CCAI Newsletter Dec-21

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Vol. L No. 09 Published on : 28.12.2021

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From the Editor’s Desk

Amid the soaring coal demand in the country’s rejuvenated Power Sector and the outcry over paucity of supply to the Industries wh ich has critically impacted their daily operation s, India’s production of the much-coveted dry fuel is expected to take a leap with increased output ma inly from Coal India and captive mines. Acc ording to senior officials of CIL , captive coal blocks auctioned between 20 15 and 2020 and commercia l mines put on sale last year would cause the pace of production to hit new strides.

As per the estimation by the Ministry and the coal behem oth, CIL is expected to produce around 680 MT in the next fiscal wh ile the captive coal blocks are expected to dig out around 120 MT more in FY 2021-22.

If the evaluation is correct, Ind ia would have an adequate cus hion of 10% more coal offtake despite the normal trend of 5% hike in pow er demand.

The unprecedented power dem and across the country in 20 21 and the subsequent coal shortage in the Non-regulated sector had brought a number of industries to a grin ding halt and had a severe impact on the SMEs, resulting in increased prices of finished products.

To ensure that the consumers do not have to face the brunt this year as well, several initiatives have been taken up including sanctioning of Rs 15, 000 crore for rapid loading systems and Coal Handling Plants (CHPs) for 35 largest mines of CIL.

Singareni Collieries Company Limited (SCCL), the second larg est entity in the country after CIL is also working out ways to continu e in the upward trajectory in terms of coal pro duction and offtake as the com pany aims at 100 million tonnes coal produc tion by 2025. Though frequen t price hike

by SCCL has concern among st its customers.

The urgency and seriousness of the Indian coal outfits are both justified and understandable as the cou ntry will require base load cap acity of coalbased generation for stability and energy security in the nea r future.

Despite India’s commitment to transition to cleaner energy in the Paris agreement as well as COP2 6 held in Glasgow last year, the situation is to be viewed in the light of national circumstances. So it can be safely said that Coal will remain king in India, in spite of the gov ernment’s continuous push for renewa ble energy in order to achieve its Net-zero emissions target.

As per the International Ene rgy Agency's Coal Report rele ased in 2021, India’s coal consumption is like ly to increase at an average annual rate of nearly 4% to 1.18 billion tonne in 2024, on the back of a GD P growth rate of 7.4% between 2022 and 2024 and the dry fuel sector will cer tainly play a major role in the adv ancing of India’s economy.

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CONTENT Vol. L No. 09 December 2021

Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy.

4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 E-mail : sec.ccai@gmail.com Website : www.ccai.co.in

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Consumers' Page

12

Power

18

Domestic

24

Global

Editor : Subhasri Nandi Annual Subscription Rs. 400/(including postage) MO/DD to be made in favour of “Coal Consumers’ Association of India” CCAI do not necessarily share or support the views expressed in this Publication.

30 Monthly Summary Of

Imported Coal &Petcoke

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Production And Offtake Performance Of Cil And Subsidiary Companies

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CONSUMERS’ PAGE Issues faced by both Power and NRS Consumers: 1. Submission to SECL regarding immediate processing of various forms of pending refund: Consumers from Non-power Sector are struggling due to non-release of Performance Security BG and Financial Coverage BG amount worth crores of rupees submitted by them to SECL even after termination of their respective FSAs. BG amounts are not refunded to consumers even after fulfilling their part of FSA obligations including lifting of coal against DOs/ Rail programs issued against their MSQs during the three months notice period.

Power Sector Consumers too have significant

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amounts pending with SECL for many months in terms of refund of credit notes against shortsupply of coal via Road mode and on account of grade slippage.

Request has been made to SECL and CIL to immediately process various forms of pending refunds to both Power and NRS consumers. .

Issues faced exclusively by Power Sector Consumers: 2. Submission by Power sector regarding significant grade slippage in coal supplied via Rail Mode from ECL, NCL, CCL: Power sector procuring coal from various CIL

Subsidiaries such as ECL, NCL, CCL are facing significant grade slippage in coal supplied via rail mode during August-October period in 2021.For instance, *Coal supplied from ECL’s POCP, Bankola, Sonepur Bazari sidings during that period have been been 3-4 grade lower than the declared grades, while in a few rakes grade slippage has been as high as 7 grades. *Coal supplied from NCL’s Dudhichua, Dudhichua WW, Bina WW, Block-B sidings have been have been 2-3 grade lower than the declared grades during that period. *Coal supplied from CCL’s Birds Sounda, Churi sidings for those three months have been 2- 3 grade lower than the declared grades, while in a few rakes grade slippage has been as high as 5 grades.

Such consistent and significant grade slippage substantially increases the cost of generation for the power plants which directly impacts power tariff.

Request has been made to CIL and the respective Subsidiary Coal Companies to take adequate steps in order to eradicate grade slippage and ensure supply of FSA-grade of coal to the Power Sector consumers at the earliest possible. Also, re-gradation of certain mines may be considered where the cases of grade variation are rampant.

3. Submission by Power consumers regarding impediments of coal transport through RcR mode: Owing to soaring coal demand in the Power Sector, Coal India Limited has allowed supply of coal to the Utilities through Road-cum-Rail (RcR) mode as and when supply through Rail mode is not sufficient to meet the required demand of coal. However, the consumers are facing various impediments while carrying coal from pitheads to the railway good shed. *Supply of coal through RcR mode is an inter-

mittent supply arrangement for the Power Sector for a relatively smaller quantity. Therefore, the number of interested bidders is significantly less. This causes the rate for loading and transportation of coal to be significantly higher than the long-term contract awarded by Coal Companies for the same area. *Utilities are facing substantial time lag between the issuance of DOs and starting of supply of coal from pithead to Railway good sheds due to formalities such as obtaining mining permit, truck permit etc. Getting permission of the transit storage is time consuming due to internal formalities such as getting clearance from the pollution control board etc. *In RcR mode, Power sector and Industries are asked to procure the allocated quantities from the same source. As road loading points function with a fixed capacity, deployment of number of trucks per consumer gets drastically reduced. Also, movement of trucks is only allowed for a fixed period (6 am-6 pm). *The Railway good sheds handle both inward traffic and outward traffic. Therefore, till the evacuation of the inward traffic, stacking and loading of coal in rakes for outward traffic cannot be alloed which causes significant delay in loading.

Request has been made to the Ministry of Coal and CIL to ensure that consumer-wise allocation of coal quantity may be commensurate with the loading capacity as per available infrastructure of a particular road loading point to avoid congestion at mine end. Rational allocation of good sheds / private sidings based on booked quantity is also requested.

4. Submission by Power Sector to expedite release of e-Auction rakes: There is extremely low materialization of rakes allotted under e-Auctions including Special Forward e-Auction for Power Sector and rakes allotted under the same e-Auction scheme are pending since long. Most of the rakes being

CCAI Monthly Newsletter December 2021

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loaded are FSA rakes. As a result, there is huge pendency of e-Auction rakes especially from MCL and SECL. More than 600 rakes are pending from these two CIL Subsidiaries.

Irregular liquidation of e-Auction rakes does not allow the daily requirement of the Utilities to be fulfilled as the demand of coal has been soaring. On the other hand, it is also causing the working capital of consumers to be stuck for long period.

Request has been made to Ministry of Coal, CIL, CEA and the Railway Board so that 15% - 20% of the total supply of rakes / day may be earmarked and supplied against e-Auction quantities in tandem with FSA (Linkage auction) rake as this would enable the Power houses to build up their stock levels.

5. Submission by Power Sector regarding significant short-receipt in rakes from various sidings of SECL: Power Sector consumers procuring coal from various collieries of SECL such as Burhar, , Churcha, Naurajabad sidings are facing shortreceipt of nearly 4% in almost all the rakes supplied from these areas while amount of shortsupply has increased to nearly 4%-7% in rakes supplied from the Subsidiary’s Bhatgaon, Rajnagar OC, Katora, NCPH sidings under Central India Coalfields (CIC) Such significant loss of quantity due to shortreceipt of coal leads to huge financial loss for the Power Plants and subsequently causes the power tariff to go up.

Request has been made to CIL and SECL to take adequate steps including weighment of empties, recalibration of weighbridges in these areas etc to eradicate the issue of short-receipt of coal.

7. Request by Power Sector for reimbursement of idle freight on account of short-lifting alongwith GST:

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While certain Subsidiary Coal Companies (CCL, NCL & ECL) are providing refund of idle freight alongwith GST components charged by the Railways, SECL, MCL and WCL are not reimbursing the GST amount during refund of idle freight. As the Generators are paying freight charges to the Railways with GST, non-refund of this amount is leading to significant financial losses to these Utilities.

CIL has been requested to intervene so that all the CIL Subsidiaries reimburse the idle freights for underloading alongwith the GST amount.

Issues faced exclusively by NRS Consumers:.

7. Request for improving coal supply via Rail mode for Non-regulated Sector: This dismal coal supply situation to the NRS consumers started around August/ September of 2021 and became further arduous since then as coal stock at many plants plunged below critical level. The condition had shown signs of improvement during November ’21. But the coal supply has again been affected since December ’21 due to renewed demand at the power sector for building coal stock.

At present, coal rake supplies to the Industries are less than 50% of the coal secured through Linkages and e-Auctions. Also, there is a huge pendency of rakes for the Non-power Sector (over 4500) from most of the CIL Subsidiaries.

Supply via Road mode is also affected and reduced as Power Sector is allowed to procure coal via RcR mode. Replacing the domestic demand with imported coal is also unviable due to its high price and high ocean freight rates.

Request has been made to the Ministry of Coal, Commerce & Industries, Steel, Power and Railways, Coal India Limited and the Railway Board to that a specific quantity (minimum 15% of total coal dispatch by Rail mode) may be earmarked for the Non-regulated sector even during the high power demand scenario in order to

CCAI CCAI CCAI Monthly CCAI Monthly CCAI CCAI Monthly Monthly Monthly Monthly Newsletter Newsletter Newsletter Newsletter Newsletter Newsletter September November December August June April May July 2021 2019 2020

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safeguard a portion of supply-commitment to the Industries.

8. Request for consideration of CEA norms in determining normative coal requirement for CPP sub-sector in Tranche-V NRS Linkage Auction: As per coal consumption norms laid down by CEA for CPP Sector, certain factors needs to be considered for calculating normative coal requirement including loss of heat value of coal for storage @85 KCal/kg, 5% GCV loss due to the difference between GCV (ARB) and GCV (EQ) and 0.8% transit loss. However, these factors are not considered in the calculation of normative coal requirements as given in the scheme document of CIL. As a result, the Captive Power Plants will be eligible for less quantity of coal in comparison to their actual coal requirement in the upcoming NRS Linkage Auction.

Request has been made to CIL so that normative requirement of coal in the CIL scheme document for NRS linkage auction for the different capacity Captive Power Plants may be calculated as per existing CEA guidelines.

9. Submission by NRS consumers to allow inter-plant transfer of coal: Certain plants from the Non-regulated Sector are often facing constraints due to restrictions on rake allocations and of coal movement via Road and RCR modes for Non-regulated Sector.

Also, coal stock at some plants remain alarmingly low due to lack of production/transport issues at the designated mines which eventually

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hampers the plant operations.

Submission has been given to the Ministry of coal to allow interplant transfer of coal within the same company/business group (within different units of the same organisation) for higher capacity plants in the Non-Power Sector in line with the Power Sector as it would ensure maximum lifting of booked Linkage/Exclusive e-Auction quantities, reduce dependence on imported coal and encourage the NRS consumers to go for more long-term Linkage/Exclusive Auction security.

10. Request for incorporating new guidelines for accepting FC BG by the Subsidiaries in the CIL Scheme Document of Linkage Auction: CIL’s modified guidelines of June 2020, financial coverage for coal supplies through FSAs under linkage auction and Exclusive Auctions to NRS consumers and under Special Forward e-Auction Schemes to Power sector had been reduced from as delivered price of coal for 30 days supplies to as delivered price of coal for 10 days supplies.

However, SECL is still asking for financial coverage equivalent to 30 days coal value as per previous practice from its customers as the new modality of accepting financial coverage has not been updated in the scheme document so far.

Request has been made to CIL to make necessary amendment in the scheme document in this regard so that so that NRS consumers of SECL may submit FC BG as per the modified CIL guidelines.

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POWER Power demand rises 10% in AprilNovember, coal keeps pace India’s power demand, a key indicator of economic growth, jumped more than 10% in the April-November period of the current financial year, indicating a strong recovery.

Government data shows coal-fired generation meeting 71% of the demand, making it clear that black diamond will continue to occupy the centre stage amid rapid growth in power demand.

Consider: all sources put together generated 978 billion units (BU) during the period under review, while coal-fired plants accounted for 696 BUs.

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Indeed, coal-fired plants stepped up generation by 14% to bridge the gap left by a 28% fall in output from stations running on imported coal and 43% from imported gas as a sharp rise in their prices made them uneconomical for cashstrapped distribution companies.

Coal India’s production has registered a 5.6% growth dispatch rose 19% in the April-November period compared to the same period of last year. Production from captive mines rose nearly 56%.

Power ministry working on resource adequacy plan guidelines The Union Power ministry was working on resource adequacy plan guidelines to ensure

24x7 power supply to the consumers, a senior official said..

The ministry was also discussing some bigger reforms to make discoms viable and was working on steps like de-regulating the sector or making regulation adaptability more industry friendly, the official said.

Resource adequacy is the ability of a utilities' reliable capacity resources (supply) to meet the customers' energy or system loads (demands) at all hours The factor that affects supply is the availability of sufficient dispatchable capacity resources in order to meet the demand.

A focus on 24x7 power can be ensured if discoms properly have resource adequacy in place. There are a few private players who are working in this direction. Working on resource adequacy plan guidelines so that discoms can be integrated at the state level and then more at national level. The advantage will be lesser resource requirement

It was reiterated that improved financial sustainability of the discoms will not only attract investments in the power sector as a whole but will also benefit the consumers through reduced cost of electricity and improved consumer services.

In order to achieve the objective of providing 24x7 uninterrupted power supply to consumers, the Centre has recently launched the Revamped Distribution Sector Scheme having total outlay of 3 lakh crore

Power Ministry achieves 63.4% of capex target at 32,137 cr in FY22 The CPSEs of the Ministry of Power have so far achieved a CAPEX of 32,137 crore, which is 63.4 per cent of the annual the CAPEX target, the government said. The central public sector enterprises' (CPSEs) capital expenditure target for FY22 stands at 50,690.52 crore.

Power Minister urges States to be financially viable in view of high oustanding dues of gencos

FY 2020-21, power sector CPSEs incurred the CAPEX of 22,127 crore till November, which was 49.3 per cent of the total expenditure in that year.

Union Minister RK Singh has urged States to be financially viable in view of the mounting outstanding dues of power generation companies.

Even in the schemes for infrastructure development, the ministry said it has spent 1,593.72 crore in IPDS; 1007.51 crore in DDUGJY and ₹890 crore in transmission development schemes for the North Eastern region.

This will help attract investments in the power sector and also benefit the consumers through reduced cost of electricity and improved consumer services, he said.

Singh said, the country has become power surplus; we have connected the whole country into one grid, and strengthened the distribution system. These steps have increased the power availability to 22 hours in rural areas and 23.5 hours in urban areas. The next step is to take it to 24X7 guaranteed power supply at affordable price.

The matter of increasing overdues of power generation firms (gencos) was also deliberated and it was advised that distribution companies (discoms) must immediately undertake loss reduction measures through proper metering, billing and energy accounting.

"Hence, besides the expenditure of 32,137.37 crore by CPSEs, an additional amount of 3491.23 crore has been invested in infrastructure through development schemes of the ministry. In all, till the end of November, the power ministry has invested 35,628.6 crore in infrastructure development," it said.

61% of power plants to miss meeting their 2022 deadline on emission standards Sixty-one percent of the coal-based power plants located near million-plus population cities, which have to meet their emission standards by December 2022, will miss their deadlines, shows an analysis of three different CCAI Monthly Newsletter December 2021

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categories of power plants whose new targets to meet the green norms were set by the environment ministry early this year.

The power plants which have to meet the December next year target are those which are located within 10 km radius of the National Capital Region (NCR) or cities having millionplus population. There are 79 coal-based power plants in this category (Category A) as per a categorisation list of a task force, constituted by the Central Pollution Control Board (CPCB).

The task force, disaggregating 596 coal thermal power plants from across the country, had on December 13 released the list, putting 68 power plants in Category B (compliance deadline of December, 2023) and 449 in Category C (compliance deadline of December, 2024).

The analysis, done by the Centre for Science and Environment (CSE), shows that 48 of 79 power plants (61%) in Category A will miss their emission standards deadlines -- it means the non-compliant power plants will continue to emit pollutants more than their acceptable limits, polluting air in the million-plus population cities.

Coal units in 10 states asked to install anti-emission gear The government has asked 79 coal-based power plants totalling 20,500-MW near million plus cities in 10 states including Andhra Pradesh, Tamil Nadu, Gujarat and UP to install equipment to curb emission of poisonous sulphur dioxide and nitrogen dioxide gases, by this month end, while 517 others have been given timeline relaxations.

According to the revised categorisation of thermal power plants by the Central Pollution Control Board (CPCB), these 79 coal-fired power plants near populated and already polluted cities. Delhi, Chennai, Kota, Greater Mumbai, Nagpur, Visakhapatnam and Vijayawada have been marked in the Category-A of the new norms.

Projects in this category that fail to comply with the timeline will have to pay a penalty of 10 paise per unit of electricity generated upto 180 days of non-compliance, 15 paise between

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181 days to 365 days and 20 paise per unit after 366 days.

Sixty eight projects with 22 GW capacities have been classified in Category B which have to comply with the Flue-gas desulfurisation norms

by December 2023. Penalties for this category range between 7 paise per unit of electricity generated to 15 paise

52 coal-fired thermal projects in pipeline in India; lion’s share with TN Even though India is striving to cut down on its coal consumption, as many as 52 coal-based thermal projects are at various stages of commissioning across the country, with Tamil Nadu accounting for a major share. The state boasts of seven thermal projects while other states have between two and six thermal projects in the pipeline.

“Though the world may want India to lower burning of coal, the base power in the grid is as of now totally dependent on thermal power. Unless we change this and find an alternative to coal, India’s dependence on thermal power will not come down,” said former Union power secretary Anil Razdan.

There is not less than 5800MW of thermal coal power projects in the pipeline. Beyond North Chennai, other thermal projects planned in Udangudi and Ennore SEZ will take at least two to three years as only groundwork has been initiated in these units. Two units planned in Uppur in Ramanathapuram district have been changed to Udangudi and thus these two units with a capacity of 800MW each may see the light only after four to five years .Power

minister approves 23 new inter-state transmission projects worth Rs 15,893 cr Union power minister R K Singh has approved 23 new inter-state transmission system projects worth Rs 15,893 crore. The new inter-state transmission system (ISTS) projects comprise 13 projects with an estimated cost of Rs 14,766

crore to be developed under Tariff Based Competitive Bidding (TBCB) and 10 projects with an estimated cost of Rs 1,127 crore to be developed under Regulated Tariff Mechanism (RTM), a power ministry statement said.

It further said that the Union Minister of Power and New and Renewable Energy has approved new 23 ISTS projects "with an estimated cost of Rs 15,893 crore".

The new transmission projects would interalia facilitate evacuation system for 14 GW of renewable projects in Rajasthan, 4.5 GW of RE projects in Gujarat, 1 GW Neemuch Solar Park, Madhya Pradesh and feeding areas near Akhnoor and Jammu region by establishing Siot Substation in Jammu.

National Electricity Policy: Govt panel recommends tough norms to start new coal-based units In its recommendations concerning the National Electricity Policy (NEP), a panel constituted by the Union power ministry has highlighted the objective of ‘decarbonisation’ to cut carbon footprint in power generation and consumption.

The committee is said to have recommended that new coal-based power plants can be constructed to replace older units of similar capacities, only after “it is convincingly established that it is not viable to meet the projected demand from alternate non-fossil sources”. However, it acknowledged that “coal-based generation will continue to be needed to meet the base load and balancing requirements till commercially viable energy storage solutions are developed and available at scale”.

It has also suggested retrofitting existing coalbased power plants to make them more flexible, so that they can easily start up or shut down according to generation from solar and wind plants.

Higher use of technologies such as pumped hydropower plants, battery storage and other emerging technologies have also been recommended, which would address the issues of intermittency of electricity supply from renewable energy-based sources

Short-term power market to grow in coming days, says CERC Chairperson P K Pujari Share of the short-term electricity market will grow in future with lesser fructification of longterm power purchase agreements, Central Electricity Regulatory Commission (CERC) Chairperson P K Pujari said. In short-term market, consumers like captive users or discoms buy power either at energy exchanges or directly from generating firms (gencos) under open access. This is different from conventional PPAs where consumers buy electricity for a term as long as 25 years.

Pujari stated that currently the short-term market share ranges from 6-7 seven per cent which would grow in future.

In the dynamic power scenario where consumers have access to different short-term market products like real time market, day ahead market and term ahead market, among others.

Last year in June, real time market (RTM) was launched where consumers, including distribution companies (discoms) and captive users, can buy power on exchanges just an hour before delivery.

IEX power trade volume grew 54% to 9,477 MUs in November Electricity trade volume at Indian Energy Exchange (IEX) rose nearly 54 per cent year-onyear in November this year to 9,477 million units (MUs).

"The Indian Energy Exchange realized 9,477 MU cleared volume in November 2021 comprising 6,333 MU in the Conventional Power Market, 457 MU in the Green Power Market and 2687 MU in the Certificate Market comprising ESCerts and REC. Overall, the exchange realised 53.8 per cent YoY growth across all its market segments," an IEX statement said.

The Day-Ahead Market achieved 4,719 MU volume in November seeing a 3 per cent YoY decline. The average monthly price at Rs. 3.1 per unit saw a significant 62 per cent monthon-month (MoM) price reduction mainly due to CCAI Monthly Newsletter December 2021

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increased liquidity on the supply-side with the sell-bids at 1.8X of the cleared volume.

The Term-Ahead Market comprising intra-day, contingency, daily and weekly contracts traded 302.7 MU during the month and recorded 23.4 per cent YoY growth. The Real-time Electricity Market achieved 1311 MU volume seeing a significant 47 per cent YoY growth. The average monthly price was at Rs 3.48 per unit.

India’s clean energy got more loans than coal for third year Indian lenders channeled more funds to clean energy projects compared to coal-based ones for a third straight year in 2020 with more expected to flow into the renewables sector in the coming years after Prime Minister Narendra Modi unveiled ambitious goals last month for cutting emissions.

Clean energy projects got 74% of the total funds from financial institutions last year, or 243.8 billion rupees ($3 billion), according to a report

by New Delhi-based research organizations Climate Trends and Centre for Financial Accountability. That’s a 6% rise from 2019 approvals for clean energy projects of about 229.71 billion rupees in 2019.

Just 85.2 billion rupees, or 26% of the 2020 funds from Indian lenders went to coal-fired plants, data from the report showed. This represents an 86% slump in approvals for coal plants since 2017 and is in line with declining availability of funds globally for fossil-fuel projects.

This trend is expected to continue after Modi announced India’s plan for net zero emissions by 2070 at COP26. Modi also raised India’s 2030 target for low-emission energy capacity to 500 gigawatt from 450 GW and to wants the country to generate half its electricity using renewable energy.

India can potentially achieve 500 GW non-fossil fuel target A power ministry official said that the country can potentially achieve the 500 gigawatt (GW) non fossil fuel capacity before its stated deadline of 2030.

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According to a statement from the Union ministry of new and renewable energy, total non-fossil fuel based installed energy capacity was 156.83 GW, which is 40.1 per cent of the total installed electricity generation capacity of 390.8 GW. A target of 500 GW has now been set to be achieved by 2030.

The government has recently issued revised guidelines to thermal power generating companies to set up renewable capacities either by themselves or through developers and supply power to customers with existing power purchase agreements (PPAs). This will enable replacement of fossil fuels under existing PPAs. Moreover, the distribution companies will also be allowed to count the renewable energy supplied under the scheme towards renewable power purchase obligation.

The ministry is working on guidelines on resource adequacy that will allow better contingency planning in peak power months.

With 1 million square meters of commercial space and 3 million square meters of residential space coming up in the next few years, there would be a significant jump in the peak load of discoms due to cooling needs.

Adani agrees Indian solar deal with SECI Indian private-sector renewables firm Adani Green Energy (AGEL) has signed a deal with the state-controlled Solar Energy Corporation of India (SECI) to supply 4,667MW of renewable power generation capacity, as part of a manufacturing-linked solar tender first agreed in 2020.

AGEL has signed a power purchase agreement with SECI for a total generation capacity of close to 6,000MW of the 8,000MW awarded in June 2020, with the balance expected to be agreed on in the next 2-3 months.

India has 48,557MW of installed generation capacity for solar, according to the power ministry, while AGEL has 4,763MW of solar power capacity in operation and 10,080MW under construction. TotalEnergies has a 20pc

stake in AGEL, with an agreement to buy a 50pc stake in its operating solar assets.

India added about 11.1 GW of solar capacity from January to November 2021: Report India added about 11.1 GW of solar capacity from January 2021 till November 2021. This is about 249% higher compared to the installations done in 2020, according to a report by JMK Research.

In terms of cumulative installations, according to the data released by Ministry of New and Renewable Energy (MNRE), till November 2021, India’s RE installation capacity reached ~104 GW. Solar energy now contributes for approximately 47% share in the total RE segment now making it the largest contributor followed by wind energy (38%), Bio Power (10%) and Small Hydro (5%).

According to the report, during Jan-Nov 2021 period, about 7 GW of utility scale solar was added. Rajasthan added the highest utility scale solar capacity of about 3,615 MW, followed by Gujarat (1,538 MW) and Uttar Pradesh (674 MW).

In the rooftop solar segment, about 2605 MW of new capacity was added during January to November 2021 period.

UN's 'observer' status to ISA will aid OSOWOG: Minister R K Singh Union Minister R K Singh said granting of 'observer' status to the International Solar Alliance by the United Nations will give impetus to the One Sun One World One Grid(OSOWAG) initiative.

In a congratulatory tweet, the Power and New & Renewable Energy Minister said this historic decision of the UN is going to be a stepping stone in furtherance of the Prime Minister's vision of OSOWAG. This will provide a big boost to the initiative to

bring about just and equitable energy solutions through the deployment of solar energy, he further said.

Singh also highlighted that the decision would immensely help towards achieving the goal of net zero carbon emissions through global co-operations. He reaffirmed that India is progressively contributing to this mission by having a a significant share of renewable energy in the power mix.

PM Modi to launch Rs 11,281 crore hydro power projects in Shimla on 27 Dec Prime Minister Narendra Modi would dedicate and lay the foundation stone of development projects worth Rs 11,281 crore in Himachal Pradesh on December 27 on completion of four years tenure of the BJP government.

The projects to be dedicated include 111 MW Sawra-Kuddu Hydro Electric Project (HEP) constructed with an outlay of Rs 2,081.60 crore on river Pabbar in Shimla district. The project would generate 386 Million units of electricity per annum which will generate annual revenue of about Rs 120 crore to the state, a spokesperson of the state government said.

The Prime Minister would lay the foundation stone of Shri Renuka ji Dam project, a national project conceived as a storage project of Rs 6,700 crore on Giri river in Sirmaur. The project would generate 200 Million units of energy in a surface power house with 40 MW installed capacity which would be utilised by the state.

The live storage of the dam would be 498 Million Cubic Metres, which would fulfill about 40 per cent of the drinking water requirement of Delhi.

He would also lay the foundation stone of 210 MW Luhri Hydro Electric Project stage-I to be completed with an expenditure of Rs 1811 crore, a joint venture between Government of India and Government of Himachal Pradesh.

The project is located on Sutlej in Shimla and Kullu districts.

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DOMESTIC Coal: Leap in production, improved dispatches to stave off possible fuel shortages in 2022 The country's coal production is expected to record a "sizeable leap" in 2022 with increased output mainly from Coal India and captive mines, providing adequate firewall against any possible dry fuel shortages like the one witnessed in the latter half of this year.

While coal supplies have stabilised in recent times, efforts are on to further improve the fuel dispatches and a top government official said power plants are now receiving slightly more coal compared to their requirements.

Coal Secretary Anil Kumar Jain said the increase in coal output would be on account of more production from Coal India Ltd (CIL), cap-

18 | CCAI Monthly Newslette December 2021

tive coal blocks auctioned between 2015- 2020 and commercial mines put on sale last year.

In the last financial year, CIL dug out about 596 million tonnes (MT) of coal, he said, adding that in the ongoing fiscal, the output is likely to be upped to 640 MT. The captive coal mines that were put on sale post cancellation of blocks by the Supreme Court produced 63 MT last fiscal. In the current financial year, their production is likely to be scaled up to 90 MT.

Coal to stay as major source of energy in foreseeable future: Pralhad Joshi Coal will stay as a major source of energy in the foreseeable future as it is an affordable source

of energy with substantial reserve, Parliament was informed. Despite push for renewables, the country will require base load capacity of coalbased generation for stability and also for energy security, Coal Minister Pralhad Joshi said.

The pact calls upon parties to accelerate the development, deployment and dissemination of technologies, and the adoption of policies, to transition towards low emission energy systems, including by rapidly scaling up the deployment of clean power generation, including accelerating efforts towards the phasedown of unabated coal power and phaseout of inefficient fossil fuel subsidies, he said.

It is evident the pact is not mandating the phasedown of coal power, and it is not setting any timelines for that, the minister noted.

Further, it is only 'calling upon' parties to accelerate efforts towards the phasedown of unabated coal power in line with national circumstances and recognising the need for support towards a just transition, the minister added.

Coal PSUs paid over Rs 33,479 crore as dividend in the current fiscal The Central Government has received Rs 3,668 crore from Coal India as dividend tranche, taking the total proceeds from dividend from PSUs to over Rs 33,479 crore for Financial Year 202122 so far. These figures were shared by Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey in a series of tweets on December 23, 2021.

In addition, the Government of India has also received Rs 21 crore, Rs 48 crore, Rs 69 crore and Rs 23 crore from Telecommunications India Ltd, IRCON, RITES and NIIFL as dividend tranches, he further added.

"Government has received about Rs 3668 crore from Coal India Ltd and Rs 21 crore from Telecommunications India Ltd as dividend tranches," he said in a twitter post.

"Government has respectively received about Rs 48 crore, Rs 69 crore and Rs 23 crore from IRCON, RITES and NIIFL as dividend tranches,"

he said on the microblogging site.

India's coal import declines 27% to 16 mn tonnes in October India's coal import registered a decline of 26.8 per cent to 15.75 million tonnes (MT) in October over the same month a year ago. The country had imported 21.50 MT of coal in October 2020, according to data compiled by mjunction services.

"India's coal and coke imports in October 2021 through the major and non-major ports are estimated to have decreased by 26.8 per cent over October 2020," it said. mjunction -- a joint venture between Tata Steel and SAIL -- is a B2B e-commerce company and also publishes research reports on coal and steel verticals.

However, coal import in October was up 6 per cent as compared to 14.85 MT imported during September 2021, the data show. Of the total import in October 2021, non-coking coal was at 9.47 MT, against 14.46 MT imported in October last year. Coking coal import was at 4.05 MT, lower than 4.92 MT imported in October 2020.

During the April-October period of the ongoing fiscal, total coal import stood at 123.09 MT, about 5.4 per cent higher than 116.81 MT in the year-ago period.

Coal India’s coal grades improve 64%in April-Oct Coal India Ltd’s emphasis on ensuring better quality coal supplies seems to be yielding results with the state-owned miner registering an improvement in grade conformity in coal supplies to 64 per cent during April-October 2021 as against 59 per cent during same period last year.

The improvement is based on an analysis conducted by independent third-party sampling agencies. Grade conformity refers to the supply of declared grade of coal and above it.

The improvement in coal grade conformity comes at a time when there have been contenCCAI Monthly Newsletter December 2021

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tions of fall in quality of coal supplies by a certain section of Coal India’s customers.

The notion that customers were not receiving the grade of coal that they pay for was misconceived, as no customer suffers financial loss arising out of quality mismatch between the declared dispatched grade and the analysed grade.

To allay apprehensions on quality issues, all Coal India customers can also opt for quality assessment of coal supplies through independent third-party sampling agencies (TPSA).

To strengthen analysis of coal supplied, Coal India has engaged two third-party sampling and testing agencies —COTECNA Inspection India and SGS India — in addition to the existing CSIR-CIMFR and Quality Council of India.

Further, the Ministry of Power has decided that Power Finance Corporation shall empanel TPS.

Commercial mining: 53 bids for 20 coal mines; Vedanta, Hindalco, JSW among bidders As many as 53 bids have been received from 37 companies, including JSW, Jindal Steel & Power Ltd (JSPL), Vedanta and Hindalco Industries, for 20 coal mines that have been put up for sale for commercial mining. The auction process of 88 mines for sale of coal was launched by the Ministry of Coal on October 12, according to an official statement.

Two of these mines are coking coal blocks and the remaining 18 mines are non-coking coal blocks. Two or more bids have been received for 10 coal mines, it said.

The last date of submission of technical bid was last week. As part of the auction process, technical bids comprising online and offline bid documents were opened this month in the presence of the bidders.

A total of 37 companies have submitted their bids both offline and online in the auction process. The other companies which also submitted their bids are BALCO, Jindal Power and Sunflag Iron & Steel among others.

20 | CCAI Monthly Newslette December 2021

The maximum of 12 bids were made for NamchikNamphuk coal block, followed by seven for Utkal C block, five for Bijahan mine among others.

After successful auction of 28 coal mines in the first two tranches, Ministry of Coal had in October launched the auction process of 40 new coal mines -- 21new mines under CM(SP) Act and 19 new mines under the tranche three of MMDR Act.

Coal Ministry intimates about revenue and employment generation via coal block auctioning The Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi in a written reply in Rajya Sabha stated that the ministry had appointed a Nominated Authority for the allocation of 204 cancelled coal blocks. Nominated Authority has appointed SBI Capital Capital Markets as Transaction Adviser through transparent bidding. Initially, in the First Round of the auction for commercial mining, 41 coal mines were offered. Later on, 6 mines were withdrawn and 3 mines were added taking the tally of coal mines offered in the First Round to 38.

In respect of the 41 coal mines initially offered in the First Round of auction, Transaction Adviser had undertaken an exercise to estimate the figures of creation of jobs and generation of revenue based on the estimated Peak Rated Capacities of the 41 coal mines.

Accordingly, it was estimated that for 1 MTPA of coal production, 1352 employment [Direct plus indirect] would be generated. The aggregate peak rated capacity of 41 coal mines offered in the First Round of the auction was approximately 226 MTPA and the estimated employment was calculated as approximately 3 lakhs.

In respect of a generation of revenue, it was estimated that approximately Rs.20,578 crore would accrue to coal-bearing State Governments considering production at aggregated

Peak Rate Capacity level of approximately 226 MTPA. This estimate was based on the taxes applicable on approximately 226 MTPA of coal produced viz. Royalty, District Mineral Fund, National Mineral Exploration Trust, etc.

SCCL aims at 100 million tonnes coal production by 2025 SCCL is aiming to attain annual production goal of 100 million tonnes by 2025 with a contribution of 10 million tonnes a 12 months from Naini block in Odisha from the subsequent monetary 12 months. A number of public sector undertakings have been began and a number of other have been closed attributable to losses over the past 100 years within the nation however SCCL goes up step by step.

Stating that the corporate is poised to make report income this (2021-22) 12 months, the CMD mentioned they’re going forward in direction of the goal of reaching 68 million tonnes production and 400 million cubic meters of overburden removing.

Besides, the corporate has plans to open 10 new mines within the subsequent three years and when the production reaches 100 million tonnes a 12 months, the turnover of the corporate could be within the vary of 30,000 crore to 40,000 crore a 12 months with some contribution from 1,200 megawatter thermal energy plant, 300 mw photo voltaic vegetation, 250 mw floating photo voltaic plant and others.

India co-chairs Steering Leadership Meeting of Global Methane Initiative A Steering Leadership meeting of Global Methane Initiative (GMI) has been held virtually in which the Additional Secretary, Ministry of Coal, Shri V.K. Tiwari as the Vice Chairman of this global initiative informed the participants about the work being carried out by India to mitigate the emission of methane.Emission of methane is a big concern as it is a greenhouse gas having 25-28 times harmful effect than carbon dioxide.

Global Methane Initiative(GMI) is a voluntary Government and an informal international

21 | CCAI Monthly Newsletter May 2021

partnership having members from 45 countries including the United States and Canada.

The forum has been created to achieve global reduction in anthropogenic methane emission through partnership among developed and developing countries having economies in transition.

The forum was created in 2004 and India is one of the members since its inception and has taken up Vice-Chairmanship for the first time in the Steering Leadership along with USA. The Chairperson of the Steering Leadership is from Canada.

Several decisions including holding of next round of meeting in near future were taken.

Both Canada and the US appreciated the actions taken by India in reducing and harnessing methane gas.

Second Of 7 Panamax Ships Carrying 66,000 Tons Of US Coal Arrives To Ukraine The second out of seven Panamax-class ships arrived to Ukraine carrying 66,000 tons of coal brought from the United States, DTEK Energy, Ukrainian strategic holding company that owns coal and natural gas production companies, said.

"The second Panamax-class ship arrived to Ukraine carrying American coal. The total volume of the second delivery is 66,000 tons," DTEK said in a statement published on its website.

The vessel was delivered to Ukraine within a framework of agreements between DTEK and international suppliers on the import of seven shiploads of coal from the United States and Colombia.

"Despite having faced challenges with availability and record energy prices on global markets, today we are welcoming the second ship with coal from the United States.

In the coming days, it will fill the reserves of our thermal power stations and will ensure the Ukrainian energy system will stay stable during CCAI Monthly Newsletter December 2021

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peak periods," DTEK Energy CEO Ildar Salieiev said.

The first vessel carrying US coal arrived to Ukraine on November 20. Three more shiploads are expected to arrive to Ukraine in December.

The total volume of coal that the country will be supplied with is around 470,000 tons.

STEEL

Govt may cut duty on steel, aluminium in Union budget The government may consider reducing import duties on products such as steel, aluminium, copper and polymers in the budget to provide relief to small and medium businesses, which have been hit hard by surging input costs, two people aware of the development said.

A broad understanding between the steel and finance ministries has been reached to review import duties on major metals and bring them down and, in some cases, withdraw them completely to help user industries, the people said, requesting anonymity.

An announcement on this is expected in the upcoming budget, they said.

The steel ministry did not respond to a query seeking comment, while a mail to the finance ministry didn’t elicit a reply.

The import duty on steel is 7.5%, while aluminium attracts 10% basic customs duty, copper 5% and polymers 10%. In addition, all the products also attract 18% integrated goods and services tax to offset local levies on the products.

Arcelor Mittal Nippon Steel’s Rs 1 lakh crore steel unit approved in Odisha’s Kendrapada The Naveen Patnaik government approved ArcelorMittal Nippon Steel India’s (AM/NS India)

22 | CCAI Monthly Newslette December 2021

proposal to set up a 24 MTPA integrated steel plant at Mahakalapada block in Kendrapada district at an investment of Rs 1 lakh crore.

High-Level Clearance Authority of the Govt of Odisha, under the leadership of CM Naveen Patnaik, gave its green signal to the mega project which is expected to create employment opportunities for 16,000 persons and indirect employment opportunities through ancillary and downstream industries and services.

The Odisha government said Arcelor Mitta Nippon Steel’s approved project of setting up a 24 MTPA integrated Steel plant in Odisha’s Kendrapara will be the largest project in the manufacturing sector in the country.

Besides, the plant is also expected to churn out 18.75 MT of cement annually, making it one of the biggest cement manufacturing facilities in the country and thereby, providing a boost to the infrastructure development in the region.

In addition to the Steel plant, the company will also be developing a downstream industry park to assist the MSMEs and helo import substitution. AMNS’ plant is expected to attract a plethora of auxiliary companies in the region to support the country’s biggest steel manufacturing unit, the Odisha government said.

Steel producers to benefit on account of raw material availability, says chairman, SAIL Steel trade in the global market will see a significant change with China cutting down production and the Chinese government withdrawing various support it provided to its steel industry.

“The Chinese government, which has been providing support to its steel industry in terms of various policies, recently has been withdrawing the same so as to ease the environmental concerns. The decision to cut down production has a tremendous impact on the input materials such as iron ore and coking coal. The demand for these are expected to come down and the prices will follow the path also,” Soma Mondal, chairman, SAIL said.

She said although Indian producers were not much dependent on iron ore inputs, international price movement of iron ore could have a “bearing on the domestic iron ore prices”.

Ukraine on November 20. Three more shiploads are expected to arrive to Ukraine in December.

The total volume of coal that the country will be supplied with is around 470,000 tons.

On the other hand, coking coal, imported in huge quantities, especially by the branded producers, would have improvement in availability down the line, correcting prices. This would help producers in sustaining margins and “steel trade in the international market will see a significant change”, Mondal said.

CEMENT

Coking coal prices surged from $100 per tonne to $ 400 per tonne but there has been some recent softening with prices coming down to $ 320 per tonne. Meanwhile, China’s total domestic steel output has been cut down by 21.4% year-on-year in October and China has been aggressively cutting down steel output during the second half of the fiscal.

Second Of 7 Panamax Ships Carrying 66,000 Tons Of US Coal Arrives To Ukraine The second out of seven Panamax-class ships arrived to Ukraine carrying 66,000 tons of coal brought from the United States, DTEK Energy, Ukrainian strategic holding company that owns coal and natural gas production companies, said.

"The second Panamax-class ship arrived to Ukraine carrying American coal. The total volume of the second delivery is 66,000 tons," DTEK said in a statement published on its website.

The vessel was delivered to Ukraine within a framework of agreements between DTEK and international suppliers on the import of seven shiploads of coal from the United States and Colombia.

In the coming days, it will fill the reserves of our thermal power stations and will ensure the Ukrainian energy system will stay stable during peak periods," DTEK Energy CEO Ildar Salieiev said.

The first vessel carrying US coal arrived to

Indian cement sales rise in first half of 2022 financial year Finance company ICRA reported all-India cement sales in the first half of the 2022 financial year of 124Mt, up by 22% year-on-year. Mint News has reported that the total value of cement sales rose by 5% in the period compared to the first half of the 2021 financial year. Producers’ raw materials costs rose by 16%, while power, coal and petcoke costs rose by 26% and freight costs rose by 7%. Granulated blast furnace slag (GBFS) and gypsum prices also rose.

ICRA corporate ratings assistant vice president and sector head Anupama Reddy said "Despite some easing in the cost-side pressures, the input costs are likely to remain elevated in the near term, and are expected to exert pressure on operating margins, which are likely to decline by 200 to 230 basis points (BPS) in the 2022 financial year as a whole.

While the capacity additions are expected to increase year-on-year in the 2022 financial year, the reliance on debt is likely to be lower owing to the healthy cash generation and strong liquidity of the cement companies. The debt coverage metrics are expected to remain strong in the 2022 financial year."

The current steel price is stable as Indian steel demand is good and improving month on month. “I, therefore, don’t see any structural reason for a price correction. On the contrary, the steel stocks levels are low across channels,” he said. “We are, however, supporting MSMEs (micro, small and medium enterprises) with a specific initiative via NSIC (National Small Industries Corporation) and hypermart.

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GLOBAL Worldwide demand for coal could hit all-time high in 2022 Coal power is on track to hit a new global record this year after an economic rebound that could drive worldwide coal demand to an all-time high in 2022, according to the International Energy Agency (IEA).

The amount of electricity generated from coal power plants has soared by nine per cent this year after a surge in fossil fuel demand to fuel the recovery from COVID-19 lockdowns, a report by the watchdog says.

Coal power fell by four per cent in 2020 as the pandemic caused a global economic slowdown,

24 | CCAI Monthly Newslette December 2021

but the IEA found that demand for electricity this year had outpaced the growth in low-carbon sources, leading many wealthy economies to rely more heavily on fossil fuel power plants.

The global gas supply crunch, which has caused record-high prices worldwide, has also helped reignite demand for coal, the IEA report says.

The agency found that global demand for coal, including cement and steelmaking, rose by six per cent overall this year. Although the total falls short of record levels of demand for the fuel in 2013 and 2014, the IEA warned that without a policy intervention that high could be surpassed next year.

Fatih Birol, the IEA executive director, said: “Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net-zero.

Major coal-producing countries push for sales to China China has been ramping up the production and transportation of coal, along with oil and gas as well as renewables, to cope with the winter peak season for electricity. China State Railway Group Co transported 118 million tons of thermal coal from November 1 to 26, up 34.6 percent year-on-year.

Multiple coal-producing countries are pushing for sales to China, the world’s largest coal buyer that has just overcome a power shortage a couple of months ago. Coal exporters in Russia, Indonesia and Mongolia are all taking steps to enhance cooperation with China now.

On Monday, 12 Chinese coal import enterprises signed the initial batch of medium- and longterm thermal coal supply contracts for 2022 with 12 coal export enterprises from Russia, Indonesia and Mongolia during the 2021 China Import-coal Summit held in Beijing.

The first batch of contracts is valued at $2.49 billion. Coal exporters in the three countries will supply 25.82 million tons of thermal coal to China.

Han Jianjun, an industry insider in Ordos City of North China’s Inner Mongolia Autonomous Region, told the Global Times that China’s overall coal import volume in 2020 was 300 million tons, and these contracts represent nearly 10 percent of the nation’s annual coal imports.

According to statistics from the General Administration of Customs released on December 7, China imported 292.3 million tons of coal in the first 11 months of 2021, a year-on-year increase of 10.64 percent.

Coal Use Is Reaching Record Levels In India And China

The International Energy Agency has called on China and India to reduce coal power generation and put their climate pledges into action, describing both countries as “holding the key to future coal demand”. The world’s two largest coal producers – with economies that account for nearly three billion people combined – are currently responsible for two-thirds of coal demand: the dirtiest form of energy.

Both countries were heavily criticised last month for watering down coal pledges at the COP26 climate summit, altering the phrasing of agreed plans to cut coal consumption from “phase out” to “phase down” over the next two decades.

The energy agency argues there is a disconnect between the commitments made by both countries, and their continued reliance on coal energy.

Keisuke Sadamori, director of energy markets and security, said: “The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action.”

Sadamori’s urgent criticism accompanied the IEA’s latest annual coal report, which gloomily revealed that coal power generation has soared to worldwide record levels this year..

Limited investments, climate pledge to keep Australian thermal coal prices high.

Australian thermal coal prices may remain relatively high until 2022-23, hit by a lack of investments on the back of recent climate commitments by several countries at the UN Climate Change Conference, a report by Australia’s Department of Industry, Science, Energy and Resources released Dec. 20 showed.

“Recent commitments by a range of countries have added to uncertainties over coal investment. This is likely to discourage a number of major investors from responding to the recent

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price surge, and contribute to a likelihood that thermal coal prices will remain relatively high,” the report showed. “By deterring investment, it is likely that recent announcements could place coal prices on a higher footing.”

Additionally, some proposed coal projects have recently been withdrawn or abandoned, including proposed mines at Dendrobium and the Bylong Valley, the department said in its December quarterly report. The proposed expansion at New Acland continues to face legal objections, with its owners closing the site in response to the depletion of available resources.

“Shenhua’s Watermark project has also been shelved,” the report, which comes via the office of the chief economist, said.

While the report noted there are other potential projects like that of the GVK Group, Waratah Coal’s Alpha North and Galilee projects and AMCI’s South Galilee Coal Project, there has yet to be any commitment registered for these projects.

China imposed an unofficial ban on Australian coal in November 2020 after the latter supported calls for an international investigation into China’s handling of the coronavirus outbreak earlier in the year

Australia’s Newcastle coal vessel queue passes 50 The vessel queue outside Australia's largest coal export facility at Newcastle in New South Wales (NSW) has increased to more than 50, despite an easing of weather conditions since the start of December.

There were 51 ships waiting outside Newcastle today, up from 37 at the start of December and from 14 at the beginning of November. This rapid increase to more than triple the average is despite generally better weather in December after heavy rainfall led to flooding in parts of the NSW coal regions in November. Queensland coal ports are also experiencing above average queues, with 39 vessels waiting outside the neighbouring ports of Hay Point and Dalrymple Bay and 38 outside of Gladstone.

26 | CCAI Monthly Newslette December 2021

Strong winds at Newcastle on 10 December disrupted shipments from both the Port Waratah Coal Services (PWCS) and Newcastle Coal Infrastructure Group (NCIG), adding to the vessel queue. NCIG had shipped under 1.5mn t of coal and PWCS under 3mn t in the first 11 days of December, according to initial shipping data collected by Argus. This puts the port on track to ship less than 13mn t in December, which could be up from 12.16mn t shipped in November but is insufficient to allow its 2021 exports to match those of 2020. Shipments often increase in the second half of December ahead of the end of the calendar year.

The Australian Bureau of Meteorology (BoM) is forecasting a reasonably calm week ahead for Newcastle, with winds of a maximum of 30 km/hr on 16 December compared with up to 63km/hr on 10 December, although there is a chance of thunderstorms during 18-19 December. Disruptive weather is to continue intermittently until February with the BoM calling a La Nina weather pattern, which usually brings increased rainfall and the chance of flooding to NSW.

Glencore to close three Australian coal mines Switzerland-based trading and mining firm Glencore will close three Australian coal mines when they reach the end of their formal mine lives by the end of 2023, with another awaiting approval to extend beyond 2023.

The firm will close the 5.5mn t/yr Newlands thermal and coking coal mine in the northern Bowen basin in Queensland next year and the 4.5mn t/yr Liddell semi-soft and thermal open pit coal mine and the 2mn t/yr Integra underground thermal coal mine in the Hunter Valley region of New South Wales (NSW) in 2023.

Its 3.7mn t/yr Glendell open pit thermal coal is also scheduled to close in 2023, but its mine life could be extended by 20 years if it is approved. Glencore submitted its plan to the NSW government in January 2020 to expand Glen-

dell to 10mn t/yr and to extend its lifespan by 20 years to 2044.

The four Australian mines that could reach the end of life by 2023 produced 11.79mn t of coal between them in 2020, down from 13.1mn t in 2019 and below a nominal capacity of 15.7mn t, according to Glencore's factsheet. The decline is partly due to Glencore's decision to cut Australian coal production in 2020 due to low prices.

Australia will not need coal-fired power by 2043, market operator predicts Australia can phase out coal-fired power by 2043 even as electricity demand soars, the energy market operator said on Friday in a draft plan for electricity investments that will be needed to achieve net zero carbon emissions by 2050.

The base case for the Australian Energy Market Operator's (AEMO) plan sees a rapid transformation of the National Electricity Market (NEM) with major investment in renewable generation, energy storage, back-up generation and transmission as coal plants are retired.

"In this scenario, the NEM will operate without coal generation by 2043," AEMO CEO Daniel Westerman said in a statement.

Separately, rooftop solar is expected to jump to 70 GW from 15 GW over the same period, AEMO said .Indonesia

coal benchmark prices set lower in December- official statement Indonesia's coal benchmark prices in December were set 25.7% lower compared to a month earlier, the energy ministry said in a statement on Wednesday.

Coal benchmark prices stood at $159.79 per tonne, compared to $215 in November.

The lower price was due to higher Chinese coal production, an energy ministry spokesman said in the statement.

Indonesia’s 2022 coal output is estimated at between 637 million to 664 million tonnes based on production plans currently being finalised, said Sunindyo Suryo Herdadi, a director at the Energy and Mineral Resources ministry.

The figure compared to an output target of 625 million tonnes this year. The domestic needs for coal next year was estimated at 190 million tonnes, Sunindyo said.

Fitch Ratings 2022 Outlook: Indonesian Coal Mining

"This requires a substantial increase in battery and pumped-hydro storage, hydrogen or gasfired generation for peak demand, all complemented by a market that incentivises energy users to adjust demand based on system conditions," he said.

Fitch Ratings has a neutral outlook on the Indonesian coal sector for 2022. Earnings generation should slow down as selling prices ease from the highs of 2021, while cash accumulation from 2021 should support adequate rating headroom for most companies.

The plan would require A$12 billion ($8.6 billion) in network investments, AEMO said in the plan.

Fitch expects operating profiles to remain the key driver for most ratings. Capex is likely to remain low as organic growth is still slow. Investments might pick up as some miners may continue to look at diversification away from thermal coal to ease out the rising ESG considerations from various funding sources. Fitch revised up its 2022 price assumptions for Australia Newcastle 6,000kcal/kg coal in November

The market operator expects electricity consumption from the grid will nearly double to 330 terawatt hours (TWh) as transport, heating, cooking and some industrial processes are electrified over the next three decades.

It forecasts renewable generation capacity will grow to 140 gigawatts (GW) from the current 15 GW, more than doubling every decade to 2050.

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2021, followed by an upward revision of our Indonesian 4,200kcal price estimates, based on the sector’s evolving supply and demand dynamics.

The issue has been raised with Lithuania, Lithuania is analyzing what can be done. There is no overnight solution here," he said.

Most coal producers are on Stable Outlook due to wider rating headroom amid strong earnings forecasts into 2022

Lithuania suspended the purchase of electricity from Belarus last year as it considers the Astravyats nuclear power plant to be unsafe. The plant is less than 50 kilometers from Vilnius.

South Africa: Authorities turn to renewable energy to deal with load shedding

As a result, Russia and Belarus' electricity share in the Baltic States decreased by approximately 20 percent.

With coal providing 80% of its electricity, South Africa, the continent's most industrialized nation, is now banking on solar power. \The South African government has awarded 25 contracts for renewable energy projects, worth a total of 50 billion rand, or $2.8 billion, to reduce the country's heavy dependence on coal.

The 25 projects (12 wind farms and 13 photovoltaic plants), awarded to the private sector, will increase the country's electricity generation capacity to 2,583 megawatts (MW), or 4.5 percent more than at present, said Energy Minister GwedeManthashe.

Indeed, the country is living with load shedding and the South African electricity company ESKOM, which supplies 90% of households, is sinking under a debt of several billion dollars. As a result, several companies are turning to solar energy with the aim of being 100% dependent on this source by 2025..

Ministry: No potential extra energy from Russia before start of 2022 No additional electricity from Russia will enter the market before the start of 2022 as Baltic system operators have not yet reached an agreement, said Timo Tatar, undersecretary of Energy at the Ministry of Economic Affairs and Communications on Thursday.

"There is no big breakthrough in this respect.

28 | CCAI Monthly Newslette December 2021

New Year brings new tax for highearning Russian miners, steelmakers Russian mining and steel companies are looking forward to the end of a15% export duty on steel in the New Year, but the benefits will be lessened by a hit from a new tax system, designed by the Russian government to tap deeper into metallurgical companies’ earnings when market prices are high.

In January 2022, Russia’s mineral extraction tax (MET) for iron ore will increase significantly, by twofold or more, and tax on coking coal will rise by a minimum of 25%.

The country will also introduce an excise on liquid steel, payable on every ton produced, including unsold volumes. Nevertheless, Russian steel may become more competitive on export markets than it is today. The new taxes follow the expiry of the 15% export duty on steel valid from August to December 2021 that in the current market exceed the sum of the revised MET rates and the new steel excise.

The tax code revisions were prompted by steelmakers’ record high earnings. H1 2021 EBITDA of major steelmaker Evraz doubled on year to $2.1 billion; 9M 2021 EBITDAs of peer companies MMK and NLMK tripled to $3.3 billion and $5.5 billion, respectively.

The new tax hikes have been designed to reflect these extraordinarily high profits and uphold tax revenues after the current export duties on ferrous metals expire.

MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL South Africa South Africa Australia Indonesia Indonesia

(kcal/kg) 6000 NAR 5500 NAR 5500 NAR 5000 GAR 4200 GAR

Monthly Price - FOB USD 135.20 USD 110.30 USD 101.97 USD 99.18 USD 68.72

Monthly Price- FOB INR 10178 INR 8303 INR 7676 INR 7466 INR 5173

Monthly Change (USD) -7.05 -4.20 -12.79 -22.16 -17.01

Indicative Pet Coke Price PET COKE

Sulphur

Price

India-RIL(Ex-Ref.) Saudi Arabia (CIF)

-5% + 8.5%

INR 15680 INR 12197 ($162)

Monthly Change ($) INR -5101.00 -51.98

USA (CIF)

- 6.5%

INR 13821 ($184)

-37.40

Exchange Rate

Change (Monthly)

INR 75.28

0.80

Indicative Coking Coal Price Current Month

Premium Low Vol FOB CFR China 339.85 349.65

Monthly Change (USD)

-32.09

-147.35

HCC 64 MID Vol Semi Soft Low Vol PCI Mid Tier PCI MET COKE 62% CSR FOB Aus CFR China FOB Aus FOB Aus FOB Aus CFR India FOB N China 291.70 321.75 219.25 234.40 233.20 566.00 460.80 -18.43

-109.50

South African Coal News: * Amid the renewed scare caused by the spread of Omicron, South African Coal Export Price stands at a current level of $140.07, down from 214.27 last month and up from 69.62 one year ago. This is a 34% drop in price compared to last month. However, export figures are not likely to improve much at present due to issues related to shipments, experts say. * South Africa’s state power utility Eskom reached a synchronization milestone earlier this month when Unit 4 of the Kusile Power Station Project was connected to the national grid for the first time.

Eskom said this would make Kusile, situated in Mpumalanga, South Africa’s “largest construction project and will be the world’s fourth-largest coal plant once completed with six units and will produce a maximum 4,800MW.

30 | CCAI Monthly Newslette December 2021

4.37

-21.23

-1.49

-61.38

-119.95

* In the KwaZulu-Natal province of South Africa, the expanding Somkhele coal mine is having significant impact in the local communities, experts say. While the mine is pivotal to South Africa’s fossil fuel requirements, the Government is cautious regarding the adverse impact it might have on people and environment. Though many locals work for the mine, nearly 150 families have been forcibly relocated as the mine grows. * Carbon tax and coal procurement costs in South Africa may cause the power tariff to sharply go up, state-owned power utility Eskom has said. The company has applied for a 20.5% electricity tariff increase for the financial year that starts in April, 2022. * South Africa based miner Thungela Resources that was created following the demerger of Anglo American’s export-focused thermal coal assets, is set to cap a successful debut on the Johannesburg Stock Exchange this year with a better-than-

anticipated final dividend. This follows strong thermal coal prices in the second half of its financial year ended December. The benchmark export coal price averaged $123 per ton for the year-to-date and peaked at R210/t end-October before moderating to $141/t by the end of November. The discount applied to its export coal grades this year narrowed to 17% on average from 26% last year.

Australian Coal News:

* The Adani Group will begin exporting high quality, low sulphur coal from its Carmichael mine in Australia soon by tapping a new multi-decade source to meet energy needs. The first shipment of high-quality coal from the Carmichael mine is being assembled at the North Queensland Export Terminal in Bowen ready for export as planned. The company has planned an initial production of 10 million tonnes a year from the mines in the Galilee Basin. * For Australian coal, which has faced restrictions in the Chinese market since late 2020, new windows of opportunities have opened up. Many other Asian markets – such as India, Japan, South Korea and Taiwan – have witnessed sharp rises in Australian coal inflows. While the restrictions from China have changed the trade flow map for Australian coal in a big way, they have not made a major dent on overall volumes. Analysts expect Australia’s thermal coal exports in 2021 to fall by only 2.7% year on year and by 1.1% year on year in 2022. * Australian thermal coal prices may remain relatively high until 2022-23, hit by a lack of investments on the back of recent climate commitments by several countries at the UN Climate Change Conference.

Additionally, some proposed coal projects have recently been withdrawn or abandoned, including proposed mines at Dendrobium and the Bylong Valley while the proposed expansion at New Acland continues to face legal objections. * Australia's Newcastle Port must increase coal shipments by more than 20pc in December from November if it is to match the depressed volumes achieved in 2020, although the weather in its home state of New South Wales (NSW) is against it.

Newcastle needs to ship 14.75mn t in December for 2021 exports to match those achieved in 2020.

It would need to ship a record breaking 21.46mn t for 2021 to match 2019, which would be 36% more than the monthly maximum of 15.73mn t set in June 2019.

Indonesian Coal News:

* Indonesia has banned coal exports in January 2022 due to concerns over low supplies for domestic power plants, as per a letter sent by the energy ministry. The ministry instructed that all coal at harbours should be stored to supply power plants and independent power producers (IPP). The country has a so-called Domestic Market Obligation (DMO) policy whereby coal miners must supply 25% of annual production to state utility Perusahaan Listrik Negara (PLN) at a maximum price of $70 per tonne, well below current market prices. *As per latest available data, Indonesian coal export to Japan fell by 41pc in November ’21 from a month earlier to 865,956t after heavy rainfall across Indonesia's main coal-producing region of Kalimantan resulted in production and logistics disruptions. As a result Indonesia has fallen to fifth place in terms of coking coal exports to Japan. * Indonesia's 2022 coal output is estimated at between 637 million to 664 million tonnes based on production plans currently being finalised, said Sunindyo Suryo Herdadi, the director at the Energy and Mineral Resources ministry. The figure compared to an output target of 625 million tonnes this year. Domestic demand for coal next year has been estimated at 190 million tonnes. * Indonesia's Non-Tax State Revenue from the mineral and coal sector set a record high this year.

As of December 10, the figure has reached Rp70.05 trillion, or 179.14 percent of the State Budget target of only IDR 39.1 trillion which is the highest non-tax revenue achievement so far. Despite coal's soaring price worldwide, domestic production has actually been slow. * Indonesia’s coal benchmark prices in December were set 25.7% lower compared to a month earlier, the energy ministry said in a statement. Coal benchmark prices stood at $159.79 per tonne, compared to $215 in November. The lower price was due to higher Chinese coal production, an energy ministry spokesman said in the statement.

US Coal News:

* US coking coal miners expect the fourth-quarter slump in cfr China prices to pass as soon as early 2022, with the market still backed by supply tightness CCAI Monthly Newsletter December 2021

| 31

and steady seaborne demand outside China. Though the sharp price drop has sidelined US miners and suppliers offering into China in recent weeks, margins for coal producers remain attractive and will continue to draw US coals to China. * The new COVID-19 variant and the increasing number of cases does not seem to be impacting the energy demand, but the supply seems less promising in the US in coming years. So far in 2021, coal is reaching a new level of consumption in the USA while oil is peaking with a new demand figure of 23.3 million barrels per day in the USA despite the onslaught of Omicron. * Coal production in the U.S. has fallen by half in the last 10 years. Utility companies have been switching to natural gas, which is cheaper, or to renewable energy. However, coal in the US has managed to stage a remarkable recovery this year as Global demand increases for U.S. metallurgical coal has increased manifold. Over half of the metallurgical coal produced in Virginia is actually going overseas.

Much of it is headed for China, the world's largest consumer of coal. The US Congress has passed a major infrastructure bill which is expected to provide an even bigger market for coking coal. * A 20-month high 2.83 million st of coal was exported from the terminals in the Hampton Roads area of Virginia in November. This month’s coal exports were the highest since 2.88 million st in March 2020. The volume was 3.3% higher than October and 24.4% higher than the year-ago month. FOB Hampton Roads 6,000 kcal/kg thermal coal rose to an average $128.23/mt in November, the highest price on record since April 6, 2018.

Pet Coke News: * Petcoke finally started to give in based on demand pull-back and increased supply as refineries are running on higher capacity utilisation levels. The discounts had disappeared and coal switching was seen in India, China and Turkey. The spot market saw more cargoes and the refineries had to get the petcoke out, now facing a lack of demand based on the lower coal prices. Petcoke finally started to give in based on demand pull-back and increased supply as refineries are running on higher capacity utilisation levels.

32 | CCAI Monthly Newslette December 2021

* The gap between US based High-sulfur and midsulfur petcoke gap is expected to narrow compared with previous weeks because there’s no real interest in mid-sulfur petcoke as China and Turkey are out of the market. Meanwhile, Petcoke deliveries into the Mediterranean region endured another lukewarm week amid concerns over declining import prices which can impact the purchase activity.

Shipping Update: * 2021 has been a mixed bag for the shipping industry. The dry bulk market fared much better than the tanker one, during 2021. As per detailed review of the Baltic indices (dry/wet) and the second-hand vessel prices, 2021 proved to be robust for dry bulk which reached its highest levels of the past 13 years, back in October 2021. All dry indices began the year at low levels, with the BPI, BSI & BHSI having recorded their lowest levels of 2021 in early January and BDI & BCI during mid-February. * Global tanker markets are expected to see better days in 2022 on the back of a likely increase in trade of oil and oil products, but the return to a prepandemic era can still be painful due to upcoming deliveries and slower scrapping of old ships. Higher bunker prices are also eroding earnings, though it has been factored in the new world scale flat rates.

Nevertheless, vulnerability to future bunker price spikes remains. * In direct contrast to the new building market, where things have not been that active, the S&P market has been quite vivid. Given the fair number of units changing hands, overall buying appetite has been on an upward orbit. With many interested parties having already taken a relatively bullish stance for the upcoming period, freight earnings are expected to return to more robust levels. * China shipped in 35.05 million tonnes of coal last month, up from 26.94 million tonnes in October, data from the General Administration of Customs showed. Chinese coal traders, however, were forced to sell cargoes at losses or tried to delay imports after market intervention triggered a 50% price drop that saddled them with unprofitable supplies.

PRODUCTION AND OFFTAKE PERFORMANCE OF CIL AND SUBSIDIARY COMPANIES COAL PRODUCTION (Figs in Mill Te) DEC'21

SUB CO.

APR'20 - DEC'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ECL

2.90

4.20

-31.20

BCCL

2.90

2.70

5.10

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

21.20

30.00

-29.20

20.10

17.50

14.70

% ACTUAL GROWTH THIS YEAR

CCL

6.40

7.30

-11.60

42.80

39.80

7.50

NCL

11.20

10.50

6.60

86.40

84.20

2.50

WCL

5.80

5.50

6.60

34.20

28.60

19.50

SECL

14.20

14.00

1.20

91.80

90.70

1.22

MCL

16.80

14.10

19.40

117.10

101.80

15.00

0.00

0.00

413.60

392.80

NEC CIL

0.00 60.20

58.30

3.30

5.30

OFFTAKE (Figs in Mill Te) DEC'21

SUB CO.

APR'20-DEC'21

ACTUAL THIS YEAR

ACTUAL SAME PERIOD LAST YEAR

ECL

2.80

3.10

-9.10

BCCL

2.70

1.80

47.60

ACTUAL SAME PERIOD LAST YEAR

% GROWTH

26.40

29.50

-10.40

23.00

16.80

37.50

% ACTUAL GROWTH THIS YEAR

CCL

6.20

6.10

1.40

51.50

45.50

13.20

NCL

11.70

10.00

16.90

92.20

79.60

15.80

WCL

6.10

4.90

24.90

46.00

33.20

38.40

SECL

14.50

12.70

14.00

113.30

98.40

15.10

MCL

16.60

13.80

20.80

129.40

106.50

21.50

0.00

0.10

60.70

52.50

15.70

481.80

409.60

NEC CIL

0.00

17.60

CCAI Monthly Newsletter December 2021

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OVERALL DOMESTIC COAL SCENARIO Coal Production (in MT) Company CIL SCCL

November, 2021 53.80 5.61

November, 2020 51.69 4.91

% Growth 4.1% 14.2%

April- November, 2021 353.41 40.86

April- November, 2020 334.52 26.94

% Growth 5.6% 51.7%

Overall Offtake (in MT) Company

November, 2021

November, 2020

% Growth

April- November, 2021

April- November, 2020

% Growth

CIL SCCL

56.85 5.77

51.32 4.65

10.8% 23.9%

421.11 42.48

357.13 26.52

17.9% 60.2%

Coal Despatch to Power (Coal and Coal Products) (in MT) Company

November, 2021

November, 2020

% Growth

April- November, 2021

April- November, 2020

% Growth

CIL SCCL

47.70 4.66

39.69 3.90

20.2% 19.6%

339.89 35.34

277.44 22.37

22.5% 58.0%

Company

Coal Qty. Allocated November, 2021

Coal Qty. Allocated November, 2020

Increase over notified price

Coal Qty. Allocated April- November, 2021

Coal Qty. Allocated April- November, 2020

Increase over notified price

CIL

4.02

4.09

112%

19.53

25.78

70%

Spot E-auction of Coal (in MT)

Special Forward E-auction for Power (in MT) Company

Coal Qty. Allocated November, 2021

Coal Qty. Allocated November, 2020

Increase over notified price

Coal Qty. Allocated April- November, 2021

Coal Qty. Allocated April- November, 2020

Increase over notified price

CIL

5.94

1.38

50%

24.43

17.96

34%

Exclusive E-auction for Non- Power (in MT) Company

Coal Qty. Allocated November, 2021

Coal Qty. Allocated November, 2020

Increase over notified price

Coal Qty. Allocated April- November, 2021

Coal Qty. Allocated April- November, 2020

Increase over notified price

CIL

3.16

0.60

98%

23.33

17.40

37%

Special Spot E-auction (in MT) Company

Coal Qty. Allocated November, 2021

Coal Qty. Allocated November, 2020

Increase over notified price

Coal Qty. Allocated April- November, 2021

Coal Qty. Allocated April- November, 2020

Increase over notified price

CIL

0.20

-

82%

2.86

2.29

81%

Special Spot E-auction Scheme 2020 For Import Substitution Company CIL

Coal Qty. Allocated November, 2021 -

Coal Qty. Allocated November, 2020 3.30

34 | CCAI Monthly Newslette December 2021

Increase over notified price -

Coal Qty. Allocated April- November, 2021 2.33

Coal Qty. Allocated April- November, 2020 4.90

Increase over notified price 50%

CCAI Monthly Newsletter December 2021

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