CCAI Newsletter Feb-23

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From the Editor’s Desk

India gears up for summer, with adequate measures in place by the government to ramp up coal supplies and increase the share of renewables in India’s energy mix, enabling the country to fight the power shortage challenges. CIL has also increased its supply considerably to meet the power crisis issues.

This year India's power utilities are likely to increase domestic coal procurement to cope with surges in demand, keeping in mind the situation that was created last year by extreme temperatures and accordingly coal transportation to the generators had been immediately prioritized both by the coal ministry as well as the Railways.

Looking at the significant increase in power demand, the Ministry of Power recently asked all the coal-powered utilities to blend 6 % imported coal and has invoked Section 11 of the Electricity Act, 2003. According to the act, all imported coal-based (ICB) power plants have been directed to run at full capacity allowing plants to supply on priority to holders of power purchase agreements (PPAs).

Coal in India is anticipated to have a buoyant future as domestic coal production has been steady throughout the fiscal with a consistent rise in energy demand. On the other hand, industrial sectors, including cement and metal companies, are also hopeful that the proactive steps initiated by the government will not let coal be an issue this summer.

All subsidiaries of CIL have registered growth over the previous year and the growth rate is likely to remain stable in the coming days. Another positive development in the power sector is that coal stock positions at power stations look better than the levels seen a year ago.

Coal despatch from captive blocks to different sectors witnessed more than a 30% increase this year compared to the year before.Earlier the government had allowed 100 % FDI in commercial mining and permitted single window clearance for the seamless functioning of mines while captive mines have been permitted to sell up to 50% of their annual production after meeting the requirement of the end-use plants.

In the face of ramping up coal supply, to make business smooth for consumers, a significant measure known as the single window mode agnostic e-auction has been facilitated with an aim to improve operational efficiencies in the domestic coal market. The NRS Linkage auction starting with the sponge iron subsector began on Feb 9th, 2023 after a span of three years to allocate coal to the various industry sectors and captive power sectors on a long-term basis.

The array of initiatives by the Government is likely to ensure a smooth supply of coal to the power sector and avert an acute power crisis when the temperature peaks like last summer. Along with the steps taken to ensure consistent coal supply to the utilities the Government has also increased despatch of coal to the industries both via road and rail mode. It remains to be seen in terms of rake movement whether the proactive measures taken in this regard yield positive results for the industries as well.

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06 Consumers' Page

10 Power

18 Domestic

30 Global

34 Monthly Summary Of Imported Coal & Petcoke

37 Overall Domestic Coal Scenario

CONSUMERS’ PAGE

Issues Faced by Power Sector

Consumers:

1. Submission by Power Utilities in North India for considering shortest distance between NCL and powerplants

as rationalized distance:

Some of the power plants based in northern India (Punjab, Haryana, etc.) having coal linkage from Northern Coalfields Limited (NCL) have pointed out that the distance through the shortest railway route from NCL sidings to their plants in north India is actually much lesser than the distance for which freight is charged by Indian Railways as per notified rationalized route. In some instances, the difference between the shortest distance from the cluster of NCL command area sidings to these power

plants and the distance as specified in the rationalized route is about 200 kms.

While practically most of the rakes are being routed through the shortest route only, the freight is still being charged as per the notified rationalized longer route by the Railways, leading to higher freight charges of around Rs.300/tonne in some cases.

Request has been made to the Railway Board to review the current notified rationalized distance originating from NCL command area sidings to the north-Indian power plants and revise the rationalized route to the shortest distance through which most of the rakes are being transported by railways and determine freight charges accordingly.

2. Submission by Power Sector consumers for not levying penal charges for load adjustment of rakes due to overloading:

The Bilaspur Division of SECR has imposed 6 (Six) times penal detention charges i.eRs. 53,100/- per hour from 25.12.2022 for load adjustment of rakes in case of overloading instead of Rs. 8,850/- per hour of standard demurrage charges. It is requested that such a huge penal charge may not be levied and standard detention charges may be imposed by the railway division in case of overloading of rakes.

As loading of rakes is the responsibility of the coal companies and the consumers do not have any role in the rake-loading process, demurrage charge is ideally payable by the coal company. Therefore, in case of overloading of rakes, if additional time is required for load adjustment, then the detention penal charge should also be borne by the coal company itself.

Request has been made to Railway Board, SECR and CIL that Consumers may not be penalised in case of overloading of rakes by levying rake detention charges on them for load adjustment.

3. Submission by Power Sector requesting refund of Ad-valorem charges in credit notes against grade slippage:

A number of Power Sector consumers have pointed out that Ad-valorem taxes such as Royalty, DMF, NMET, etc. paid by them along with advance coal value are not included in the credit notes issued by respective coal companies. It may be noted that combining all the ad-valorem taxes amounts to a significant portion of the total coal cost paid by the Power Generators towards procurement.

Request has been made to MoC so that all CIL subsidiaries may include these amounts related toRoyalty and Ad-valorem taxes during the issuance of credit notes against grade slippage.

Issues Faced by Non-power Sector Consumers:

4. Comments and views given by NRS Consumers on Tranche-VI NRS Linkage Auction:

The following submissions were made to CIL based on comments and suggestions given by member companies from Non-power Sector:

*Indexing of basic price of coal:

The base price of coal in Tranche-VI NRS Linkage Auction will be linked with Wholesale Price Index (WPI)from 1st April every year starting with 1st April, 2023.It is requested to consider keeping the basic price of coal at 15% of the Wholesale Price Index (WPI). Also, that in case of a change in index price, the lower limit should be kept at 10% of the prevailing base price in tune with the upper cap of 10% so that uniformity is maintained.

*Extension of FSA tenure:

CIL has proposed to extend the FSA tenure for another five years if any consumer can establish the captive mode of transport (except via Road mode), capable of transporting 80% of the FSA quantity but the consumers have opined that that developing 80 % captive transportation capacity is a steep target which may attract limited interest from the consumers and it also involves huge capital investment. It is requested that the target to develop captive transport capacity may be reduced to 20% of the FSA quantity at least for Tranche-VI. Also, the consumers may be given 10% discount on coal price rather than levying 10% facilitation charge over the basic price of coal.

*Review of the proposal for limiting the validity of allotted rakes to 90 days:

CIL has proposed to limit the validity of allotted coal rakes to 90 days from the date of allotment for the rakes booked under the Tranche VI linkage auction & onwards. However, it has been noticed that on many occasions, supply of the allotted quantity is taking morethan 180 days

for Rail mode and 120 days for RcR mode. It is requested to continue with the present validity till the time supply situation for Non-power Sector normalises.

*Introduction of two-year lock-in period so that bidder has the option to exit:

As many industries have been allocated coal blocks under either Captive or Commercial Sale regime which are under various stages of development, it is requested that there should be an option to exit from the Linkage FSAs when they achieve peak rated capacities from their mines. Therefore, a two-year lock-in period should be re-introduced for the successful bidders in the upcoming tranche.

*Allow inter-plant transfer of coal:

At present, CIL Linkage quantity is specifically linked to a particular location and end use is defined (Kiln/CPP). It is requested that interplant transfer of coal within the same company/business group (within different units of the same organisation) may be allowed for higher capacity plants in the Non-power sector in line with the power sector.

*Increase offer of coal to Sponge-iron Subsector:

As per the Sponge-iron Sector consumers, offer of coal from different CIL Subsidiaries in the upcoming linkage auction is less than the quantity required for smooth function of their plants.

Offered quantity from ECL is requested to be extended to 5 lakh tonnes.

Offered quantities of coal from Subsidiaries like WCL, MCL, CCL and NCL is requested to be doubled.

5. Appeal by NRS Consumers to increase supply of coal via rail mode:

In spite of noticeable improvement compared to previous months, the coal supply scenario to the Non-power Sector, especially via rail mode, is still languishing far below the required level.

Owing to severe curtailment of coal supply via rakes, many Industries including continuous process plants had to convert the mode of supply from rail to road in order to sustain their plant operations. Converting rail quantity to road offtake may often lead to a higher premium for coal which may be more than the premium paid to CIL for supply via rail mode.

Request has been made to MoC and CIL so that the number of rake supplied to the NRS consumers may be increased at the earliest possible.

It is also requested that in line with the modalities of the mode-agnostic single-window auction, Rail to Road conversion may be considered without change in premium so that the consumers do not have to bear the additional expenditure.

6. Appeal to extend the timeline for last date of sale of tender documents & bid due date by 15-20 days for 16th Tranche of Auction under CM (SP) Act, 2015 and 6th Tranche of Auction under MMDR Act, 1957:

The last date for sale of tender documents at the MSTC Website was on 9th January, 2023 (Today) and Bid Due Date was on 13th January, 2023 for the16th Tranche of Auction under CM (SP) Act, 2015 and 6th Tranche of Auction under MMDR Act, 1957. However, due to inclement weather conditions and holiday season during December last year, these companies could not undertake the site visits and finalise coal mines/ blocks of their interest within the offered timeframe for submitting the technical bid and initial offer.

Request has been made to MoC and CIL to extend the time schedule of last date for sale of tender documents on the MSTC website as well as Bid Due Date for the auction mentioned above by at least 15-20 days, so that the consumers may have adequate time for site visits and for finalising their preferred mines before participating in the auction.

NRS consumers pointed out that poor-quality coal being loaded from a number of ECL sidings. While the declared GCV of coal supplied via Rail from BKL-1, BKL-2 (Bankola) and POCP1 (Jhanjra) sidings is around 6101-6400 K. Cal/ kg denoting G-4 grade, coal received from these areas is between 4800-5800 Kcal/kg GCV. Also, the fixed carbon content in the received coal is around 38%-42%. Supply of coal which is much lower than the declared grade, is leading to significant financial loss to the industries.

Request has been made to ECL to supply of declared grade of coal from the said sidings of the Subsidiary coal company.

were restricted to trigger level (75% of MSQ) for several months. Restrictive supply and lack of supply via rail mode had adversely impacted the plant operation of the industries.

As MCL now has sufficient coal stock, request has been made to the coal company to supply the balance/undelivered contracted quantity (25% of MSQ) from those months (February’22November’22) with a retrospective effect.

9.

cember 2022 onwards:

Though other subsidiary coal companies of Coal India Limited have already started supplying coal up to 100% of MSQ since last December, SECL continues to supply coal up to 75% of ACQ since February 2022. Restrictive supply and lack of supply via rail mode is adversely impacting the plant operation of the industries procuring coal from SECL.

Though MCL has stated supplying coal to the NRS consumers as per MSQ from December ’22, it is known that coal supply to the industries

Request has been made to SECL for enabling supply of coal up to 100% of ACQ with effect from December 2022 onwards..

7. Submission by NRS consumers regarding significant grade slippage from various sidings of ECL:

8. Submission by NRS consumers to supply balance quantity of coal (25% of MSQ) from MCL with retrospective effect from February '22:

Submission by NRS Linkage auction consumers to supply coal up to 100% of ACQ from SECL with effect from De-

POWER

THER MAL

Rising Heat across India Raises Alarm On Another Energy Crunch

High temperatures across parts of India have pushed electricity demand to near-record levels in recent weeks, triggering worries about yet another summer squeeze on power supply. Peak demand for electricity touched 211 gigawatts in January, close to an all-time high last summer that saw a 122-year-old heat record breached.

Temperatures have been as much as 11C above normal in some regions in the past week and prompted the India Meteorological Department to advise farmers to check wheat and other crops for signs of heat stress.

The unusually early onset of hotter weatherand forecasts that power consumption will rise

as irrigation pumps and air conditioners are cranked up. Electricity demand could set a new high of 229 gigawatts in April, according to the power ministry. The electricity demand may rise 20% to 30% compared to last summer. There's no other option than to cut power supply.

India’s power demand likely to grow at 7% annually: S&P

IThe cold wave conditions in January 2023 drove north India’s power demand, which grew 18 per cent Y-o-Y at 186 gigawatts (GW) during the month with expectations that going ahead electricity demand will be in the range of 7 per cent on an annual basis.

The International Energy Agency (IEA) has projected that over the next three years, more than 70 per cent of the growth in global electricity demand is set to come from China, India and South east Asia combined. However, the agency expects a slightly slower growth rate averaging at 5.6 per cent per year for the 2023-2025 period.Crisil said it expects power demand to remain buoyant in the coming summer and grow 8-9 per cent Y-o-Y during April-September next fiscal (FY24).

Coal-fired power generation will continue to be the thermal fuel that will meet fluctuations in power demand and could reach new record highs during the spring season, especially during periods with higher-than-normal weather. The spring is usually the period with high demand for thermal fuels in the power sector, as hydro and renewables pick up during the summer months.

India Won't Shut Coal Power Plants Till 2030 to Meet Rising Demand: Report

Centre has asked power utilities to not retire coal-fired power plants till 2030 due to a surge in electricity demand, just over two years after committing to eventually phase down use of the fuel. India said last May it plans to reduce power generation from least 81 coal-fired plants over the next four years, but the proposal did not involve shutting down any of its 179 coal power plants. India has not set a formal timeline for phasing down coal use.

The CEA, which acts as an advisor to the ministry, cited a December meeting where the Union power minister had asked that ageing thermal power plants not be retired, and to instead increase the lifetime of such units "considering (the) expected demand scenario".

Peak power demand met - a measure of maximum power supplied during the day - rose to a record of as much as 210.6 GW on Jan. 18, 1.7% surpassing the previous peak of 207.1 GW at the height of an intense heatwave last April that caused India's worst power crisis in six and a half years.

"Peak power demand has already risen 5% this year. If it increased by another 3-4%, we could be staring at another crisis. There is no question of retiring old coal units," a senior official at a utility in south India said.

Gencos told to import coal to ensure sufficient stock till monsoon

Despite a spike in electricity demand between April 2022 and January 2023, the supplies of domestic coal have not been commensurate with the requirement, and therefore, the power ministry has asked Central as well as state generation companies (Gencos) to import coal through transparent and competitive procurement for blending, to ensure sufficient coal stocks at their plants for smooth operations till September 2023.

NTPC imported 13.87 million tonnes of coal in 2022-23, out of which 13.56 million tonnes has been imported from Indonesia while 0.319 million tonnes has been imported from Australia. Thermal power plants have been importing coal for blending from 2009 onwards and these imports varied between a peak of 48.8 million tonnes in 2015-16 to 23.8 million tonnes in 2019-20.

The gap between daily coal consumption and daily arrival of domestic coal ranged from 2.21 lakh tonnes to 0.5 lakh tonnes between April 2022 and January 2023, sources said. If there would have been no import for blending purposes, the coal stock available at domestic coal-based plants would have reduced to zero by September 2022. The average depletion was about 1.6 lakh tonnes per day during the first half of 2022-23, they added further.

Imported coal plants told to run at full capacity in peak summer: Power Ministry

The power ministry asked imported coal-based power plants to run at full capacity for three months starting March 16, invoking emergency powers under Section 11 of the Electricity Act. Power demand is expected to peak around 229 GW in April, the ministry said in a notification.

Section 11 of the Electricity Act provides that the government may, in extraordinary circumstances, ask a generating company to operate and maintain any station in accordance with its directions.

In case the existing power purchase agreements of the imported coal-based plants do not have adequate provisions to pass through the increase in cost because of higher international fuel prices, a committee will work out the benchmark rates, the notification said.Any surplus power left after meeting the power purchase agreement requirement by such units or any power for which there is no agreement will be allowed to be sold on the power exchanges.

In the current financial year, India's electricity demand hit a high 215 GW. To meet the increased projected peak demand in the coming April, about 193 GW generation would be required from thermal generating stations, the power ministry said.

IEX set to launch High Price Day Ahead Market segment in March

Indian Energy Exchange is set to to launch the High Price Day Ahead Market segment by midMarch. This will facilitate electricity generating firms to sell power at a price as high as Rs.50 per unit.

The relaxation in norms by the CERC will provide relief to three categories of power generating companies (gencos) which are those running their plants on expensive natural gas (RLNG), imported coal and BESS (Battery Energy Storage System).

Currently, there is a price ceiling of Rs.12 per unit in the Day Ahead Market (DAM) on the energy exchanges. With the current level of upper price cap, gencos having high variable costs for operating their plants are generally not keen on selling electricity on the energy exchanges and this in turn results in stranded power generation capacity.

Against this backdrop as well as the upcoming summer season, the CERC, earlier this month, allowed the introduction of a new segment -HP-DAM -- wherein electricity can be sold and

bought at a price as high as Rs.50 per unit. The CERC has allowed three categories of power generators to participate in the HP-DAM market -- gas-based generating stations using imported RLNG and naphtha; units using only imported coals and BESS.

Power plants start tariff revision talks

Coal-fired thermal power plants are getting ready to begin talks on signing supplementary power purchase agreements (PPAs) after the power ministry invoked emergency provisions. Besides, thermal coal price has fallen in the global markets which could further improve their bottomline that may be reflected in their financial performance.

The power ministry had recently invoked emergency powers to direct power plants that run on imported coal to maximise output and sell surplus power in exchange. The order will be effective from March 16 to June 15.

The imported coal prices which had touched $300 per tonne last year are expected to cool to $200 a tonne. Analysts said the coal cost could go up as the unofficial import ban of Australian coal by China has been lifted which could push up demand. China has started buying Australian coal this month, signaling the end of an unofficial ban that ran for over two years, according to market sources.

Centre directs states to expedite energy efficiency activities on mission mode

The Centre and Bureau of Energy Efficiency (BEE) have directed state governments to expedite energy efficiency activities on a mission mode. This is aimed at securing the interests of future generations and the economy at large. Union Power Minister R K Singh has emphasized all state governments to consider energy efficiency as a flagship programme, aimed at reaching the central government's targets and mitigating climate change.

He advised proactive states like Andhra Pradesh, Karnataka, Chhattisgarh, Uttar Pradesh, Guja-

rat, Maharashtra and Madhya Pradesh etc. to identify the energy saving investment potential in their respective States and focus on energy efficiency related investments that will help the states to boost the economy, improve energy performance in key sectors, create employment and improve the environment.

AbhayBakre, Director General of BEE directed state energy saving bodies to strive to achieve the national energy savings target of 150 million tonnes of oil equivalent of energy, which equates to 750 billion units of electricity. Further, APSECM has been directed to finalize the State Energy Efficiency Action Plan for each sector, including achieving the state-specific energy target of 6.68 million ton of oil equivalent (mtoe) by 2030.

Indian Government releases draft guidelines for pumped storage plants

The Government of India has released draft guidelines to promote the development of pumped storage projects in the country, and are seeking comments from stakeholders by the end of this month. With pumped storage plants expected to play a key role in grid stabilization and to help meet peaking power demand, the government said it felt the need to formulate a separate guideline to promote its development.

To date, the Central Electricity Authority (CEA) estimates that the on-river pumped storage potential is 103GW in India, with a large number of off-river pumped storage potential also available. The government is proposing suitable support to be extended to identify and evaluate this potential.

In India, there are currently eight projects (4745.60MW) in operation, four projects (2780MW) under construction, and 24 projects (26630MW) allotted by States which are under different stages of development. The draft National Electricity Plan (NEP) published by the CEA indicates that 18.8GW of pumped storage projects and 51.5GW of BESS (5 hour) are required to integrate planned renewable energy capacity addition to 2032.

RENEWABLES

PM Modi bats for more RE and less fossil fuel or gas-based economy

The PM said the strategy for green growth stands on three pillars. First, increasing the production of renewable energy; second, reducing the use of fossil fuel in the economy; and finally, rapidly moving towards a gas-based economy in the country.

Modi said the country has already achieved the target of 10 per cent ethanol blending in petrol five months before time, and 40 per cent non-fossil fuel electricity generation has been achieved nine years in advance. India is moving with a target of production of 5 MMT green hydrogen. An allocation of Rs 19,000 crore has been made to incentivise the private sector in this field for electrolyser manufacturing, green steel manufacturing and long-haul fuel cells etc.

The PM also highlighted that India could produce 10,000 million cubic metres of biogas from cow dung and 150,000 cubic metres of gas, contributing up to 8 per cent to the city gas distribution in the country. The government has announced plans to set up 500 new plants under the GobardhanYojana. The government will spend Rs 10,000 crore on these modern plants, he said.

India needs Rs 2.5L crore for 500-GW green energy: Power ministry

As the 2030 deadline to transition to 500-GW non-fossil energy looms large, the Union Power Ministry has asserted that the country was on path to achieve the goal, but requires investments with the transmission works for the solar projects alone expected to cost Rs 2.5 lakh crore.

During the COP26 meet in November 2021, Prime Minister NarendraModi announced that India will have non-fossil electricity generation of 500 GW capacity by 2030. With the present installed capacity of renewable energy estimated at 160 GW, India has a long way to go to achieve the target.

“We are aiming to achieve 42% of electricity from renewable sources by 2030. If you talk of solar, we have about 61 GW at present and we are expecting close to 300 GW of installed capacity. The 500 GW transmission plan will require new investment of Rs 2.5 lakh crore for transmission alone. We estimate that 1 MW solar energy will require Rs 4 crore,” Power Secretary Alok Kumar said, adding that the country will require $10 billion by 2070 to achieve net zero.

India’s Solar Power Generation Rises to 95.15 BU in 2022

India generated around 95.15 billion units (BU) of solar power in the calendar year (CY) 2022, a 38% increase compared to 68.77 BUgenerated last year. Solar generation has seen continuous positive growth since 2018. The increase in overall solar power generation is due to new capacity additions during the year. Solar power generation during the fourth quarter of 2022 was 24.91 BU, a rise of 46% year-over-year from 17.1BU. The generation was up by 10% quarterover-quarter from 22.6 BU.

The Economic Survey 2022-23, which was tabled in the Parliament today ahead of the budget sessions, said that India has become a popular investment destination for renewables over the last few years. It said that between 2014 and 2021, the country attracted a totalinvestment of $78.1 billion in the renewable energy sector. Investment in renewables remained close to or exceeded $10 billion annually since2016, except for a dip in 2020 due to the COVID-19 pandemic.

Abu Dhabi’s International Holding Company (IHC) has said it would invest AED1.4 billion ($400 million) through its subsidiary GreenTransmission Investment Holding into the Follow-on Public Offer (FPO) of Adani Enterprises. Adani’s $2.5 billion FPO received a lukewarm response when it opened, but IHC’s investment

announcement has come as a shot in the arm for the Indianmultinational conglomerate.

Talks on to allow older solar units exemption from duty

The Ministry of New and Renewable Energy is again in talks with the finance ministry for giving 'grandfathering' benefits to solar power projects that were bid out before customs duty was announced on modules and cells in March 2021. The latest discussion may allow projects of around 26 GW capacity an exemption from the levy to import solar modules and cells.

The imposition of a 40% basic customs duty (BCD) duty on solar modules and 25% on solar cells came into effect in April 2022. The duty is levied to protect and encourage domestic manufacturing. No relief was given to any projects after the duties were announced.

Scheme for mini hydro projects in the works

The Centre is planning to start a programme to support small hydro power projects in the country. Currently, there is no programmeto support the sector in India.

“We want to come out with a new scheme for small hydro. It is still under planning. There was a scheme till 2017, but there has been no scheme since then. We have not had a scheme for small hydro for a long time. An initial draft has been prepared and it still under consideration," Secretary of Ministry of New and Renewable Energy sources said.The secretary however said that no decision have been made yet on the support required for small hydro projects.

Hydro power plants of 25 MW or below are classified as small, and they come under the purview of the ministry of new and renewable energy (MNRE). Currently, the installed capacity of small hydro power projects is 4.9 GW, which accounts for 1.2% of the total power capacity. India has an estimated potential of 21.1 GW from 7,133 sites

for power generation from small and mini hydro projects, according to the Hydro and Renewable Energy Department (HRED).

Atomic energy to get lower allocation in FY24 at Rs 25,078 crore

The Indian atomic energy sector is expected to get Rs 25,078.49 crore which is lower than what it got in FY23. As per the Demand for Grants for 2023-24, the Department of Atomic Energy has been allocated a sum of Rs 25,078.49 crore as against the revised estimates (RE) of Rs 25,965.67 crore for 2022-23.

The Nuclear Power Corporation of India Ltd (NPCIL) will get a sum of Rs 22,273 crore and the BharatiyaNabhikiyaVidyut Nigam Limited Rs 201 crore for FY24.

The other public sector companies under the Department of Atomic Energy - Indian Rare Earths Ltd will get Rs 120.30 crore, Uranium Corporation of India Ltd Rs 59.82 crore, and Electronics Corporation of India Ltd Rs 15 crore - during FY24.The Fast Reactor Fuel Cycle Projects (FRFCF) at Kalpakkam is proposed to get Rs 515.50 crore.

India Plans 20 Nuclear Power Plants By 2031

Recent government announcements on accelerating the use of nuclear power in India suggests a significant increase in the pace. Earlier in January, Union Minister Jitendra Singh said that public sector companies would be roped in to help build plants. Plans are afoot to commission at least 20 nuclear power plants by 2031, according to a December LokSabhareply.India has historically taken more than a decade to get plants in action.

The median construction time for nuclear plants -- which is the average construction time taken from the first pouring of concrete for the construction of the plant to the time it connects to the grid -- in India is 14.2 years. In comparison, it takes 5.7 years to connect a plant to the grid in China. Though it still has only a singledigit share in total electricity production, India has been looking to tap nuclear power faster by building plants in fleet mode.

Such plants are built in five years from the first pour of concrete.

In 2021, 3.2 per cent of the electricity produced in India was from nuclear sources, an increase from 2.8 per cent a decade ago India's share in the global nuclear production has doubled from 0.8 per cent to 1.5 per cent in the same period global nuclear power production will grow by 46 per cent by 2040 and 90 per cent of this increase in generation will take place in India and China.

India’s EV market likely to cross 1-crore sales mark per annum and add 5 crore jobs by 2030, as per Economic Survey

India's electric vehicles (EV) market is expected to grow to one crore units annual sales by 2030 and create 5 crore direct and indirect jobs, according to the Economic Survey 2022-23. The automotive industry is expected to play a critical role in the transition towards green energy. The domestic electric vehicles (EV) market is expected to grow at a compound annual growth rate (CAGR) of 49 per cent between 2022 and 2030.

As per industry estimates, the total EV sales in India stood at around 10 lakh units in 2022. India's auto component and system maker Anand Group launched a new platform, Anevolve, earlier this month to developecleantech in India. According to different media reports, Anevolve has recruited multiple EV component and vehicle manufacturing companies from Israel, Japan, South Korea, UK, and India. Furthermore, Anevolve signed a memorandum of understanding (MoU) with UK-based hydrogen fuel cell powertrain solution provider Viritech.

One of the partnerships is a joint venture with Japan's semiconductor startup Headspring. Nikkei Asia reported that the two companies plan to start mass-producing EV components for local and European carmakers operating in India. According to Electronics Weekly, Headspring will contribute proprietary technology for developing inverter and converter modules for EV powertrains and converters..

DOMESTIC

Centre says domestic coal production to touch 1.31 billion tonnes by FY25

The Coal Ministry has announced that the government has fixed a target of 1.31 billion tonnes (BT) of coal production for FY 2024-25, adding that the same will go up to 1.5 BT by FY30. This comes as India’s domestic coal production has increased by over 16 per cent in the current financial year as energy demand continues to rise. From April 2022 to January 2023, India produced 698.25 MT of coal, against 601.97 MT during the same period of the previous year. In

April last year, India’s power demand touched a record high of 216 GW, up 6 per cent year-onyear, as several regions in the North faced severe heatwaves.

In FY23 so far, Coal India’s production alone has increased by over 15 per cent to 550.93 MT against 478.12 MT last year. Meanwhile, production from captive and commercial coal mines has increased to 93.22 MT in April’2022 to Janaury’2023 period of FY 22-23. The government ramped up domestic production amid a sharp increase in power consumption last year in India, which is the world’s third-largest energy-consuming country.

Coal ministry auctions 10 coal mines with 1866 MT coal reserve

The coal ministry announced the auction of 10 coal mines, as a step forward for the auction process for 141 coal and lignite mines, launched in November last year. The ministry said that out the 10 mines, 6 were CMSP coal mines and 4 were MMDR coal mines. The total coal reserve of these 10 mines is a whopping 1866 MT, which presents a significant opportunity for commercial mining.

The Coal Ministry has stated that these mines have the potential for a capital investment of Rs. 1185 crore, which could help to create jobs and boost the economy.

Among the 10 mines were, Chendipana in the state of Odisha, Datima and Purunga in Chhattisgarh, KalambiKalmeshwar and North West of Madheri in Maharashtra, KhagraJoydev in West Bengal, Mandla North and Marwatola VII in Madhya Pradesh, and, Parbapur Central and Patal East in Jharkhand. Recently, the ministry had announced that 27 coal mines will be auctioned in the upcoming round of commercial mines auction that begins on February 27.

India's thermal coal imports stable at around 11 mnt in Jan'23

It should be noted that coal imports have been fairly strong despite the increase in domestic coal production. India's coal production increased by 10 mnt, or 13%, y-o-y to 90 mnt in January. Production witnessed m-o-m growth of around 7%. Moreover, in the first 10 months of FY23 (April 2022-January 2023), the country's coal production increased by 16% y-o-y to 693 mnt.

However, imports have surged despite growth in domestic production. India's coal imports increased by 15% in 2022 to 162 mnt despite growth in domestic production partly due to the government's mandate obligating operators of

coal-based power plants to increase inventories by importing at least 10% of their coal demand and easing the restrictions on coal blending.

Buyers also ramped up imports of sharply discounted coal from Russia. India has been focusing on improving domestic coal production to achieve its FY23 target of 900 mnt. India's thermal coal imports from Indonesia stood at 4.30 mnt in January as against 6.24 mnt in December, down 31% m-o-m. Imports fell despite a 12% increase in domestic thermal power production in January. India imported around 107 mnt of coal from Indonesia in 2022. Shipments from Australia almost doubled to 2.30 mnt as against 1.16 mnt in December.

CIL seeks nod to raise investment cap in JVs

State-run Coal India Ltd (CIL) has sought government approval to raise the ceiling of investment for joint ventures from 30% of net worth to 50% as it seeks to diversify into aluminium production besides setting up a 1,200 MW joint venture power plant in Madhya Pradesh.

There is a condition that we cannot invest more than 30% of equity in JVs and others. We have already breached it because CIL also gets money through its subsidiaries. When our net worth increases, their investment also increases. So, in that way that 30% mark is already breached. We are seeking permission from the government. It should significantly increase. It is due to a structural problem. We should get at least 20% above that, CIL Chairman-cum-Managing Director Pramod Agarwal said.

We are thinking of two power plants. One at Mahanadi. Another plant in partnership with Madhya Pradesh Power Generation Co., in which we will have 50% share. Capacity of the Mahanadi plant is 1,200 MW. The other plant will also have a capacity of 1,200 MW. That will happen only after government has given permission (to increase investment cap beyond 30% of net worth).

“Apart from this Ammonium nitrate production may be an easy option because we consume 60-70% of the ammonium nitrate produced in the country. So, we can manufacture our own ammonium nitrate and consume it. That will derisk us (from supply concerns).”

Captive, commercial coal mines output up over 30% during AprilJanuary

Coal production by captive and commercial mines rose by 30.70 per cent Y-o-Y to 93.22 million tonnes (mt) during the April-January period in the current financial year ending March 2023.

To encourage companies to increase output, under commercial mining scheme, a rebate of 50 per cent on final offer is allowed for the quantity of coal produced earlier than scheduled date of production. Besides, incentives on coal gasification or liquefaction (rebate of 50 per cent on final offer) have been granted.

The country’s domestic coal production has shown impressive growth during the past few years with output increasing to 778.19 mt in FY22, achieving an annual growth of 6.47 per cent, the Ministry said. The rising trend of coal production has further gained pace in FY23, and the country’s total coal production recorded an impressive growth of more than 16 per cent Y-o-Y with an output of 698.25 mt during the April 2022 to January 2023 period compared to 601.97 mt in the year-ago period.

Most of auctioned coking coal mines to start production by 2025

Most of the 10 coking coal blocks that have been auctioned to the private sector in the last two years are likely to start production by 2025, according to the Coal Ministry. To augment the output of raw coking coal, a key input in the production of iron and steel, in the country, the ministry has auctioned 10 coking coal blocks to the

private sector.

These mines have peak rated capacity(PRC) of 22.5 MT. Domestic raw coking coal production is likely to reach 140 million tonnes (MT) by 2030. Also, CIL has offered eight discontinued coking coal mines, out of the total 30 discontinued mines, on an innovative model of revenue sharing to the private sector with a PRC of two MT.

The coal ministry has also identified four coking coal blocks and Central Mine Planning and Design Institute (CMPDI) also will finalise the geological report (GR) for four to six new coking coal blocks in the next two months. These blocks may be offered in the subsequent rounds of auctions for the private sector to further step up domestic raw coking coal supply.

India’s Reliance stops local petcoke sales, boosts imports –sources

Reliance Industries has stopped selling petroleum coke within India and boosted imports of the product to turn it into synthetic gas to power its refineries, according to two sources familiar with the matter and trade data.

Petroleum coke is a carbon intensive solid residue left over from coking units in oil refineries that break down residual oil into more highly valued products. Petcoke, as it is known, can be used as a coal substitute in both steelmaking and in power plants.

Reliance had been depending on liquefied natural gas (LNG) to run its refinery complex and selling the petcoke locally but it is now gasifying its petcoke amid rising LNG prices.

SCCL shipped 68 lakh tonnes of coal in January

Singareni Collieries Company Limited (SCCL) carried a record transport of 68.4 lakh tonnes

of coal in January breaking the previous record of 64.7 lakh tonnes of coal shipment achieved in March 2016.

Similarly, the highest over-burden of 16.67 lakh cubic metres was removed. This new record was set when 14.83 lakh cubic metres of overburden was cleared by offloading and 1.84 lakh cubic metres of OB was removed with the help of departmental machinery.

“A total of 1216 pallets of coal was transported from 11 areas at an average rate of 39 rail cars per day,” stated a press release from the company. With the majority of the coal transported to thermal power stations situated in Maharashtra, Karnataka, Tamil Nadu, Telangana and Andhra Pradesh, Singareni surpassed the coal shipment of 1186 pallets in the month of January.

How coal gasification can help India reduce its oil & gas import

With India targeting net zero emissions by 2070, the future of coal depends on coal gasification as the process generates less CO2 and it is also easy to capture CO2 produced during the gasification process. Coal gasification strategies consist of four major components, such as — making coal available for coal gasification projects, identifying suitable coal gasification technologies, including Carbon Capture, Utilisation and Storage (CCUS) and setting up coal gasification projects and market dynamics for the end-products.

The measures taken by the Ministry of Coal are expected to make coal available to sectors other than power, including for coal gasification. With a view to incentivise the availability of coal for coal gasification, the Ministry of Coal has also issued directions to CIL/SCCL to create a separate window under NRS Linkage Auction Policy 2016 for coal gasification projects for long-term supply with desired quality and quantity. Further, to ensure the availability of coal at a reasonable price, provisions have been made for a 50 percent rebate in revenue share for commercial

coal block allocatees when coal is supplied/ used for gasification projects.

Indian coal has inherent high ash and most of the gasification projects running outside the country, including in China, are based on lowash coal. Finding the right technology for coal gasification for Indian coal has been a challenge.

RAILWAYS

Railways adding 1,500 wagons every month to its fleet to carry coal

The railways has ramped up production of wagons, adding nearly 1,500 of them, or 30 freight trains, every month only for transportation of coal ahead of summer. Amid strong indications of early onset of summer and spike in demand for electricity, railway ministry officials said efforts are being made to ensure adequate and enough supply of coal to power plants and avoid situations like last summer when they had to cancel a large number of passenger trains for coal movement.

“The production of wagons has more than doubled and till January of the 2022-23 financial year, we have produced over 17,000 wagons and nearly 50% of these are meant for carrying coal. This is a priority area for railways. Besides accelerating the addition of more wagons in our system, there is a greater focus on giving approvals to all important projects related to coal movement expeditiously. We have adopted a corridor-based approach and ‘coal corridor’ is the most important one,” said a ministry official. India’s peak power demand is expected to touch 230GW in 2023 and it had touched 211GW in January, which was close to an all-time high at 216 GW in April, 2022.

Railways plans to create cement corridor

The Railways is planning to create a cement corridor to link factories manufacturing cement, clinker and fly ash for the seamless movement of these products, senior officials said. Officials said that the Railways is in talks with the Cement Manufacturing Association (CMA) to create a road map to link cement manufacturing factories in the eastern, central, Rajasthan and southern clusters.

According to the CMA, cumulative cement loading grew from 34.82 million tonnes in April-October 2020-21 to 45.38 million tonnes in AprilOctober 2021-22, a yearly growth of 30.33 per cent. Similarly, cumulative clinker loading also increased from 22.29 million tonnes in April-October 2020-21 to 31.09 million tonnes in AprilOctober 2021-22, a growth of 39.48 per cent.

During April-October 2021-22, the cement industry has been the fourth largest revenue generator for the Indian Railways. As of December 2022, Railways said that it has achieved the yearly milestone in freight transportation by crossing the 1,000 million tonnes (MT) mark.

SHIPPING

Critical port linking projects to get Rs 1 lakh croreGati Shakti push: Sarbananda Sonowal

The Centre has earmarked over 1 lakh crore for 100 critical port connectivity projects under the PM Gati Shakti Master Plan, according to minister for ports, shipping and waterways SarbanandaSonowal.

Sonowal's ministry is monitoring the progress of Sagarmala, an ambitious plan for improving port connectivity and developing coastal re-

gions. The initial plan comprised 802 projects, at a budget estimate of 5.4 lakh crore. Additionally, 567 new projects with an estimated cost of 59,000 crore were added during the last Sagarmala Apex Body meeting held in May last year.

“There is 1 lakh crore PM Gati Shakti Master Plan, which has given us further opportunities by bringing 18 infra allied ministries together to work under one single banner. For this, 75,000 crore will be invested, wherein 15,000 crore will be from private players, which is very encouraging,” he said.

India steel imports from Russia rise to eight-year high in AprilJan

India's imports of Russian steel rose to an eightyear high during the first 10 months of the financial year that began in April 2022, government data compiled by Reuters showed. India, the world's second-largest crude steel producer, imported 281,000 tonnes of steel from Russia between April and January, nearly five times higher than the same period a year ago, the data showed.

The rising imports are the result of shift in Russian steel trade flows to Asia after Western sanctions were imposed on Russia after its invasion of Ukraine last year. The change is displacing some traditional suppliers and domestic steel producers are raising concerns about potentially losing market share to the lower priced imports.

Moscow was the fourth-biggest steel supplier to India during the April to January period, emerging as one of the top five steel exporters to the country for the first time since the 2016/17 fiscal year, the data showed.

STEEL

Between April and January, about 72% of Moscow's steel shipments to India constituted hotrolled coil (HRC) and strips. Russia displaced Japan as the second-biggest supplier of HRC to India for the first time in at least eight years, the data showed.

Imports of steel minimal; domestic industry progressing tremendously, says government

The inbound shipment of steel is "very minimal", Steel minister Jyotiraditya M Scindia said amid industry flagging the issue of "cheap imports".

According to industry data, imports of finished steel rose by 21 per cent to 4.77 million tonnes (MT) in 2022 from 3.94 MT in 2021. AlokSahay, secretary general of Indian Steel Association (ISA), said the industry is undergoing the pressure of supply chain issues coupled with increasing raw material prices. ISA is the apex industry body of steel sector.

The prices of key raw material coking coal have registered a sharp increase of 55 per cent from USD 248 per tonne on December 1, 2022 to USD 345 a tonne on February 15, he said.

"Steel is exported to India by FTA (free trade agreement) countries at lower than their domestic prices, which is nothing but dumping. We have been repeatedly raising the issue of cheap imports with the ministry," Sahay said. Coking coal is a key raw material used in manufacturing of steel and India remains dependent on imports to meet over 85 per cent of its coking coal requirement.

Agreements with 26 companies signed under PLI scheme for specialty steel, says JyotiradityaScindia

Agreements have been signed with 26 compa-

nies for 54 applications under the production linked incentive (PLI) for specialty steel, Union Steel Minister Jyotiraditya M Scindia said.

“We had a PLI for speciality steel and that includes steel products with zinc. I report we have awarded 54 applications submitted from close to 26 companies (which will lead to) an investment of…Rs 30,000 crore, a capacity addition of 26 million tonne and employment generation potential of about 25,000 people,” Scindia said.

The top five steel companies — Tata Steel, JSW Steel, JSPL, AMNS India and SAIL — dominate the list of qualifiers under the PLI scheme for specialty steel. Besides, there are a few others like Gallant Metalliks, Kalyani Steels, ShyamMetalics Flat Products and Sunflag Iron and Steel who have been selected under the PLI scheme. The Union Cabinet in July 2021 approved a Rs 6,322-crore PLI scheme to boost the production of speciality steel in India.Some of the categories of specialty steel included in the scheme are coated/plated steel products, high strength/ wear-resistant steel, specialty rails, alloy steel products, and steel wires, and electrical steel.

India's Jindal Stainless expects exports to hit five-year high

India's Jindal Stainless Ltd expects its exports to reach a five-year high in the next fiscal year, buoyed by buoyed by increased shipments to Russia and its plans to enter markets in South America and the Middle East. India's biggest stainless steel manufacturer expects its exports to jump to 25%-30% of overall sales in the fiscal year beginning April, from an estimated 12% in the ongoing fiscal year.

Russian steel demand is recovering after Western sanctions over Moscow's invasion of Ukraine caused buyers difficulty in securing supplies. Jindal Stainless expects Russia's share in its overall exports to rise to 25% from between 15% and 20% now, he said, with 90% of payments for Indian steel made in euros and

some in the U.S. dollar. It had tried to persuade Russian steel buyers to trade in rupees. Apart from boosting its shipments to Russia, Europe and the United States, the company aims to enter markets in South America and the Middle East in the coming fiscal year.

Since Europe accounts for 40% to 50% of the company's total exports, the company said it has asked the Indian government to urge the European Union to review its import quotas and high tariffs that cur India's steel exports to Europe. Expressing concerns over Chinese dumping, or sales at an artificially low price. The Indian market is small, and there is severe dumping happening from China.

CEMENT

Cement demand to continue uptrend with 7-9% rise next fiscal: Crisil

The cement demand in the country is set for a third straight year of growth with a 7-9% jump to about 425 million tonne (MT) in fiscal 2024, while the outlook for operating margins remain clouded. The operating margins, which were under pressure due to elevated prices of key inputs such as coal and petcoke, will have a bearing on the credit risk profiles of players, according to a report by Crisil Market Intelligence & Analytics.

Cement demand grew 11% on year in the first 10 months of this fiscal, led by rapid execution in infrastructure projects and strong traction in the real estate and rural affordable housing segments. The momentum is likely to stay healthy in the remaining months of this fiscal as it is a seasonally strong period for construction activity across regions.

The next fiscal would again see the infrastructure and affordable rural housing segments propelling growth. The highest traction is expected

from roads, where the total outlay for the ministry of road transport and highways has risen by 25% on a year-on-year basis and the National Highways Authority of India by 14%. The outlay for affordable rural housing under the Pradhan MantriAwasYojana – Gramin (PMAY-G) has also grown 12.5% in a pre-election year.

Govt to look into cement sector plea to cut GST

Finance minister NirmalaSitharaman told the industry that suggestions for lowering the 28% goods and services tax (GST) on cement will be looked into as a step toward easing construction costs.

The minister said this in response to a suggestion made at a post-budget interaction organised by the Confederation of Indian Industry (CII). The industry suggestion was that lowering GST on cement could help both government infrastructure projects as well as projects by the private sector and by individuals.

A fitment committee is a panel of officers that reviews rate revision proposals for the federal indirect tax body before the Council members take them up. The suggestion comes at a time the Central government has scaled up its capital expenditure from ₹7.28 trillion in FY23 to ₹10 trillion in FY24 in the Union budget presented on 1 February.

GLOBAL

Asia coal process down as winter season passes

The coal prices and volumes are decreasing in Asia, on the back of easing Europe’s energy crisis and the passing of the winter season, as per Reuters. Prices of the main traded grades for coal used in power plants dropped to their lowest in months last week, and to the weakest in a year in the case of one of the major Australian varieties”, Reuters added.

Furthermore, Australian coal at Newcastle Port with an energy value of 5,500 kilocalories per kg, as assessed by commodity price reporting agency Argus, slipped to $129.87 tonnes in the

week to January 27, 2023, the lowest since the week of January 21, 2022, it noted. This grade of coal is most commonly purchased by Indian utilities and was the preferred Australian thermal grade among Chinese buyers prior to Beijing's unofficial ban on Australian cargoes, imposed amid a diplomatic dispute in mid-2020.

Despite the lifting of the Chinese ban, it is unlikely that buyers will flock back to Australian thermal coal, given the availability of inexpensive and similar quality coal from Russia. Last week, the higher quality 6,000 kcal/kg Newcastle grade went down, with the index settling at $307.47 a tonne, which is below the 31% record high of $442.89 reached in early September.

China's coal prices fall to 1 yrlow, clouding demand, and import outlook

China's thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faster than demand, analysts and traders said. High inventories in the world's top coal consumer are capping its appetite for imports, pressuring global prices. The slow recovery in China's coal consumption also points to a gradual rebound in power consumption and growth in the world's second-biggest economy.

Analysts forecast China's coal demand to grow 2% this year on resurgent industry and construction and to bring an extra appetite for imports, especially high-quality Australian coal after China partially eased a ban on imports from there. However, rising stocks at ports and utilities suggest a faster resumption of output at mines than downstream industries such as steel, cement, and chemical, can use, dampening market confidence in the near-term demand outlook.

Spot prices for thermal coal with a heating value of 5,500 kilocalories (kcal) at northern Chinese ports plunged to 980 yuan ($142.49) a tonne this week, a level last seen in early February 2022. Global thermal coal prices also slid, with Australian 5,500 kcal coal falling 10% to about $118 a tonne on the free-on-board (FOB) basis over the past two weeks, while Indonesian 3,800 kcal coal shed 17% to about $67 a tonne

China Boosts Australian Coal Imports

Chinese utilities and traders have stepped up purchases of Australian coal in February, encouraged by signs of further policy relaxation after trade partially resumed last month following a two-year hiatus. In early January, Beijing

gave permission to four government-backed firms, comprising steel giant Baowu Group and three state utilities, to ship in Australian coal, the first sign of an easing of the unofficial import ban in place since late 2020. The ban was imposed after relations between Beijing and Canberra turned sour over several political and public health matters.

A full resumption in trade between the world's biggest coal consumer and the world's No. 2 exporter could support global prices for the fuel used in power generation and steel production. At least 15 vessels hauling about 1.4 million tonnes of February-loading Australian coal are bound for China, according to shiptracking data from Refinitiv and Kpler.

Another more than 1 million tonnes of thermal coal have been booked to load in March, a senior trader with a state-run Chinese utility said. "Trades have picked up significantly over the past three days following (the) ministry's remarks," he said. A spokeswoman for China's Ministry of Commerce, responding to a query at a news conference last week about the process for importing Australian coal, said it was a normal commercial activity and that trades are processed via an automatic import license system.

Indonesia still considering coal HBA formula changes

Indonesia's energy ministry (ESDM) is continuing to study the possibility of revising the formula currently used to calculate the country's coal HBA reference price, with it aiming to have a new method in place before the end of this year.

The plan to update the current HBA formula followed concerns among Indonesian suppliers after a decoupling in the price of high-calorific value (CV) Australian coal compared with other grades and origins for much of last year. The HBA is based on GAR 6,322 kcal/kg coal with 8pc total moisture, 0.8pc total sulphur, and 15pc

ash. It is calculated based on the average of four coal price indexes the Indonesian Coal Index, Newcastle Export Index, GlobalCoal Newcastle Index, and Platts 5900 index in the previous month. It consequently tracks physical high-CV Australian and Indonesian prices closely.

Australian NAR 6,000 kcal/kg prices were assessed at $400.25/t fob Newcastle by Argus at the end of 2022, around 130pc higher than at the start of the year, although the market has since softened. Indonesian GAR 6,500 kcal/kg prices were assessed at $235.73/t fob Kalimantan at the end of 2022, up by around 60pc compared with the start of last year. The HBA is used to set the prices of different Indonesian coal products, as well as the number of royalties that companies need to pay to the Indonesian government before they are allowed to export their coal. .

Petcoke prices rising on growing demand while coal is falling as supply increases

As China reopens, oil is finding support, seeing a recovery in oil prices to surpass the US$85 mark. The warm winter in Europe and lower gas prices are taking off pressure on demand in the region. However, Russia’s discount is still in place for countries that do not sanction Russian gas supplies (China, India, and Turkey). Meanwhile, coal prices are falling as supply increases and demand is dropping as the fear of recession impacts markets. The price of API4 coal is US$171.

With the return of Indian buyers and the US weather and maintenance leading to a drop in supply, petcoke prices are also rising. The 6.5 percent S petcoke FOB contract sold at US$131 while the 6.5 percent S petcoke CIF ARA contract sold at US$143. Resistance is to be found at US$145, 180 and 215, while support is around US$125, 115, 100, and 85. Multi-year support is found at US$36.

The discount for 6.5 per cent S petcoke FOB sold at US$131 is at 39 per cent when compared with 2Q23 API4 coal sold at US$171. The CIF ARA 6.5

per cent S petcoke contract sold at US$143 is at a discount of 27 percent, when compared with 2Q23 API2 coal sold at US$165. In terms of freight rates, a sharp downturn is supporting FOB prices with the USGC-ARA price now at US$18.50.

Australia’s NSW finalises coal reservation policy

Australia's New South Wales (NSW) state government has issued final directions for its thermal coal reservation policy for domestic power generators. The total coal reserved under the scheme is 19.76mn t/yr, which is roughly in line with domestic generator demand. Of this, around 15mn t/yr is sold under long-term contracts and while covered by the reservation policy, will not be majorly impacted.

The remaining is spot volumes and will be covered by a combination of the other suppliers, with the bulk covered by Glencore, Yancoal, Whitehaven, and BHP from coal that could have otherwise been sold to the export market. All four producers continue to discuss the reservation policy with the NSW government, but it is unclear if this will have any impact on the final directions released on 16 February.

Each firm must have available the lower of either the percentage prescribed by the NSW government or the number of tonnes. This must be available up until 30 days before the beginning of the April-June quarter of 2023 and 60 days before each subsequent quarter until the end of 2024. All coal sold domestically must be at a maximum price of A$125/t ($86/t) for 5,500 kcal/kg thermal coal, with an equivalent per tonne price of A$0.02273/kcal/kg for coals with other specific energy. The state could provide compensation if coal mining firms prove that their cost of production is higher than the A$125/t cap.

Australian energy minister rules out ban on new coal mines

Australia’s energy minister has ruled out a ban

on new coal mines as part of the country’s overhaul of climate policy.“That’s not part of our agenda,” Chris Bowen said when asked directly about the prospects for a ban on ABC’s Insiders TV program. “It won’t be part of those negotiations.”

The government was elected on a pledge to end the country’s climate wars and last year passed landmark legislation mandating emissions cuts of 43 percent off 2005 levels by 2030. However, the bill left the detail on how the cuts will actually be achieved to future debate.

The overhaul of its carbon pricing policy, which aims to abate about 205 million tons by the end of the decade, is one of the first skirmishes. The so-called safeguard mechanism would cover about 215 entities that account for around a quarter of Australia’s total emissions. Highpolluting facilities would be forced to reduce pollution or pay costs. The Green Party, which controls a crucial block of votes that the government is courting for other legislative priorities, is trying to push the government to go further and rule out new coal and gas operations. They are also concerned about the role of using carbon credits to offset emissions.

BHP to sell more Australian coking coal mines

Australian resources firm BHP and Japanese trading house Mitsubishi plan to sell the 12mn t/ yrBlackwater and 2.5mn t/yrDaunia mines from their BHP Mitsubishi Alliance (BMA) joint venture in Queensland. BMA has launched a trade sale process for these lower-grade hard coking coal, pulverised coal injection, and thermal coal mines while retaining ownership of premium hard coal mines like the 6mn t/yr Peak Downs and 5mn t/yrSaraji. This meets with BHP's strategy to move to high-grade coking coal, which it sees as best placed to remain profitable in a transition to a low-carbon economy.

The planned divestment follows BHP's sale of its 80pc stake in BHP Mitsui Coal (BMC) coking and thermal coal joint venture to Australian firm Stanmore in May 2022.Blackwater and Daunia

produced 14.65mn t of BMA's 58.28mn t of coal production in the 2021-22 fiscal year to 30 June. The sale will cut BMA's production to around 45mn t/yr. BMA's Hay Point port facility near Mackay has a capacity of 55mn t/yr, although it only exported 46.3mn t in 2022.

Blackwater coal is usually shipped through Gladstone. But it is unclear if Daunia coal will continue to use the Hay Point facility or be shifted to the adjacent port of Dalymple Bay Coal Terminal if the sale goes through.

Bettercoal launches South Africa, working group

Bettercoal has announced the establishment of its South Africa Working Group – a memberled group focusing on coal in South Africa. The group was formed due to increasing volumes of South African coal coming into Europe, and the need for Bettercoal Members to ensure that there is due diligence monitoring in these changing coal supply chains. The group serves as a platform for Bettercoal to work with its members to better understand the context relevant to coal mining in South Africa.

Bettercoal has worked with its country working groups since 2018 to better understand countryspecific challenges and foster better relationships with all stakeholders in key coal markets. For example, the Colombia Working Group has been active since 2018 and been engaging with a variety of stakeholders on prioritised issues.

The newly established South Africa Working Group is also a recognition of increasing Bettercoal activity in the country, with the South African producer Canyon Coal recently starting their Bettercoal assessment journey. Wind and solar power generated more electricity in the EU last year than gas did. European countries were forced to accelerate their renewable energy capacity after Russia's invasion of Ukraine sparked a global energy crisis.

South Africa won’t abandon coal

President Cyril Ramaphosa says that abandoning coal as a fuel source is an idea that must be dispelled. South Africa faces a catch-22 where it must reduce reliance on coal to align with its Just Transition framework; however, is still heavily reliant on coal in light of the immediate energy crisis. Responding to the debate over the State of the Nation Address (SONA) on 16 February, the president said that coal-fired power stations still provide 80% of the country’s energy source.

As a result, he said that this will still provide the bulk of South Africa’s ‘base load’ supply into the future. “We are committed to a future energy mix that consists of a diversity of energy sources, including coal, renewables, nuclear, gas, hydro, storage, bio-mass and other forms of energy,” said Ramaphosa.

“Through the work of the Presidential Climate Commission, the Presidential Climate Finance Task Team led by Mr. Daniel Mminele, government departments and stakeholders, we have developed a clear, just and inclusive path towards a low-carbon economy and society,” said Ramaphosa. In the latter parts of 2022, Cabinet approved the $8.5 billion plan to move away from coal. The plan is made up of foreign climate finances pledged by some of the world’s richest nations to re-purpose and close coalfired power plants in South Africa..

Glencore declares N$121b dividend

Glencore PLC, the largest natural resources company in the world, has reported a record surge in annual profit, boosted by its coal and trading divisions, as it declared a US$7 billion (N$121 billion) dividend to its shareholders.In its preliminary results for 2022, released late last week, the group posted an adjusted Ebitda of US$6,4 billion – a 73% increase from 2021.

Glencore's core profit increased by 60% to US$34,1 billion, and US$17,9 billion from that amount was reported from coal production.

The mining giant says it has increased coal output from its own mining activities by 7% to 110 million tonnes. This was a major contributing factor to the 59% increase in adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) of US$27,3 billion (N$470 billion) from its industrial operations. Earnings from coal mining accounted for about two-thirds of total earnings.

Its coal guidance for 2023 is at the same level as 2022, at about 110 million tonnes, with a possible positive or negative variance of five million tonnes. The miner produced 1,06 million tonnes of copper in 2022, a 12% decrease from the previous year. The miner's South African thermal production of 16,4 million tonnes was an 18% decrease from 2021, due to the disposal of the Middelburg mine and the wet weather challenges that affected the mine.

Germany: Coal imports increase in 2022 amid Ukraine war

Germany increased its coal import by 8% last year, as it tried to cope with a shortage in the country's energy supply after Berlin stopped relying on Russian oil and gas due to Moscow's invasion of Ukraine. The country imported 44.4 million tons of coal in 2022, the Association of Coal Importers (VDKI) said in an evaluation covered by the German newspaper Bild.

Russia remained the top supplier of coal, despite sanctions imposed by the European Union in August banning the import of Russian coal to bloc members. However, Russian supplies stood at 13 million tons, which is a 37% decline from the year before. In second place came the US, with 9.4 million tons, a 32% increase from the year before.

Shipments arriving from South Africa and Colombia saw significant increases, standing at 3.9 million tons (278%) and 7.2 million tons (210%), respectively, according to the VDKI. Germany says it wants to be carbon neutral by 2045. In 2020, it announced it would stop burning the climate killer, gradually phasing out its coal-fired plants by 2038. However, sanctions imposed on

Russia last year due to its invasion of Ukraine shook Germany's energy supply, causing a return to an increase in the use of coal.

EU coal rebound smaller than feared in 2022 energy crunch

The EU's use of coal-fueled power rose last year as countries faced a shortfall in energy supplies related to Russia's invasion of Ukraine, but the increase was not as high as many feared, according to a report. That's partly thanks to a boost in renewable energy production, which generated a record 22 percent of the EU's electricity last year.

As EU countries scrambled to shore up energy supplies after Russia cut off gas flows following its invasion of Ukraine and the bloc imposed sanctions on Moscow's coal and crude oil, some turned to mothballed coal power plants to replace lost supplies. The move caused EU coalfired electricity generation to rise by 7 percent compared to 2021, accounting for 16 percent of EU electricity, but the situation "could have been much worse," said the report by think tank Ember.

The report points to a fall in coal generation in all four of the final months of 2022 mainly due to lower electricity demand. The 26 coal units brought back online across the bloc last year ran at just 18 percent average utilization between October and December, it says, while the EU burned through just one-third of the 22 million tons of extra coal it imported as a failsafe.

Russian mining sector targets Asian customers

Russia continues a re-direction of its hydrocarbons and minerals exports from Western states to the Asian region, as sanctions’ pressure from the West tightens. As part of these plans, particular hopes are put on coal exports to the region, where the demand for it remains high, especially due to big discounts, provided by Russian suppliers. Russia has already been able to increase its coal deliveries to South Ko-

rea, overtaking Australia – the main player in this market in the past.

At present South Korea imports about 2 million tonnes of thermal coal monthly from Russia and there is a possibility that the country’s dependence on Russian coal will only continue to grow. That will be also due to attractive prices, which are offered by Russian coal producers to their Asian and particular South Korean customers. At the end of December, 6,000 kcal Australian coal cost US$409.5 per tonne, compared to US$244 per tonne for Russian coal.

In the meantime, many Russian mining and metals’ companies are also considering China as one of the potential biggest sale market for them in the Asian region, although, according to a recent report, published by the Russian Aton investment company, there could be serious difficulties for Russian business during their expansion in China, despite the fact that the Chinese market is huge, (accounting for more than 50% of the global consumption of many metals including nickel and copper). China has a powerful domestic production, so imports account for only 25% of its consumption.

New Coal Company begins shipments in West Virginia

Allegheny Metallurgical Coal, a new company to be served by both CSX Transportation and Appalachian & Ohio, moved its first train of highgrade metallurgical coal earlier this month. The company, located along U.S. Route 119 between Buckhannon, in Upshur County, and Philippi, in Barbour County, moved the first train Feb. 8. Its loadout is designed to minimize loading time and traffic disruptions on the busy highway. Each train of 130 empty coal hoppers will cross Route 119 to enter the property and will be split into two equal halves.

After 65 cars are deposited on a siding, the other 65 empties will move through a continuous loadout. The motive power will then exchange the two cuts, load the second 65 cars, and reconnect the two halves. According to the company,

this entire process will require no more than 4 hours; the loadout design is considered innovative for West Virginia rail-haul operations.

Allegheny Metallurgical President Keith Hainer told the Elkins Inter-Mountain newspaper the system is “unique in West Virginia. This allows a 130-car train to cross Route 119 without having to stop. This increases the efficiency of filling the train cars and keeps traffic interruptions to a minimum so we aren’t disrupting commuters, buses, and other travelers along the road. We have explored many options to move this product in the safest manner, with the least amount of impact, and the best value and rail meets these criteria.”

99 percent of U.S. coal plants cost more to run than to replace with renewables, the study determines

It would be cheaper to build new renewable energy capacity than it is to continue operating nearly every existing coal plant in the U.S., a new report from Energy Innovation finds.

The nationwide median cost of existing coal power is $36/mW-h, compared to just $24/ mWh for new solar. The only cost-competitive coal plant to operate compared to building new renewables, Wyoming’s Dry Fork Station, is just $0.32/mW-h cheaper than new renewables.

“Coal is unequivocally more expensive than wind and solar resources, it’s just no longer cost-competitive with renewables,” Michelle Solomon, a policy analyst at Energy Innovation, told The Guardian. “There’s a huge opportunity here to invest in coal communities, build local economic resilience, and save money in the process.”

On average, the marginal cost for the coal plants is $36 each megawatt hour, while new solar is about $24 each megawatt hour, or about a third

cheaper. Only one coal plant – Dry Fork in Wyoming – is cost-competitive with the new renewables. “It was a bit surprising to find this,” said Solomon. “It shows that not only have renewables dropped in cost, but the Inflation Reduction Act is also accelerating this trend.”

Renewables Beat Coal In the US, Surpass Gas For First Time In Europe

The renewable energy juggernaut is gathering strength in virtually every nation on Earth. There are two reports out this week that highlight the extent to which renewables are outperforming coal in the US and methane gas in Europe by almost every metric, especially cost. Here’s a roundup of the latest renewables news this week. A report by Energy Innovation dated January 29, 2023 claims “99 percent of the existing U.S. coal fleet is more expensive to run compared to replacement by new solar or wind. Replacing coal plants with local wind and solar would also save enough to finance nearly 150 gigawatts of four-hour battery storage 60 percent of the coal fleet’s capacity.

“This research shows all but one of America’s 210 coal plants is more expensive to operate than either new wind or new solar. If the IRA’s new energy community tax credit is included in the equation, 199 of the 210 plants are more expensive to operate compared to local solar resources sited within 45 kilometers of the plant. Local wind resources are also cost-effective and readily available, with 104 plants having cheaper wind resources within 45 kilometers.

Michelle Solomon, a policy analyst at Energy Innovation, tells The Guardian, “Coal is unequivocally more expensive than wind and solar resources. It’s just no longer cost-competitive with renewables. This report certainly challenges the narrative that coal is here to stay. “Not everyone agrees. Coal lobbyists in particular would like to see their fat salaries continue for a while longer.

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MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE

Indicative Pet Coke Price

Indicative Coking Coal Price

Indonesian Coal News:

*The Energy and Mineral Resources Ministry has raised Indonesia’s annual coal production target to 695 million tonnes this year to cater to robust demand for the commodity. The country plans to export more than 74 % of the coal it mines this year, some 518 million tonnes, which the ministry said would mean record shipments. The respective production and export targets are up slightly from last year’s realized 687 million tonnes and 494 million tonnes, ministry data shows. The production realized last year

exceeded the ministry’s target of 663 million tonnes, even though miners retained output during a month-long export ban in January and experienced operational disruptions during the year due to heavy rains.

*Indonesia launched the first phase of mandatory carbon trading for coal power plants. This is an initiative by the country to boost renewable energy and achieve net zero emissions by 2060. The first stage of a carbon trading mechanism will cover 99 power plants with a total installed capacity of 33.6 gigawatts directly connected to

power grids owned by state utility Perusahaan Listrik Negara (PLN). Under the mechanism, power plants that emitted more carbon than their quota can buy carbon credits from plants with below-quota emissions or from renewable power plants.

Australian Coal News:

*Fitch Solutions expects Newcastle thermal coal prices to average $280 per tonne in 2023, down from the $US358 per tonne average of2022, Fitch Solution has said that global thermal coal consumption is expected to grow by 0.76 % year-on-year y-o-y in 2023, compared with the 4.5 % y-o-y growth achieved in 2022. According to the forecast for 2023 implies that prices are likely to get a boost from current levels in the coming months, as energy needs increase in summer and later during winter months.

*In a massive fall, Australian 6,000 kcal/kg NAR and 5,500 kcal/kg NAR thermal coal prices dropped by more than 40% in February and more than 35% in January respectively from September last year. The NSW government recently announced its plans to ask coal producers to reserve up to 10% of their output for domestic use in mid-January. However, it made changes for individuals who have longterm contract obligations. Under the policy, sale prices will be capped at $125/t ($87/t).

South African Coal News:

*South African High-CV 6,000 prices rose above 135 USD/t driven by the growth in European demand, logistical constraints and increased demand from Indian consumers. According to reports, exports through South Africa’s Richards Bay Coal Terminal (RBCT) dropped to 7.1 m /t in the first two months of 2023. In addition, last week the visit of the President of South Africa

to an event led to a traffic jam of trucks (about 2,000 units) on their way to the RBCT terminal. In this regard, the operator Transnet has sent a notice to shippers, asking them to suspend supplies for at least 48 hours.

*In South Africa, experts believe that the global energy crisis has led the coal value chain to gain momentum both domestically and globally. The challenges and delay in the arrival of alternative fuel sources will allow coal to stay for a longer period. The coal industry is working with Transnet to get the fossil fuel to the port as currently, the export of coal is a relevant and profitable business. The country has not been successful in terms of the growth of renewables as they are taking a long time to arrive. The country is also looking at innovative technologies to clean up its coal fleets.

European Coal News:

*Imports of Europe’s seaborne thermal coal are declining, and as per the estimation of Kpler, February will see arrivals of 6.61 million tonnes of coal, down from 8.16 million in January and 8.75 million in December. The sharp drop is the consequence of a mild winter and an adequate stockpile of natural gases limiting the need for coal-fired generation. However, it should be noted that structurally, Europe’s thermal coal imports have moved higher due to the RussiaUkraine war with imports already being reported at 12% which is higher compared to the same month in 2022.

*The EU's use of coal-fueled power rose last year as countries faced a shortfall in energy supplies related to Russia's invasion of Ukraine, but the increase was not as high as many feared, according to a report. The development is partly due to a boost in renewable energy production, which generated a record 22 % of the EU's electricity last year. As EU countries scrambled to shore up fuel supplies after Russia cut off

gas flows following its invasion of Ukraine and imposed sanctions on Moscow's coal and crude oil, some turned to coal power plants to replace lost supplies.

US Coal News:

*The fourth quarter of FY 2022-23 saw a drop in US coal exports by 4.7% from the prior-year quarter, as per S&P Global Market Intelligence data. The single largest buyer of U.S. coal in the quarter was India, which received 3.5 million tons of coal from U.S. producers, an increase of 25% over the 2021 fourth quarter. Other large coal buyers, including the Netherlands and Brazil, also increased deliveries of U.S. coal in the quarter. Coal producers have said that US export markets had proven lucrative in recent months.

*Industry experts in the US are of the opinion that coal has been on its way out for the last decade, but there is no way that it will disappear any time soon. In spite of market conditions and environmental regulations U.S. coal power has proven exceptionally hard to kill. The Biden administration is preparing for a spring offensive against coal plant pollution. The U.S. Energy Information Administration said last week that coal accounted for 20 % of U.S. electricity generation in 2022. In 2007, coal was the source of half the electrons on the U.S. power grid.

Pet Coke News:

*With the return of Indian buyers, the US weather, and maintenance leading to a drop in supply, petcoke prices are also rising. The 6.5 % S petcoke FOB contract sold at US$131 while the 6.5 % S petcoke CIF ARA contract sold at US$143. Resistance is to be found at US$145, 180, and 215, while support is around US$125,

115, 100, and 85. Multi-year support is found at US$36. The discount for 6.5 % S petcoke FOB sold at US$131 is 39 % when compared with 2Q23 API4 coal sold at US$171.

*Petcoke prices saw a sharp rise despite the declining coal prices. The prices were impacted by low supply and falling freight rates. China is awaiting the impact from coal and many cement buyers are increasingly turning towards relatively cheap coal as the discounts now are in the expensive zone. The USGC FOB 6.5 % sulphur (S) contract is up eight % MoM to $136, with the discount to API4 dropping from 39 to 25 %. The USGC CFR ARA 6.5 % S contract rose by 3 % MoM to $153.50, as freight rates dropped to $16.50 and the discount fell to 13 %.

Shipping Update:

*The Baltic Exchange’s main sea freight index fell as rates for larger vessels dipped to multimonth lows. The overall index for capesize, panamax and supramax shipping vessels, was down 22 points, or 3.9%, at 541, the lowest since early June 2020. The capesize index dropped 65 points, to over a five-month low of 317. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $537 to $2,630. The panamax index fell 18 points, or about 2.1%, to 830, its lowest since June 11, 2020.

*Shipments of Australian coal move to China in a sign of improving bilateral ties between the two countries. Over 630,000 tonnes of coking and thermal coal were loaded across six vessels in eastern Australia in the past two weeks bound for Chinese ports in late January and early February with Beijing further easing its informal coal ban. According to the data from S&P Global Commodities, vessels Tiger East and Magic Eclipse carried two of those consignments that arrived at their respective southern Chinese ports of Guangzhou and Zhanjiang.

OVERALL DOMESTIC COAL SCENARIO

Coal

SECTOR-WISE COAL DESPATCH (TILL FEB’23)

to Non-power Sector (in MT)