, the company has been attempting to achieve milestones, while staying true to its motto of customer satisfaction. It is aiming to become the strongest network in the state of Odisha and the country in terms of steel transportation logistics, offering a variety of products and, in the process, it is
developing and sprucing up the company’s infrastructure. With its headquarters in Cuttack, Odisha, Prakash Transport has expanded into 29 branches across the country and we have a strong network and connections in Odisha, West Bengal, Andhra Pradesh,
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INTERNATIONAL
Will India, China find a place in the sun at COP24? Kingshuk Banerjee
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his year’s United Nations Climate Conference could be a landmark one for the global coal industry as well. While coal is a crucial energy mix for India and China, the world’s two leading energy spenders, the US on its part too is gearing up for the coal lobby. So after Paris, the centre of attention would be shifted to Katowice, the Polish coal town, in 2018.
The 24th Conference of the Parties to the United Nations Framework Convention on Climate Change or COP24 would be held in Katowice in December. The pivotal 2018 UN climate conference would be held in the heart of Poland’s coal mining industry, in a move that has angered some campaigners but offered others hope that it symbolises transition away from fossil fuels. The coal town of Katowice – founded on coal mining – is in the heart of the Upper
Silesian coal basin and plays host to one of the European mining industry’s biggest trade fairs. Ironically, the choice of town was announced by the United Nations Framework Convention on Climate Change (UNFCCC) on the day US President Donald Trump was on the verge on quitting the Paris Climate agreement. This year’s talks in Katowice are intended to hammer out a rule book to the 2015 Paris agreement on climate change, which set a
Coal Insights, November 2018
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Tear along the dotted line
Tear along the dotted line