January 2023
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- By Sankar MukhopadhyayPublished on : 28.01.2023
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India’s reliance on coal is not likely to wean off quickly, instead recent trends and analysis suggest that the thrust on coal will remain sturdy primarily due to uncertainties in the global energy sector and supply chain disruptions due to the Russia- Ukraine war.
The dependence on coal-based thermal energy is expected to ascend despite the country’s vigorous efforts to achieve net zero emissions by 2070. If we were to focus on India’s power sector, the future of the coal- driven sector looks robust. Coal fuels more than 70% of India’s power generation and 2022 saw coal-fired power plants ramping up generation by about 10% to address higher demand.
A boost in economic activity and the heatwave during the first quarter of 2022 triggered an increase in power demand and the demand surge is anticipated to persist in 2023-24. As coal demand looks at continuing in the near future, there might come a time when the country will gradually have to cut down on its usage.
In the global arena, India’s stance on the development of coal-based power, especially in the context of reducing emissions from it, stands at a critical juncture. India is marching towards becoming a global leader in the area of climate change mitigation and must create a special place for itself to compete with countries leading the cause most effectively.
Along with understanding the relevance of a coal-ridden future, Coal India Limited (CIL) is leaving no stone unturned to commit itself to becoming a net zero energy firm. As a positive step towards diversification, the company has begun focusing on renewables as well. In its endeavor to meet the country’s coal demand,CIL registered a production growth and also increased its despatch in January.
Looking at the energy scenario in Europe, with limited carbon-free resources like nuclear and renewables, the continent witnessed a significant comeback of coal to supply electricity. With the global energy sector undergoing considerable changes and gas prices likely to remain volatile, the winds are more in favor of European coal-led power generators. While renewable energy plays a vital role in addressing energy security and affordability issues, the resurgence of coal will be imminent in the times to come as well.
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Does Coal-based Generation Have No Future?
Rising global temperature has put the environment under severe threat, and society is experiencing the apprehension of global warming with its possible odds. The rise in temperature and its snowballing effects on climate, agriculture, economy, health, and overall sustainability is a matter of immense concern today. Scientists, technocrats, economists, and policymakers are making efforts to stop turning the green world into a grey planet.
To overcome the disaster, the countries of the world joined hands to form a conference of parties (COP) in 1995. Every year in the annual conference COP, parties disseminate new ideas to identify some remedial measures to decelerate the rate of warming. The foremost idea is to reduce the emission of carbon dioxide in the atmosphere, the prime greenhouse gas.
CO2 is released when any hydrocarbon is burnt, hence thermal power is a major
source of CO2 generation. Therefore, putting restrictions on thermal power becomes significant. In COP 21, in Paris Climate Change Conference in 2015, a key decision was taken that all participating countries would try to reduce their CO2 production at a given target and prioritize green power. Similarly, India also declared in INDC (internally nationally determined contribution) that reducing CO2 emissions by 35-40% by 2030 and augmenting green power to 175 GW by 2022. This has developed an indirect pressure on the expansion of thermal generation.
In the beginning of 2023, a few more meetings of COP took place. Most interestingly in 2021 in Glasgow, the idea of phasing out of thermal generation was promulgated but India objected and coined a new word of phasing down of thermal generation considering the rising energy demand and meeting the demand with low cost and reliable thermal energy.:
• Achieve about 50 % cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030
• Create an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030
• Reduce Emissions Intensity of its GDP by 45 percent by 2030, from 2005 level
• Build capacities, create domestic framework and international architecture for quick diffusion of cutting-edge climate technology in India and for joint collaborative R&D for such future technologies
• Put forward and further propagate a healthy and sustainable way of living based on traditions and values of conservation and moderation, including through a mass movement for ‘LIFE’– ‘Lifestyle for Environment
It is to note that, even as the commitments have been updated, India has also taken a stand under the ambit of “differentiated responsibilities, equity, and nationally determined nature of climate commitments” that meeting the long-term goal of the Paris Agreement requires phase down of all fossil fuels and not phasing out use of fossil fuel to meet country’s energy demand.
It is evident that thermal plantsplay a big role in CO2 generation but what can be the best alternative in India? Moreover, is thermal plants are only responsible for CO2 production, can we not make a compromise, what happens when the focus is turned to transport sector, the vision is drifted to gas production and gas use. If such discussions are tabled without any preconceived notion, the logics may not be very convincing rather show that the decision of phasing out may appear as coercive measure to the developing countries like India, Africa and some more who neither have the economic strength to buy the best technologies for high-capacity storage or nuclear fuels nor endowed with the natural resources. So, for countries like India, thermal energy cannot have any provision of phasing out at the present situation. On the contrary, enough precaution must be taken to manage the environment and reduce CO2 production in thermal plant operation.
It is better to concentrate on the technical studies with a question that is India capableof managing the future power demand with green power only. Truly speaking, the answer is NO. Whatever be the renewable generation in India, it is impossible to run the power system in India without a stable source of power and in India it is thermal power.
Coal based power generation has been an important resource to meet country’s electricity demand. In past, coal-based power generation (both in terms of capacity and electricity generated) has had a dominant role in the power portfolio of the country. Even as at present, when India is galloping towards achieving 500 GW of renewable energy, the importance of coal-based
power generation cannot be unnoticed. As at 31-3-22 coal power generation with an installed capacity of 210 GW contributes 73% of total electricity generation of 1484 BU. Renewable generation (solar, wind, biomass and small hydro) on other hand stands with meager contribution of 12% in 1484 BU considering installed capacity of 109 GW.
A comparative chart depicting the role of coal in power generation in past decade is shown above. It can be inferred from the chart that the role of coal hasn’t changed. It is still the majority electricity generation resource for India. Though the alarming fact here would be dropping PLF of thermal power generation.
Falling capacity utilization of thermal power plants have many factors which need to be addressed. Some of the factors have been identified as under
• Low demand growth – Demand growth has been estimated at an CAGR of 5% in Draft NEP which is quite low. This is mainly due to mismatch in EPS survey data in past which has led to overcapacity and low offtake
• Poor financial health of Discoms – Discoms have been reluctant to bring out new long term PPAs due to financial burden of legacy fixed cost. Discoms have now been driven towards spot market which has become quite liquid in last few years
• Issues with coal supply – Recently, we have seen that there has been shortage of coal supply which has led to backing down of power plants
• Must-Run Status of RE generation and RPO targets – Policy directives to treat RE as must-run have led Discoms consider to back-down conventional generation to avoid penalties
Key highlights and takeaway from Draft National Electricity Plan 2022 is as under:
India, as stated in the earlier section, has committed to achieve 50 % cumulative electric power installed capacity from nonfossil fuel-based energy resources by 2030. This includes power from large hydro power plants. To achieve the stated goal, Central Electricity has also developed scenarios for 2027 and 2032 respectively, forecasting India’s cumulative installed capacity and electricity generation in power portfolio.
• Projected Electricity Demand estimated to be 272 GW in 2026-27 and 363 GW in 2031-32
• Electrical energy requirement on all-India basis including rooftop solar estimated to be 1874 BU in 2026-27 and 2538 BU in 2031-32
• Projected installed capacity estimated to be 622 GW in 2026-27 and 866 GW in 203132
o Installed capacity of Wind and solar to cumulatively hold 43% share in 2026-27 and 54% share in 2031-32
o Share of coal in installed capacity to reduce to 39% in 2026-27 and further reduce to 29% in 2031-32
• Electricity Generation estimated to be 1985 BU in 2026-27 and 2724 BU in 203132 (this excludes 92 BU electricity from BESS)
o Share of coal in electricity generation to be 58% by 2026-27 and 49% by 2031-32
o Share of wind+solar in electricity generation to be 26% by 2026-27 and 34% in 2031-32
• Capacity addition plans between 20222032 for coal estimated 42 GW which is 9% of total capacity addition of 471 GW planned
o Capacity addition plans between 2022-2032 for wind+solar estimated
372 GW which is 79% of total capacity addition of 471 GW planned
• Retirement of old thermal units planned between 2022-2032 is only 4629 MW
• Fund requirement of Rs. 28014 billion has been estimated for funding generation projects between 2022-2032
o Thermal generation projects have an estimated allocation of 10%. 72% has been allocated for wind+solar
The CEA Draft National Electricity Plan –Generation (Volume – 1) has been the latest update to the forecasts made by the central agency. To put in crux, the draft plan is in line with the earlier released Report on Optimal Generation Capacity Mix For 2029-30 (January 2020) by CEA. The Draft NEP 2022 also support the India’s vision of achieving 500 GW by 2030 if large hydro and pumped storage plants are considered, but the relevant answer to whether coal there is a ‘phase down’ of fossil fuel generation seems to be difficult. Considering the forecasts, an attempt to understand the impact on coal-based generation has been made in the following bullet points as under:
• Coal based electricity generation to still a major source of electricity in 2032 by supporting 50% of generation even when 372 GW of variable RE (solar+wind) is estimated to be installed within that period
o Variable R]riable RE is supporting 50%
• As per plan, there will be a ‘phase up’ and not ‘phase down’ of fossil fuel generation by 2031-32
o Coal based capacity to increase from 210 GW as at 31-3-2022 to 248 GW by 2031-32
• Meagre retirement plan of 5 GW of thermal based generation projects, show the importance of fossil fuel generation in the power portfolio
I. Coal power generation will remain in relevance for the next decade starting from 2022 for India. It will continue to be the major source of electricity generation
II. Ingress of variable RE generation in the system, would mean that coal-based power plants must operate in flexible mode to support Discoms commitment to honor muststatus of RE generation.
a. Though not considered in the Daft NEP, fund allocation is required for R&M activities for plants working in flexible mode as it leads to wear & tear of parts and equipment
b. Thermal power generators must also consider 3-shift operations with accurate forecasting and scheduling techniques for a power plant. Lessons from international practice can be followed for reference
c. Regulatory construct would be necessary to allow pass-through of costs associated with 3-shift operations, part-loading of power plants and utilization of AI and ML based forecasting tools
d. Regularization of Operational processes and due compensations would also be required from Ancillary Services Market (especially Tertiary reserves) to provide financial signals to coal-based power plant operators
on reliability and efficiency of the thermal plants.
III. Coal Based power plants must not follow with their legacy PPAs after expiry of the contracts even at the cost of forgoing a fixed cost compensation with Discoms and be open to wholesale market participation on an independent basis. Liquidity in wholesale market and accurate power sale strategy of coal-based power should allow appropriate recovery
IV.
a. This will also allow equal opportunity for Discoms to freely procure power from market
b. Coal-based power will also focus on efficiency-based production
to achieve incentives with financial compensation.
About the author:
Mr SankarMukhopadhyay is an electrical engineer with an experience of three decades in power sector. He worked in thermal generation, distribution, planning and business development areas in a private sector large power utility. He also headed Training and Consultancy services for a long period. Presently he is a visiting professor of Energy Management and Sustainability in the JadavpurUniversity and attached to various chamber of commerce on advisory capacity. Mr Mukhopadhyay is a chartered engineer of the European Council and a Certified Energy Auditor.
Consumers:
1. Submission by Power Utilities in North India for considering shortest distance between NCL and powerplants
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.
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.
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.
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.
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.
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.
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
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. Submission by NRS
consumers to supply coal up to 100% of ACQ from SECL with effect from December 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.
Request has been made to SECL for enabling supply of coal up to 100% of ACQ with effect from December 2022 onwards..
India's power generators have struggled to rebuild coal stocks so far this winter because consumption is rising faster than the rail network can deliver more fuel from the mines. Fuel stocks are only slightly higher than this time last year. Stocks at power producers are equivalent to less than 12 days of consumption, up from 9 days this time last year but much leaner than 18 days in 2021 and 19 days in 2020.
Inventories normally accumulate from October to March, when air-conditioning and refrigeration demand is lower, and deplete from April to September, when cooling demand is high and mine output is disrupted by monsoon rains. But
stocks have increased by only 2.3 days since September 2022, leaving generators poorly positioned to meet higher demand when temperatures climb from March and April onwards.
Mine output was up by around 18 million tonnes or 9% over the October-december period. But the coal actually despatched to power producers by the railways increased by just 1 million tonnes or less than 1%. The number of trains despatched in October was particularly low and the system proved unable to recover lost deliveries in November and December. As a result, the amount of coal consumed by power generators has exceeded the amount arriving from domestic mines by between 100,000 and 300,000 tonnes per day.
India's power ministry has asked utilities to import 6% of their coal requirement until September, according to a letter seen by Reuters, warning that domestic supplies could be curtailed if import targets are not met.Coal accounts for more than 70% of India's power generation, with coal-fired plants accounting for more than three quarters of India's use of the polluting fuel.
India expects domestic coal supply of 392 million tonnes during the six months to the end of September and expects coal availability to fall short of Demand by 24 million tonnes, according to the letter sent to heads of energy.
Departments of states and managing directors of all utilities. "Energy demand has increased sharply and it is expected to remain at increased level during first half of 2023/24,"a power ministry official said in the letter.India's coal-fired power output has increased much faster than any other country in the Asia Pacific since Russia's invasion of Ukraine, derailing efforts to cut emissions.
Power deficit in the country rose slightly to 0.6 per cent in April-November this fiscal year, while electricity demand has witnessed around 11 per cent jump in the said period, indicating buoyancy in the economy. The latest government data available showed that the power deficit in the country stood at 5,691 million units (MU) in April to November 2022, while it was 4,058 MU in the same period a year ago.
Experts are of the view that power deficit happens mainly because of technical reasons. They opined that India is a power surplus state but sometimes discomsdont have funds to afford round-the-clock supply of electricity.
The power producers supplied 10, 12,249 MU
in April-November 2022, against the demand of 10, 17,940 MU, which resulted in a power deficit of 0.6 per cent. Similarly power producers had supplied 916,529 MU in April-November 2021, against the demand of 920,587 MU, which had resulted in a power deficit of 0.4 per cent. The data showed that the electricity requirement or demand has increased by around 11 per cent in April-November 2022, compared to the same period in 2021.Power consumption has also increased by over 10 per cent to 10, 12,249 MU in April-November 2022, from 916,529 MU a year ago.
Indian Energy Exchange (IEX) has reported an over 4 per cent decline in its consolidated net profit to Rs 77.21 crore in the December quarter. The consolidated net profit of the company stood at Rs 80.73 crore in the year-ago period, according to a regulatory filing.
Total income also fell to Rs 117.34 crore in the October-December quarter from Rs 130.77 crore in the corresponding period a year ago. An IEX statement said that in the third quarter of 2022-23, it achieved electricity trade volumes of 23 BU (billion units) which is a growth of 9 per cent quarter-on-quarter.
However, the electricity trade volumes declined 2 per cent in the December quarter on year on year basis. The electricity trade volume was 21.2 BU in July-September 2022 and 23.5 BU in October-December 2021. The trade volumes were impacted largely due to supply-side constraints, led by high prices of e-auction coal.
Continuing high spot e-auction coal prices led to the average clearing price in the Day-ahead market at Rs 4.56 in Q3 FY2023, while lower from Rs 5.40 in the previous quarter, but still high to provide optimization potential for Discoms and Open Access consumers.
Peak power demand touched a record high of 6 per cent on-year, as several regions in the North reeled under a severe heatwave. The demand peaked again by 12 per cent on-year again in December 2022 due to increased heating requirement and continued momentum in manufacturing activities.
According to CRISIL, the demand is expected to grow a healthy 6-7 per cent on-year in the fourth quarter. Generation in the third quarter of fiscal 2023 was affected by seasonally lower output from renewable sources, leaving costly thermal power to service incremental demand. Due to a shortage of supply from hydro and wind sources by 50 per cent, power distribution companies had to increasingly depend on the short-term power market to fulfill the demand.
Elevated coal prices in spot e-auctions, along with winter heating demand, increased onmonth price 17 per cent during December 2022. The continuing rise in power demand in January on account of high heating demand and robust industrial activity further pushed up prices to Rs 6.79/ kWh as of second week of January. Pressure on prices was exacerbated by an all-India energy shortage, which rose a a whopping 429 per cent in the first ten days of January over December 2022.
The Centre is likely to double the allocation for the revamped distribution sector scheme (RDSS) to around 15,000 crore in the union budget for 2023-24 from 7,565.59 crore in the current fiscal year, as it seeks to streamline and modernize the power distribution sector, two officials aware of the matter said.
The increase in budgetary allocation is aimed at reducing aggregate technical and commercial (AT&C) losses, and the gap between average
cost of supply per unit of power and the average revenue realized per unit by increasing the efficiency of the distribution sector.
In FY22, AT&C losses of power discoms was at 17%. The government aims to bring it down to 12-15% by 2024-25. AT&C losses have come down to 17% in 2021-22 from 21% in FY21, and the gap between the average cost of supply and the average realizable revenue fell from 0.69 per kilowatthour (kWh) in FY21 to 0.22 a kWh in FY22. Under RDSS, the Centre aims to bring it down to zero by FY25.
The five-year scheme has an outlay of 3.03 trillion, from FY22 to 2025-26, including an estimated government budgetary support of 97,631 crore. State-run power sector lenders, Power Finance Corp. Ltd, and its subsidiary Rural Electrification Corp, are nodal agencies for implementing the scheme.
Power regulator Central Electricity Regulatory Commission (CERC) has decided to fully compensate the power producers running imported coal-based plants for higher running costs required for supplying electricity under forced circumstances. The CERC order will come as a relief for imported coal-based power plants which ran to full capacity under the directions of the Ministry of Power for meeting demand.
The CERC in an order on January 3, 2023, said, "In order to ensure that the Petitioner maintains and operate its plant to generate power for supply to the Procurers in compliance with the directions of the MoP (Ministry of Power) under Section 11(1) of the Act, the Commission under Section 11(2) of the Act is required to compensate the Petitioner to cover the cost plus a reasonable margin of profit." The order was passed by the CERC on a petition filed by Tata Power Company Ltd.
The MoP in its letter on May 5, 2022 issued directions under Section 11 of the Electricity Act asking the imported coal-based power plants
to operate and generate power to their full capacity.In cases where the power plants have PPA with multiple distribution companies, and if one distribution company does not schedule any quantity of power according to its PPA, that power will be offered to other beneficiaries and remaining quantity will be sold through Power Exchanges, the ministry had directed.
Delhi Electricity Regulatory Commission (DERC) has withdrawn its 2018 advisory to the Delhi government that power subsidy should be granted to the eligible beneficiaries through direct benefit transfer (DBT) mode, as done in the case of LPG cylinders.
The advisory was withdrawn on December 24, just a day after deputy chief minister Manish Sisodia wrote to DERC saying he had received a file from the power department suggesting that the government should shift to the DBT mode on power tariff subsidy and wanted the commission to re-examine the issue.
Sisodia, who also holds the charge of power department, had also received a note from the chief secretary under Rule 57 of the Transaction of Business Rules, 1993, which mandates the senior-most officer of the government to bring it to the notice of the minister-in-charge, the chief minister and the lieutenant governor if there is any material departure from the rules.
Interestingly, DERC re-examined the issue and withdrew its earlier advisory of switching to the DBT mode of February 2018 just a fortnight before the term of the former chairman of the commission was ending.
The power ministry may provide financial support to state-owned gas-based generation com-
panies to make up for unrealised input costs so that they can produce and sell electricity in the peak demand season for grid stability.
Much of India's gas-based power generation capacity, which stands at 24,800 MW, is idle because high gas prices have made electricity generated at gas plants generally more expensive than coal, hydro and renewable-based power, making it hard for these plants to find buyers. Now, the government plans to fund unrealised costs when they sell electricity, likely using the Power System Development Fund (PSDF). The fund from PSDF can be used as a sort of support to gas-based power that may be used to maintain grid stability during peak demand.
To meet the upcoming peak demand, which is likely to cross 230 GW in April, the government is planning to use increased gas-based electricity apart from ensuring sufficient coal stocks. The critical part of a day in the peak season is the non-solar hours when the maximum pressure is on coal and gas-based generations.
India plans to add 76 gigawatts (GW) of utilityscale solar and wind power by 2025, leading to savings of up to $19.5 billion a year (Rs. 1,588 billion) versus burning coal, according to new research from Global Energy Monitor. The move will also put India in the top seven countries globally in terms of prospective renewable power.
This build-out can avoid the use of almost 78 million tons of coal annually, or roughly 32 GW in coal power plant capacity, which is more new coal capacity than the country has added since 2018.
According to the report, the annual savings in
India can skyrocket if the coal to clean switch matches the country’s ambitions. India plans to add an additional 420 GW of wind and solar power by 2030, which would increase the annual savings from avoiding coal power to more than US$58 billion, with total savings reaching US$368 billion by 2030.
Costs for solar and wind power continue to plummet, and compared to volatile fossil fuel prices, renewables present a far better option for building new energy infrastructure, ," said Shradhey Prasad, Project Manager for the Global Wind Power Tracker.
Prompt action on cheap Chinese imports of renewable energy equipment and the central government’s Productivity Linked Scheme (PLI) to encourage local manufacturing have resulted in the country emerging as a major exporter, minister for power & new and renewable energy, Raj Kumar Singh said in DAVOS 2023.
“Up to 80 per cent of the cells and modules were coming from China. They (China) tried dumping their products here. We put anti-dumping duties. When that didn’t work, we put 40 per cent duty and introduced a mechanism for an approved list of models and manufacturers. As a result, the bulk of the country’s requirements for cells, modules, etc., were increasingly being met by domestic manufacturers” he said.
He said the capacity was already 25 GW for modules, with an additional 11 GW capacity expected to be added through polysilicon and module manufacturing. Energy storage is the largest pre-requitite for energy transition. Given the high cost of storage technologies, his ministry had come out with a tender for 1000 MW hours of storage, the largest such bid globally.
In a bid to provide relief to solar power projects stuck amid a shortage of modules, the Centre has extended the deadline for completion of projects for which bids were finalized before the announcement of the basic customs duty on modules.
The ministry of new and renewable energy said the projects for which bids were submitted before 9 March, 2021, can now complete the project by March 2024. On 9 March, 2021, the Centre announced that from 1 April, 2022 imported solar PV modules would attract a basic customs duty (BCD) of 40% and imported solar PV cells would attract BCD of 25%.
The government has also come up with production linked incentive scheme to encourage the domestic solar module industry. However, with the domestic industry yet to pick pace and the high import duty and the Approved List of Modules and Manufacturers (ALMM) have impacted the availability of modules in the country and affected ongoing projects. The solar power industry is already reeling from a sharp rise in module prices in the last two years.
Nobel Laureate AmartyaSen emphasized on the importance of taking a cue from other countries to become more energy-efficient by adopting small-scale solar solutions, while speaking at a panel discussion on “(Em)Powering India, Solar Solutions,” organised by Pratichi Trust at the AmartyaSen Research Centre in Salt Lake.
Sen spoke about lack of awareness in India about use of solar energy. He also said that there was a deficit in supply of natural resources like natural gas and that more awareness was needed on this. Sen said we should see what others were doing in this field and that there was nothing to feel ashamed of, mentioning two ways in which India can decide on making better and more efficient use of solar power. India should do more research on this and learn from others who are ahead of us in this field.
Sen asserted that China and Europe are much
ahead in this field. “We shouldn’t shy away from seeking help from other countries, knowledge grows when it is shared and discussed among others,” he said.
The work of installing three floating solar power plants in water reservoirs in Madhya Pradesh with a total investment of Rs 7,500 crore will start soon, state officials said.
The work on three floating solar power projects at a total cost of Rs 7,500 crore will start soon, officials said. These projects will be in addition to the 600 MW floating solar power plant in Omkareshwar dam area of Khandwa district.
Memorandums of Understanding (MoUs) worth a total of Rs 16,000 crore in the field of energy and renewable energy were signed at the summit. Madhya Pradesh's New and Renewable Energy Minister Hardeep Singh Dang assured the investors that they will not face any problems if they set up their units in the state.
From January 2022 till December 2022, approximately 13,956 MW solar capacity and 1,847 MW of wind capacity was added in India. This is about 17.5% and 26.6%, respectively, higher compared to 2021.
In terms of cumulative installations, according to the data released by Ministry of New and Renewable Energy (MNRE) till December 2022, India’s RE installation capacity reached 120.85 GW. Solar energy contributes for approximately 52% share in the total RE segment, making it the major contributor followed by wind energy (35%), Bio Power (9%) and Small Hydro (4%). Share of solar has increased by 5 percentage points in last 1 year.
From Jan-Dec 2022, about 11.3 GW of new utility-scale solar capacity was added in India. Compared to Jan-Dec 2021 period, installations are about 47% higher.
In the rooftop solar segment, about 1.9 GW is added in the last 12 months, this is about 42% lesser than 2021 installations. While in offgrid/ distributed solar segment, nearly 700 MW was added which is about 50% lesser than 2021 installations.
Jaipur - Three units of the hydro power plant at RanaPratapSagar Dam in Rajasthan that submerged nearly four years ago have been made operational by the Rajasthan RajyaVidyutUtpadan Nigam Ltd (RVUNL). The department is generating 30-lakh units of electricity per day after making these units operational.
In 2019, the power units were completely submerged in Chambal water and it was considered impossible to generate power again from these 50-year-old units. However, after engineers put untiring efforts, power generation started. One more unit having a capacity to generate 10.32 lakh units of electricity per day will be started soon, a senior official said.
RanaPratapSagar Hydroelectric Power Station is the oldest power station in Rajasthan. The 172 MW (43 MW x 4 units) hydroelectric power station was established on Chambal river in 1968 under the joint Chambal Valley Project of two states, Rajasthan and Madhya Pradesh. It was inaugurated by then Prime Minister Indira Gandhi.
India is planning a hydropower project on the strategically important Siang River in Arunachal Pradesh of 11,000 MW capacity, people aware of the matter said. The purpose of the project, apart from generating electricity, is also to con-
trol floods, state-owned NHPC Ltd has submitted a pre-feasibility report for the Upper Siang Multipurpose Storage project.
The project, spearheaded by the ministry of jalshakti, will aim at live storage of 9 billion cubic meters of water. The report on the project has been sent to the Central Electricity Authority for approval.
The cost of setting up a hydroelectric project is generally 6-10 crore/MW, and the gestation period for such projects is usually over nine years, depending on the size and the works. Siang is the most important river in Arunachal which also forms the main trunk of river Brahmaputra
Indian power producer Torrent Power is keen on buying a 1.1-GW portfolio of wind and solar projects from compatriot ReNew Energy Global Plc. Two sources familiar with the matter have said that Torrent Power has made a non-binding offer for 350 MW of solar photovoltaic (PV) and 750 MW of wind projects at an equity value of USD 450 million (EUR 422.8m) or an enterprise value of USD 1.2 billion. Talks regarding the valuation are reportedly still in progress.
ReNew’s gross renewable energy portfolio across India amounted to 13.4 GW at the end of September 2022, including commissioned and committed projects.
In November 2022, the Mint wrote about the company’s plan to divest its operational, clean energy capacity under an initiative aimed at gathering funds for the construction of new green energy plants.
India has been pushing for alternative fuels and has repeatedly declared its desire to adopt hydrogen in order to meet the net-zero emission goal. With enormous potential to generate green hydrogen, India can become the market leader. As per the Centre India is prioritizing production of green hydrogen from biomass, hydrogen from water and from organic waste.
India, with the contribution of private players, can achieve 25GW of manufacturing capacity of electrolysers by 2028. A NITI Aayog report says that India can stop putting out 3.6 gigatons of CO2 by 2050 by using green hydrogen. Therefore, it is crucial for both the Indian government and the private sector to explore green hydrogen options to manufacture vehicles.
British-origin company Morris Garages, or MG, unveiled India's first ever hydrogen car and has confirmed that they were ready to mass produce hydrogen vehicles and were waiting for the government's go-ahead.
Sensing a huge opportunity in the global semiconductor market, India has set in motion an ambitious plan to become a key supplier for the world with the government itself putting in USD 10 billion, Communications Minister AshwiniVaishnaw said. The minister said there is a very large market that requires semiconductor and India has a huge potential in terms of infrastructure, talent pool and technology.
We see a huge potential for India to become a key semiconductor supplier for the entire world, that too for the latest requirements including for electric vehicles and for all cutting edge technologies. We are convinced that the demand is going to be huge," he added.
"The industry is going to double in size to USD 1 trillion in the next 6-7 years with the growth rate set to accelerate in a big way," he added.
The government said that it has set a coal production target of more than one billion tonnes (BT) for the next financial year. Of the said target, state-owned CIL has been given the task to produce 780 MT of coal, followed by 75 MT for Singareni Collieries Company Ltd (SCCL) and 162 MT for captive and commercial mines.
A total of 290 mines are operational in Coal India
Ltd (CIL) out of which 97 mines produce more than one MT per year. For all 97 such coal mines, issues of land acquisition, forest clearance, environment clearance, rail connectivity and road connectivity have been discussed and timelines fixed. With continued effort of coal companies, out of 97 coal mines, there are no pending issues in 56 mines. Only 41 mines have 61 issues, for which continued co-ordination and monitoring is being carried out by top management of coal companies with concerned state government authorities and the central ministries.
CIL produced 622 MT of coal during FY22 and 513 MT have been produced so far in the cur-
rent financial year. It is expected that CIL will surpass the target of 700 MT fixed for current fiscal and accordingly will achieve 780 MT for the year 2023-24..
In anticipation of yet another high-demand season for electricity during April-June, the central government and state-run Coal India Ltd are considering revising the price of coal for the power sector and other industries that consume the fossil fuel.
“Prices are mostly market-driven for commercial, captive and imported coal. They are notified for the power sector. High-level talks have taken place. The revision would depend on several factors," said a source. The talks come against the backdrop of an increase in input costs over the years, with an accelerated hike in the past two years. In the past one-year, international coal prices have surged to record levels.
“Coal India has kept prices unchanged for five years now, despite the increase in various cost inputs, especially diesel and explosives. Even in this backdrop CIL’s PAT (profit after tax) for H1 was at a record high," said a Coal India official in response to an emailed query.
As part of its plan to increase production, Coal India Ltd (CIL) has identified 30 closed coal mines with substantial coking and non-coking coal reserves that can be reopened. CIL is planning to increase production to meet the increase in demand.
According to Pramod Agrawal, Chairman, CIL, these mines would be pursued on a revenuesharing basis with private participation. “We have floated tenders for reviving 20 such mines and efforts are on to start them at the earliest. We are also speeding up the tendering for the remaining mines,” Agrawal told Business Line.
The state-owned miner, which had sustained
a double-digit growth so far during the current fiscal, is hopeful of achieving its targeted production of 700 million tonne (mt) by the end of FY23, clocking over 12 per cent growth over the high base of FY22 and 78 mt jump in volume terms. At a 10 per cent growth rate, CIL is hopeful of touching a production of 770 mt in FY24.
The outstanding dues of the power sector for the coal supplied by the mining PSUs rose by 10 per cent on a M-o-M basis to Rs. 19,180 crore at the end of December 2022, of which the majority is owed to Coal India (CIL).
According to the latest data by the Coal Ministry, power generating companies owed 15,387 crore to the mining behemoth, while 3,793 crore were the outstanding dues of Singareni Collieries Company (SCCL).
With respect to the country’s largest coal miner, the outstanding dues on a month-on-month basis were higher by 5 per cent from 14,631.15 crore in November 2022. Similarly, the dues of SCCL were higher by 37 per cent from 2,764 crore during the same review period. CIL’s outstanding dues during December have been the second highest during the 2022 calendar year, after July. The dues have been inching up since November. The dues kept growing during May (13,825.20 crore), June (15,252.20 crore) and hit the highest so far in 2022 during July at 15,824.14 crore. The outstanding to CIL started to decline from August (15,143.31). .
The government has allocated three more coal mines under commercial mining to the successful bidders.With this, allocation orders have been issued for 48 coal mines so far having a cumulative peak rated capacity 89 million tonnes per annum (MTPA) under commercial mining.
Representatives of successful bidder received allocation orders from Additional Secretary
(Coal) M Nagaraju who stressed on participation of private sector for contributing towards energy security, the coal ministry said in a statement. The cumulative production capacity of the three blocks mines is 3.7 MTPA and its geological reserves is 156.57 MT.
These mines are expected to generate an annual revenue of Rs 408 crore and will attract capital investment of Rs 550 crore. It will provide employment to 5,000 people. The government launched the sixth round of commercial coal mines auction in November and has put on block 141 mines.
India is the world’s second-largest producer of crude steel. Therefore, it needs a steady supply of coking coal. Currently, India imports about 90% of its coal requirement. However, several initiatives are underway to increase local production of raw coking coal to 140 MT by 2030. In fact, the GoI has already identified four coking coal blocks in a bid to step up production.
For now, trade relations between Australia and China are sketchy at best. Therefore, Australia has started looking for other markets to ship commodities like ore and coking coke, one such market being India. However, over the past few months, the world has learned that many Indian steel mills have replaced “costlier” Australian coking coal with alternatives.
India is also banking on the state-owned Coal India Ltd (CIL) which has planned to increase raw coking coal production from existing mines by up to 26 MT. The company has identified nine new mines with a Peak Rate Capacity of about 22 MT. It hopes to step up capacity by financial year 2024-25.
Altogether, Australian coke imports dropped over 18% from April to November to 23.6 million tons (MT). Year over year, this represents a drop of 5.3 MT. In the same period, imports to India from Indonesia, Russia, and the US increased by 187%, 138%, and 163%, respectively..
The coal ministry is planning a policy framework to incentivise private sector companies for developing coal-gasification projects. The policy, aimed at providing capital subsidy, tax exemption and assured availability of coal, could be ready in two months, a senior government official said.
While the current coal production in India is somewhat in line with demand, it is expected that with the augmented production at commercial coal mines, the supply of the fuel will increase in the next couple of years.
The government had launched a mission document for coal gasification of 100 million metric tonnes by 2030 since it is considered a cleaner option compared to burning of the fuel. The total mines auctioned for commercial sale of coal, under various stages of development, have a total production capacity of 600 million metric tonnes a year.
Currently, the production from the operational commercial coal mines is around 100 million metric tonnes, the official said. The production is expected to improve to 160 million metric tonnes in the financial year 2023-24 and 250 million metric tonnes in FY25, he added.
State-run miner Coal India Ltd (CIL) plans to invest around 42,600 crore in low-emission infrastructure for fossil fuel mining and green energy to help India achieve its net-zero targets, said the company’s chairman and managing director Pramod Agrawal.
Considering the growing criticism of coal use, Agrawal said CIL plans to invest 24,000 crore in first mile connectivity (FMC) projects in three phases, including 10,500 crore in phase I involving 35 projects, which will enable mechanized transportation of 415 million tonnes of coal. “We have invested very heavily on evacuation. Mechanized evacuation was just 120 million tonne in Coal India (till a few years back). By De-
cember 2024, it will increase to more than 550 million tonnes," he said in an interview.
In the second phase, the company will take up nine FMC projects with investments of 2,500 crore by FY25 which would handle the mechanized evacuation of 57 million tonnes of coal. Seventy more projects have been identified in the third phase which would require an investment of 11,000 crore.
Singareni Collieries Company Limited (SCCL) Chairman and Managing Director N Sridhar said the company would reach the target of 100 million tonnes of coal production in the next five years.
Speaking after unfurling the national flag on the occasion of the 74th Republic Day at SingareniBhavan here, Sridhar said the Singarenicompany had achieved a turnover of Rs 26,000 crore last fiscal year and the current fiscal year it was moving towards achieving a turnover of Rs 34,000 crore with production of about 70 million tonnes of coal.
As part of Atmanirbar Bharat, the Centre is planning to stop foreign coal imports in the next three years and has set a coal production target of 1200 million tonnes for public companies like Coal India and Singareni, he said, adding that keeping this in mind, Singareni would start 10 new projects in the next five years to meet the coal demand of the thermal power plants in the country.
Hardeep Singh Puri
Work is in progress to set up Coal-to-Methanol plants in the country using indigenous technology, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said. BHEL (Hyderabad and Trichy), Thermax, and IIT Delhi are working on the project, the Union minister said while inaugurating the demo run of an Inland Water Vessel powered by Methanol blended Diesel (MD15) on
The low-carbon boat ride was done on a 50-seater motor launch marine vessel named 'SB Gangadhar' by Puri and Union Minister of State for Petroleum and Natural Gas RameshwarTeli. Methanol is a cost-effective alternative marine fuel, less expensive than other marine fuels and is economical in terms of developing shoreside storage and bunkering infrastructure, Puri said. Assam Petrochemical Limited (APL), Namrup, currently produces about 100 TPD of Methanol and is implementing a new project for the production of 500 TPD of Methanol, Puri said at the event, organised as a part of the run-up to the India Energy Week 2023 (IEW 2023) to be held in Bengaluru from February 6 to 8 next.
With three months remaining in the current fiscal year, Indian Railways has already surpassed its total earnings of financial year 2021-22 (FY22), the railway ministry said. Tuesday
The national transporter has earned Rs 1.91 trillion so far in this fiscal year.
Union Railways Minister AshwiniVaishnaw said that revenue was “Rs 42,370 crore more” thus far this fiscal year with “71 days more to go”. The development comes less than two weeks ahead of the Union Budget, in which the Railways is expected to see a boost in allocation.
Though a break-up of the earnings was not available, it is estimated that about Rs 1.3 trillion was earned from the freight business, with approximately Rs 55,000 crore coming through passenger fare, and the rest through coaching, parcel services, and sundry receipts.
As of January 19, the Railways had ferried 1,185 million tonnes (mt) of raw materials and goods, which was 8 per cent higher than the whole of the previous fiscal year.
The Indian railways is planning to introduce multiple wagon tipplers to speed up the coal distribution network across the country. Along with additional wagon tipplers, the railways is also looking to have additional wagon unloading lines to de-load the coal wagons at the powerhouses.
Coal wagon tipplers are used to empty the loaded wagons from the top and sides, with the help of clamping devices. At present, one wagon tippler is used by the Indian railways for emptying coal.
“The technology of multiple wagon tipplers at once is widely used in Japan and we are working to bring it to India. Three coal wagons can be tippled at one point. This will drastically improve the supply chain of coal across the country,” said a senior Indian Railways official who did not want to be named.
With the increase of wagon tipplers, railways isanticipating swift movement of coal and a reduction in transportation time. Further, the Indian railways will be getting 50,000 wagons in 2023. One rake has 59 wagons and can carry 4,000 tonnes of coal at one time and with increasing the number of wagons railways plan to improve the number of rakes transporting coal.
lion tonnes (mt) in December, which is the highest during the current fiscal year. The volume is also 8 mt higher than the traffic over the past three months, which had been stuck at 61 mt since September. It is also the second-highest traffic volume handled by major ports in a month since the onset of Covid-19. Cumulatively, traffic at major ports reached 576 mt by December, which is nearly 9 per cent higher than the previous fiscal year.
“The entire increase in volumes in December, Quarter and year can be explained by volumes of coal. However, container volumes have come under stress,” said Mohit Kumar, a researcher with DAM Capital, who attributes the current coal surge to geopolitical tensions.
Officials and experts suggest the current surge in coal cargo has also been aided by the increased use of the rail-sea-rail (RSR) mode for the domestic transportation of thermal coal.
After three months of stagnant growth, cargo traffic at state-owned ports rose 10.4 per cent in December year-on-year (YoY), signaling a strong rebound in a year that has fared slower than expected.
Twelve major ports handled cargo of 69.5 mil-
India’s steel production and consumption grew 5.7% and 11.5%, respectively, during the first nine months of FY23 (April to December), CareEdge Research said in a report. The rating agency estimates India’s steel production to be in a range of 117-119 million tonne, up 3-5% year-on-year in FY23.
CareEdge Research said that the consumption growth rate is expected to be healthy at 10-12% in FY23, backed by a pick-up in investment in the infrastructure sector and policy support by the government.
“The healthy domestic demand outlook is likely to benefit steel players. To serve the growing domestic demand, local steel production will grow backed by sustained high capacity utilisation levels," it added.
Steel exports declined sharply by 54% y-o-y in the first nine months of FY23 due to weak glob-
al demand and an export duty of 15% imposed on steel products from May 2022 to November 2022. India became a net importer of steel with a 38% decline in exports y-o-y during Q3FY23. During the same period, imports grew by 70%," the report stated.
India’s steel mills are looking at an interim price hike of ₹1,500 - ₹3,000 per tonne (/t) across select offerings which include benchmark hot rolled coils (HRCs), TMT bars and some other categories like HR strips.
Prices are hovering at around 57,000/t for HRCs - the highest in three months since October- and hikes come on the back of better performance by end-user industries and a rise in coking coal costs apart from improved domestic demand.
This will be the second time this fiscal that mills see an interim price rise, after the April - May period when high coal cost and strong export bookings initiated the move. Mills raised their prices in January, after a prolonged eight-month lull because of poor export demand, sluggish domestic orders, rise in imports and imposition of export duty.
Larger steel players raised list prices of flat products by 1,500 - 2,000/t in the first week of January. The revised prices were in the 55,50056,500 range for HRCs and in 62,500-63,000 for cold rolled coils (CRCs). Reportedly, the increase was absorbed.
India will seek an easing of European Union steel import quotas and tarrifs in talks for a new trade deal as Indian steelmakers struggle to sell the alloy in one of world's big markets, a senior government official said.
Last year, India and the EU relaunched negotiations for a free trade agreement with the aim of
completing talks by the end of 2023. The two sides previously launched talks in 2007, but they were frozen in 2013 due to a lack of progress.
India's steel and trade ministries did not immediately reply to a Reuters email seeking comment. The EU uses a system of quotas and tariffs to protect its steelmakers. Other than India, the main exporters of steel to the EU are China, Russia, South Korea, Turkey and Ukraine.
As Indian steel mills struggle with raw material supply disruptions triggered by the war in Ukraine, the official said New Delhi was looking at securing the supply of coking coal from new markets such as Mongolia. The Ministry of Steel has also requested The Ministry of Finance to axe coking coal import duty, the official said.
Global steel prices (free-on-board, China) are set to stabilise in calendar 2023 on-year, after falling over 40% to $570-590 per tonne in December 2022 from the early-April peaks of $1,000 per tonne on tepid steel demand, according to CRISIL Ratings.
Following the global trend, domestic steel prices are expected to soften only a minimal 2-4% on-year (for flat steel) in fiscal 2024, after seeing a decline of over 30% last December from the historical highs of April. Flat steel prices had climbed 25% in just two months at the onset of the conflict between Russia and Ukraine, but cooled off due to a drop in raw material prices, imposition of export duty by the Government of India, and rising stock levels.
However, prices are once again set to turn the corner as steel producers face rising input costs.
A large part of this is because the Indian steel industry imports ~90% of its coking coal requirement, majorly from Australia. While coking coal prices were on a declining trend for majority of this fiscal, short-term volatility was observed in anticipation of supply chain disruptions.
Top importer China is resuming coal imports from Australia after a three-year halt, a step that could alter trade routes and volumes for the fuel used in power generation and steel production. Trade flows have changed since 2020, when China imposed an unofficial ban on imports from Australia, the world’s second-largest coal exporter, following a diplomatic setback.
Australia was China’s second-largest supplier of overseas coal before the ban, accounting for a third of China’s imports. Coal shipments from Australia to China, which accounted for about a quarter of Australia’s total exports of fuel in 2019, fell to nearly zero in 2021 and 2022.
Since then, Japan has consolidated its position as Australia’s biggest client, while India and
Europe have increased purchases, data from consultancy Kpler showed. Australia’s supply to Japan increased to 36.5% of all its coal exports in 2022, compared with 27.6% in 2019. India’s share increased to 15.7% in 2022 from 12.3%, while Europe’s share increased to 8% from 4.6%, the Kpler data showed.
Australia's most populous state is set to require coal miners to reserve up to 10% of production for the domestic market, as part of a national move to cap soaring energy prices, government officials said. Australia's Labor government led by Prime Minister Anthony Albanese in December passed legislation to cap natural gas prices
for one year, and secured agreements from the coal-producing states of New South Wales (NSW) and Queensland to cap the price of coal sold to power plants.
NSW Treasurer Matt Kean said the state would require those coal miners that do not currently sell into the domestic market to reserve between 7% and 10% of their output for domestic use. The new arrangement would ensure a fairer sharing of the burden among coal companies as part of the federal government’s push to drive down energy prices, he said.
The NSW Minerals Council, which represents miners, said the policy would have little impact on electricity prices but could upset trade partners, raise costs by disrupting existing supply chains and deter future resources investments in the state. He added that coal producers would continue talks with state officials to minimize the economic damage of this flawed policy. Whitehaven said it was in talks with state government officials to supply coal.
Australia's Coronado Global Resources said resuming metallurgical coal imports to China would likely push sea-borne coal prices higher in the short term, with strong realized prices in 2022 boosting its annual revenue. The comments come after China, Australia's largest coal importer and trade partner, earlier this month lifted an unofficial ban on coal imports and others commodities from the country after a nearly three-year-long geopolitical tussle.
The Brisbane, the Queensland-based miner, which has not typically sold coking coal to China, said last week it had received enquiries for long-term supply as Beijing lifted its unofficial ban on coal imports from Australia. Chief Executive Officer Gerry Spindler said he expects met coal prices to remain above historical averages throughout 2023 due to the ongoing trade constraints for Russian coal and elevated thermal coal demand and prices.
The coal miner posted annual revenue of $3.57 billion, 66% higher than last year with average realized prices more than doubling to $303.1 per tonne. However, its coal sales volume for the year fell 7.7%, sending shares of Coronado Global 3.3% lower to A$2.07 at 0336 GMT.
Dalrymple Bay Infrastructure, the Queensland coal export port, has told investors that its cash flows will benefit from rising inflation as it expressed confidence in future demand for metallurgical coal. The listed company’s shares have rallied over the past few months amid expectations that Australian exports of metallurgical coal, which is used to make steel, will be in demand from China as tensions with Australia ease.
Dalrymple Bay coal terminal in Queensland expects demand for metallurgical coal will remain strong. European countries that no longer get their coal from Russia because of its war on Ukraine are also expected to be buyers, particularly if Europe avoids a serious recession. DBI’s shares, which were listed in late 2020 at $2.57 per share but have always traded well below their offer price, are now trading within a whisker of their listing price, closing on this week at $2.51 per share.
Metallurgical coal exports from Australia are expected to rise over the next few years, with the federal government forecasting Australia will export 174 million tonnes in fiscal 2023 – up from 163 million tonnes in 2022 – and then to further climb to 183 million tonnes in 2024.
Coal-rich but energy-starved South Africa will not immediately abandon its fossil-fuelled electricity generating plants as it transitions to cleaner forms of power, President Cyril Ramaphosa said. South Africa, one of the world's largest polluters which generate about 80 percent
of its electricity through coal, is in the grip of an energy crisis. It has been blamed on aeging power stations, sabotage, and theft of coal and spare parts by organized gangs.
Since 2021, the country has secured several billions of dollars in international loans and grants to support a green transition. But Ramaphosa cautioned against the perception that we are called upon to make a trade-off between energy security and a just transition to a low-carbon economy.
Addressing his African National Congress (ANC) party's senior officials, he said it was not the case "that we must make a choice between coal and renewable energy. Two recently built plants, ranked among some of the biggest coal-powered stations in the world, are beset by design problems. But they will remain operational until the end of their 40-year lifespan, he vowed.
South Africa’s coal use dropped last year making it one of a handful of countries that used less of the fuel, according to BusinessLive.Citing the International Energy Agency IEA), BusinessLive said consumption fell 5% to 157 million tons (Mt) owing to increased power rationing imposed by the state-owned energy utility, Eskom.
The IEA said in a forecast that coal consumption would stabilize in South Africa but it would not recover to former levels. In addition to loadshedding, the IEA also said slow economic growth would have a bearing on coal consumption. Globally coal demand increased to a record in 2022, said the IEA. “The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” said Keisuke Sadamori, IEA director of energy markets and security.
Global coal consumption increased by 1.2% in 2022, surpassing 8 billion tons in a single year for the first time, but it was forecast to remain flat at that level through 2025 as coal consumption declines in mature markets such as Europe
while remaining robust in emerging Asian economies, said BusinessLive.
An embargo on trucks offloading at the port of Richards Bay during the festive season caused high traffic volumes and backlogs of vehicles waiting to be serviced. Transnet said in response to questions the “backlog was due to Transnet and the City of Umhlathuze deciding to minimize the trucking operation during the festive season to accommodate the high volume of tourists, visitors and holiday activities held during the festive period.
Transnet has also beefed up offloading capacity by deploying additional resources to avoid any further congestion. At the staging areas, personnel is also in constant communication with each truck’s supervisor via two-way radio, for the guidance of accurate destination. There is also constant negotiation with customers to deploy marshals that will assist in directing the traffic.
In the cases where a truck arrives in Richards Bay without a permit, they are reported to the road traffic department and a fine is issued. A task team comprising Transnet, municipal officials, traffic department, cargo owners, and trucking companies have been formed to deal with the situation.
Indonesia’s coal exports surged during 2022, with the EU and India receiving the lion’s share of these increases. In its latest weekly report, shipbroker Banchero Costa said that “after a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the full 12 months of 2022, total global seaborne coal loadings increased by +5.9% y-o-y to 1204.9 mln t (excluding cabotage), from 1138.3 mln t in the full 12 months of 2021, although still be-
low the 1275.6 mln t in Jan-Dec 2019.
As already mentioned, the worst was at start of the year, and the trend in recent months has been increasingly positive. In 1Q 2022, global loadings were down -4.8% y-o-y to just 257.4 mln t, and down -20.3% from 1Q 2019. In 2Q 2022, coal loadings were a strong +8.5% y-o-y at 313.8 mln t, and down -4.1% from 2Q 2019. In 3Q 2022, shipments increased again to 317.2 mln t, up +6.3% y-o-y, and just -0.7% from 3Q 2019. In 4Q 2022, loadings were 316.5 mln t, up +12.9% y-o-y from 4Q 2021, and -0.6% from 4Q 2019”.
According to the shipbroker “in Jan-Dec 2022, exports from Indonesia increased by +21.2% yo-y to 388.9 mln t, whilst from Australia down -5.0% y-o-y to 340.3 mln t. Seaborne coal imports into the European Union surged by +33.9% yo-y to 116.5 mln t in Jan-Dec 2022, whilst imports to India increased by +13.6% y-o-y to 203.8 mln t, and imports to China declined by -3.2% y-o-y to 234.7 mln t. Indonesia is the world’s largest seaborne exporter of coal, accounting for 32.3% of the global seaborne coal market in 2022.
The world's top thermal coal exporter shocked global markets a year ago by temporarily banning coal exports to protect domestic power producers, sending coal prices soaring and kicking off a historically volatile year for coal and other power fuels. But since then Indonesia has made a different mark on the global coal arena by setting a new record pace for shipments that if sustained puts it on course to be the first country to surpass half a billion tonnes of coal exports in a single year.
With global power markets still disrupted by the fallout from Russia's invasion of Ukrainewhich severed pipelined natural gas supplies to Europe - demand for all power generation fuels is on track to scale record heights in 2023. That means that despite efforts to transition global energy systems away from fossil fuels, Indonesian coal sales may hit a new milestone this year, with commensurate repercussions for emissions of carbon dioxide and other gases
that are already at record concentrations in the earth's atmosphere.
Jakarta's surprise coal export ban on January 1 came at the height of last winter and forced major importers to scramble for replacement supplies from other exporters such as Columbia, South Africa and Australia. At the time, the move had been expected to permanently dent Indonesia's export potential as key customers took steps to reduce reliance on a single supplier by diversifying their coal purchase streams.
Thermal coal imports into China, Japan, and South Korea – three of the world’s largest coal users – hit their highest combined total in 16 months in December as the North Asian manufacturing powerhouses primed their economies for growth in 2023. Economic momentum in these countries – which collectively accounted for nearly half of all thermal coal imports in 2021 – was subdued in 2022 as China’s strict zero-COVID measures stifled industrial activity across the world’s largest manufacturing base.
Japan and South Korea have extensive supply chain ties with China which meant that each country suffered slowdowns in both productivity and demand growth in 2022 as China’s COVID-19 curbs stifled the movement of goods and people over much of the year. But thanks to a slew of stimulus and easing measures passed by Beijing that are designed to kick start a revival in China’s economy this year, factories and industries throughout North Asia are now also primed for a pickup.
To feed that anticipated sustained rise in output and consumption, each country has stepped up imports of thermal coal, which generates power for electrical grids as well as plants producing everything from cement and ceramics to refined metals, chemicals, heavy machinery, and fertilizers. Combined thermal coal imports by the three countries totaled 43 million tonnes in December 2022, the highest monthly tally since August 2021, and ship-tracking data from Kpler show.
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-theclock to support high-tech enterprises nationwide in such fields as AI, autonomous driving, and quantum communication. The development of the digital economy is advancing in Datong, known as China’s “coal capital.” The coalproducing heartland in north China’s Shanxi Province boasts one-eighth of the country’s coal reserves.
While phasing out outdated coal production capacity, the city has been looking for alternative industries for long-term growth. With years of effort, it has become the province’s pioneer in promoting the digital economy in an effort to achieve high-quality development. The city has built a total of 140,000 data center design racks and established a server capacity of up to 2 million units. Its computing output has become a new point of growth in a city that traditionally relied on fossil fuel resources.
In addition to Datong, other traditional coalproducing cities of Lyuliang and Yangquan in the province are also promoting digital economy in the fields of big data, smart mining and unmanned driving.At 500 meters underground, robots are patrolling to monitor mining in the Xinyuan coal mine of the Lu’an Chemical Group Co., Ltd. Assisted by 5G technology, the automated inspectors send real-time data to the mining company’s control center to check mining safety.
As the world moves towards green energy, what will happen to coal? Read on to learn what analysts see for the coal forecast in 2023. Coal pric-
es rose in 2021, and 2022 was another positive year as demand increased on the back of the energy crisis. However, with renewable energy adoption continuing to grow as governments push for cleaner sources of power, many wonder what could be next for coal. Read on to learn more about coal’s performance in 2022, as well as what experts see coming.
Prices for thermal coal, widely used in power stations to generate electricity, started the year trading upwards as tight supply and Russia’s invasion of Ukraine impacted the sector. Similarly, metallurgical coal prices increased on the back of Russia’s invasion of Ukraine. Metallurgical coal, also known as coking coal, is used to produce coke, the primary source of carbon used in steelmaking.
Despite pledges to reach net-zero emissions, the ongoing war sent oil and gas prices up in 2022, which in turn had many countries increase their coal use despite their clean energy commitments. According to the International Energy Agency (IEA), coal's traditional trade flows were disrupted in 2022, with prices soaring and demand set to grow by 1.2%, reaching an all-time high and surpassing 8 billion metric tons (MT) for the first time.
Despite the slump in world crude steel production in 2022, global seaborne trade in coking coal remained strong with imports of met coal and PCI increasing by 8% y-o-y to around 320 million tonnes (mnt) from 295 mnt in 2021, as per provisional data maintained with CoalMint.
India was the leading coking coal importer at 69 mnt, accounting for 22% of total global imports. India's imports were almost stable y-o-y compared to 2021. For Indian importers of coking coal there was no major change in the demand scenario. Demand did not fluctuate much since
the steel export duty fiasco but remained generally steady. No major producer cut production sharply. In fact, steel production increased by around 9 mnt y-o-y in the April-December period.
China was the second-largest importer at 63 mnt. Imports by China rose 14% y-o-y, although crude steel production fell by 1.4% in JanuaryNovember 2022, as per WSA data. Pandemic restrictions impeded the movement of domestic scrap for steelmaking, thereby impacting EAF steel production. Higher shipments by Russia and Mongolia also account for higher imports by China. Mongolian shipments doubled y-o-y in 2022 as COVID-related restrictions were eased enabling truck movement across the border, while Russian cargoes were available at much cheaper rates since sanctions against Russia came into force in August.
Thanks to a recent plunge in European natural gas prices down 60% since December 1 on mild winter temperatures, filled storage tanks, and diminished industrial use European coal prices and demand have slumped so far in 2023. Thermal coal markets were a prominent beneficiary of Europe’s power sector turmoil in 2022, with prices surging more than 250% through midMarch as utilities and trading firms scrambled to replace lost supplies of Russian natural gas with other fuels.
Benchmark European thermal coal TRAPI2Mc1 prices remained close to historic highs throughout 2022 on sustained higher use across the continent, averaging roughly $285 per tonne for the year, compared with about $115 a tonne in 2021. Higher coal use also yielded more pollution, with the cumulative discharge of carbon dioxide (CO2) by Europe’s coal power sector topping 600 million tonnes through November, the highest tally for the period since 2019, and data from Ember shows.
That clashes with the more bullish posture of
coal markets in top coal-consuming region Asia, which has been bracing for sharply higher coal use and purchases in 2023 as dominant coal consumer China reboots its economy following a COVID-hit 2022. The divergent tones of Europe’s and Asia’s coal markets are captured by the record-wide price spread between them.
Germany's coal imports and demand rose in 2022 for the second year running, and the country will depend on coal for longer than planned by the government, the coal importers association VDKI has warned. Demand from Germany's hard coal-fired power stations jumped by 16pc last year to around 25mn t of steam coal or 21.5mn t of "coal equivalent" (according to VDKI estimates. VDKI had expected even higher consumption, but strong photovoltaic (PV) generation in the summer and wind generation in the autumn put paid to that.
The country's overall hard coal consumption posted a more modest rise of 4.8pc last year to 39.6mn tce or 46.2mn t, as steel sector demand dropped by 6pc on the year. VDKI lists domestic consumption in tce. Germany last year imported 43mn t of hard coal, 4.7pc up on 2021, VDKI estimates. Imports of steam coal used for power plants gained almost 12pc to an estimated 30mn t — almost matching 2019 imports of 30.1mn t. Coking coal and coke imports fell last year, by 7pc and 15pc on the year, respectively, to 11mn t and 2mn t.
At the same time, Germany's 2022 primary energy consumption was 4.7pc lower on the year, with nuclear energy and natural gas posting the highest losses, according to preliminary data from energy sector working group Ageb released last month. The overall share of hard coal in Germany's primary energy consumption last year rose to 9.8pc, from 8.9pc in 2021, according to Ageb.
Romania plans to expand coal
The Romanian government adopted the decision to cut down a 106-hectare forest without compensation so that the state-owned coal mine and plant operator Complexul Energetic Oltenia (CE Oltenia) could expand one of its lignite mines, Bankwatch reported. The government’s decision will allow CE Oltenia to increase lignite output at the Timișeni-Pinoasa mine to 8 million tons per year.
That’s almost half of the total 2021 lignite production by CE Oltenia, which operates most of the country’s coal mines and thermal power plants. Coal mine expansion contravenes National Recovery and Resilience Plan. The decision to expand lignite mining, adopted by the government last week, runs counter to the decarbonization process, which is a part of the National Recovery and Resilience Plan (NRRP) and national law, which envisions phasing out coal by 2032, Bankwatch said.
Late in 2022, the government made two more decisions that contradicted decarbonization processes, noted Bankwatch. The government approved a decision to postpone the closure of two 660 MW blocks, Rovinari 3 and Turceni 7, and extend their operation until October 2023. The government also postponed the closure of two 660 MW blocks, Rovinari 3 and Turceni 7.
US seaborne thermal coal exports are expected to remain slightly softer in 2023 as demand from Asia wanes and supply-side concerns take a back seat with the availability of additional Russian tonnages, market sources told S&P Global Commodity Insights.
Demand for US coal is surely depleting from South Asia and Southeast Asia, especially after how Russian coal has made a sort of backdoor entry in terms of supply, a large buyer of US coal in Asia said. Coal from Russia is also coming at
very competitive prices to China and India, eroding the US coal market, and the trend is likely to continue going into 2023, he added.
With Europe sanctioning Russian coal in 2022 due to its invasion of Ukraine, additional cargoes available from Russia were largely purchased by China and India as they were offered at hefty discounts. While the trend continues, the discounts have come down to some extent. In 2022, Russian coal displaced about 6.6 million mt of US thermal coal at cheaper-thanprevailing prices in markets like China and India, according to S&P Global data.
Wyoming coal mines saw an uptick in production last year, but about 50 million tonnes of production didn’t happen because of a lack of rail service to get the coal from the mines in Wyoming to power plants across the country. During a presentation for the Senate Minerals, Business and Economic Development Committee this week, Wyoming Mining Association Executive Director Travis Deti said that when mines can’t ship coal, it’s just lost business.
Deti estimates that the state of Wyoming lost about $100 million in revenues as a result of unrealized severance taxes from that lost production in 2022. In December, during the Arctic blast that sent temperatures rapidly into negative numbers in a matter of hours, Wyoming mines had consecutive days in which no rail cars were available.
Deti told Cowboy State Daily that one of Wyoming’s coal companies told him recently that when it comes to getting rail service, it’s “hit or miss.” When coal-fired power plants can’t get coal, they switch to natural gas, Deti said. During periods of cold weather, natural gas prices tend to go up, and so when plants are using more gas, it costs more for consumers.
by up to 50% without a fresh environmental impact assessment or public consultation;
08.02.2023
SHRI
Will the Minister of Coal be pleased to state:
(a) the year-wise details of the supply of coal and its consumption in the country;
(b) whether the country is currently facing a coal shortage and if so, the details thereof;
(c) whether it is a fact that the Ministry has requested the Ministry of Environment, Forest and Climate Change to allow coal mines with existing environmental clearances to increase their production by up to 40% and to hike production
(d) if so, the details thereof and if not, the reasons therefor; and
(e) the other steps being taken by the Government to ensure adequate supply of coal?
MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES
(SHRI PRALHAD JOSHI)
(a): Details of coal supply and consumption in the country for the last five years and the current year (upto January, 2023) are as under:
(b): There is no shortage of coal in the country. The all India coal production in the year 20212022 was 778.19 MT in comparison to 716.08 MT in the year 2020-2021. Further, in the current financial year upto January, 2023, the country has produced about 698.24 MT of coal as compared to about 602.49 MT during the same period of last year with a growth of about 16%.
(c) & (d): Ministry of Coal has requested the Ministry of Environment, Forest and Climate Change (MoEF&CC) to allow coal mines with existing Environmental Clearances to increase their production up to 40%, to hike by up to 50% without Fresh Environmental Impact Assessment or Public Consultation. Considering the above request, MoEF&CC has issued an OM dated 11.04.2022 on "Guidelines for Granting Environmental Clearance under para 7 (ii) (a) of EIA Notification, 2006, for expansion upto 50% within the existing premises / Mine lease area, without additional land acquisition" and another OM dated 07.05.2022 on "Special dispensation for consideration of Environmental Clearance for 50% expansion in Coal mining projects, within the existing premises/Mine lease area, without additional land acquisition".
(e): Supply of coal to the power plants is a continuous process. To address the issues of coal supplies to Power Sector, an Inter-Ministerial Sub Group comprising of representatives from Ministry of Power, Ministry of Coal, Ministry of Railways, Central Electricity Authority (CEA), Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) meet regularly to take various operational decisions to enhance supply of coal to thermal power plants as well as for meeting any contingent situations relating to Power Sector including to alleviate critical coal stock position in power plants.
In addition to this, an Inter-Ministerial Committee (IMC) has been constituted comprising of
Chairman, Railway Board; Secretary, Ministry of Coal; Secretary, Ministry of Environment, Forest and Climate Change and Secretary, Ministry of Power; to monitor augmentation of coal supply and power generation capacity. Secretary, Ministry of New and Renewable Energy and Chairperson, CEA are co-opted as Special Invitees as and when required by the IMC. Coal dispatch from the captive coal blocks is also being monitored regularly.
Coal India Limited, the largest supplier of coal in the country, has dispatched 572.25 MT of coal in the current fiscal (April – January, 2023) achieving a growth of 5.5 % over last year same period. Similarly, Singareni Collieries Company Limited (SCCL) has dispatched 54.1 MT of coal in the in the current fiscal (April – January, 2023).
08.02.2023
SHRI DHANUSH M. KUMAR:
SHRI C.N.ANNADURAI:
SHRIMATI MANJULATA MANDAL:
SHRIMATI SUPRIYA SULE:
SHRI SELVAM G.:
DR. DNV SENTHILKUMAR.S:
DR. AMOL RAMSING KOLHE:
DR. SUBHASH RAMRAO BHAMRE:
SHRI SUNIL DATTATRAY TATKARE:
SHRI KULDEEP RAI SHARMA:
Will the Minister of Coal be pleased to state:
(a) the details of the demand and supply of coal
State-wise and plant-wise with particular reference to the States of Tamil Nadu, Odisha and Maharashtra;
(b) whether there is huge gap between demand and supply of coal in the country and if so, the
details thereof along with the percentage of Country’s energy needs that are met through Coal;
(c) whether the demand for coal has increased to meet the energy requirement of the country, if so, the reasons for not increasing the domestic coal production so as to reduce the dependence on imported coal and save foreign currency;
(d) whether it is proposed to reduce the use of coal globally to save the environment; and
(e) if so, the details thereof along with the rea-
sons for the increase in the use of coal in the country?
(a)&(b): The total demand and total supply of coal and domestic supply of coal to the States of Odisha, Maharashtra and Tamil Nadu for the last three years are given below:
*Figures on domestic supply of coal to states are provisional.
As conveyed by CEA, the actual electricity generation from coal based power plants, total generation and contribution of coal based generation in total generation in the country during the last five years and the current year 2022-23 (April to November, 2022) are given as under:-
(c): The actual demand for coal increased to 1027.92 Million tonne in 2021-22 from 906.13 MT in 2020-21. For the current year 2022-23, coal demand has been assessed by the Ministry to reach 1087 MT. As against the increased coal demand, domestic coal production has also increased. In 2021-22, the domestic coal production increased by 8.67% to reach 778.19
MT from 716.08 MT in 2020-21. Further, the following measures have been taken by the Government to enhance the production of coal in
the country:
i. Identification and development of new Coal blocks, including through captive and commercial route.
ii. Enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 for enabling captive mine owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market after meeting the requirement of the end use plant linked with the mine in such manner
as may be prescribed by the Central Government on payment of such additional amount.
iii Single Window Clearance portal for the coal sector to speed up the operationalization of coal mines.
iv. Project Monitoring Unit for handholding of coal block allottees for obtaining various approvals/clearances for early operationalization of coal mines.
v. Commercial auction of coal blocks on revenue sharing basis. Under commercial mining scheme, rebate of 50 % on final offer would be allowed for the quantity of coal produced earlier than scheduled date of production. Also, incentives on coal gasification or liquefaction (rebate of 50 % on final offer) have been granted.
Generation (Billion Units)
vi. Coal India Limited is adopting Mass Production Technologies (MPT) in its Underground (UG) mines, mainly Continuous Miners (CMs), wherever feasible. Coal India Limited has also envisaged working large numbers of Highwalls (HW) mines in view of the availability of Abandoned/Discontinued mines. Coal India Limited is also planning large capacity UG mines wherever feasible.
vii. In Opencast (OC) mines, Coal India Limited has adopted State-of-the-Art technology through high capacity Excavators, Dumpers and Surface Miners.
viii. SCCL is expediting the activities to ground new 8 mines.
(d)&(e): Being an affordable source of energy with substantial reserve, coal is going to stay as major source of energy in the foreseeable future. Despite push for renewables, country will require base load capacity of coal-based generation for stability and also for energy security. India has committed to clean energy; the pace of transition to cleaner energy sources in India is to be viewed in the light of national circumstances, and principle of common but differentiated responsibilities and respective capabilities, the transfer of climate finance and low cost climate technologies.
09.02.2023
SHRI MANOJ KOTAK: SHRIMATI RAKSHA
NIKHIL KHADSE:
Will the Minister of POWER be pleased to state:
(a) whether the Government proposes to build new coal-fired plants because of the lower generation cost to meet the increasing demand of power;
(b) if so, the details thereof;
(c) the details of the locations fixed for establishing the new Coal-fired thermal power generation plants;
(d) whether the Government proposes to increase the capacity of power generation of the already existing plants and if so, the details thereof; and
(e) whether the Government proposes to take over the State owned thermal plants to enhance the power generation capacity and if so, the details thereof?
THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY
(a) to (d) : As per Section 7 of the Electricity Act, 2003, "any generating company may establish, operate and maintain a generating station without obtaining a license/permission under this Act, if it complies with the technical standards relating to connectivity with the grid. Accordingly, sanction of the Government is not required for setting up of thermal power projects”. Central Electricity Authority monitors capacity addition of power plants. 8 Number of Central Sector thermal power projects having capacity of 12580 Megawatt (MW) and 11 number of State Sector thermal power projects having capacity of 13660 MW are under construction to increase the capacity of thermal power generation in the country. Details of location of these plants are at Annexure.
(e) : Ministry of Power has no proposal to take over the state owned thermal plants to enhance the power generation capacity.
ANNEXURE REFERRED IN REPLY TO PARTS (a) TO (d) OF UNSTARRED QUESTION NO. 1210 ANSWERED IN THE LOK SABHA ON 09.02.2023
List of under construction thermal power projects in India (As on 25-01-2023)
SHRI BRIJLAL:
MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES
06.02.2023
Will the Minister of Coal be pleased to state:
(a) the target of coal production set by Government for the next financial year;
(b) the steps taken by Government under the initiative to engage the major Mining Developers cum Operators (MDOs) in coal mining and to increase the domestic coal production in order to reduce dependence on import; and
(c) the total number of projects being considered for implementation through Mining Developers cum Operators (MDOs)?
(SHRI PRALHAD JOSHI)
(a): The target of all India coal production has been fixed at 1017 MT for the financial year 2023-24.
(b)&(c): Steps taken by the Government to increase domestic coal production by engaging Mining Developers cum Operators (MDOs) are as under:-
(i) Coal India Limited (CIL) has identified 15 projects with total project rated capacity of 168.58 MTY for implementation through MDO mode. Out of these 15 projects, Letter of Award (LoA) has already been issued to 9 projects having total capacity of 126.74 MTY.
(ii) NLC India Limited (NLCIL) is implementing two MDO projects with 29MTY.
*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's Ministry of Energy and Mineral Resources (ESDM) mulls changes to domestic coal program. The organization is working on a scheme for establishment of an agency dealing with fee collections from mines and also working on creating difference between the market prices and the prices for domestic market obligations to ensure stabilization of domestic supply of coal. The agency initially planned to take the form of a Public Service Agency (BLU), but the government is looking
to change the type to the Managing Agency Partner (MIP).
*Australian exporters are preparing for a rush of new orders as relations between the country and China are expected to return to normal. Recent global conditions led Australian coal suppliers to find alternative markets, to offset the impact of Chinese restrictions that came into effect in 2020. Although China is set to re impose import tariffs on various coal grades from April 1 after it temporarily removed duties for a year until March 31, 2023, Australian coal products can still be attractive to Chinese buyers.
*Australia's big coal miners are in talks with the government of New South Wales State over the plan to have the companies hold back as much as 10% of production for domestic supply. The country is seeking to cut costs for households by capping soaring gas and coal prices, and New South Wales wants to boost the effort by enhancing domestic supply of coal, most of which gets exported. Australia's government passed legislation in December to cap natural gas prices for one year, and won agreements from top coal producing states of New South Wales and Queensland to cap the price of coal sold to power plants.
of dollars in international loans and grants to support a green transition.
*President Cyril Ramaphosa said the country needed an energy mix that included coal, nuclear, solar, wind and biogas if it was to transition to a cleaner form of energy. Earlier, Eskom announced that it was contemplating implementing Stage 2 or 3 load shedding on a near-permanent basis for the next two to three years. Ramaphosa said 80% of the country’s energy comes from coal-fired power stations and this could not be ignored. Ramaphosa admitted that load shedding had a dire effect on the economy and companies are reluctant to invest and once investment dries up, productivity is dampened and jobs cannot be created on an economic scale.
*Coal-rich but energy-starved South Africa will not immediately abandon its fossil-fuelled electricity generating plants as it transitions to cleaner forms of power, President Cyril Ramaphosa said. South Africa, which generate about 80% of its electricity through coal, is in the grip of an energy crisis. It has been blamed on aging power stations, sabotage, and theft of coal and spare parts by organized gangs. Since 2021, the country has secured several billions
*Russia’s coal production edged up by 0.3% in 2022 in annual terms, Deputy Prime Minister Alexander Novak said at a government meeting headed by President Vladimir Putin. “Speaking about 2022, coal production rose by 0.3% by the end of the year despite the fact that coal supplies to Europe were embargoed starting August 10," he said. Meanwhile, coal exports from Russia dropped by 7% in 2022 compared with 2021, though deliveries to the domestic market gained 8%, Novak said. Domestic supplies rose by around 8%, while exports lost 7%, he said.
* Poland imported a record 14 million tonnes of coal in 2022, Polish Deputy Minister of State Assets Karol Rabenda said. In the spring of last year, Poland completely banned the imports of coal from Russia."From the beginning to the end of the year, we delivered 14 million tonnes of coal to Poland. This is probably a record number when it comes to the capabilities of Polish ports," Rabenda told reporters. The official said
many doubted Poland could go without Russian coal, given its economy's heavy dependence on energy sourced from coal burning, but the country managed to become "100% independent on Russian coal" by importing from other places.
*US coal prices plunged from record highs as warm winter conditions eased demand for the dirtiest fossil fuel. According to government figures released, coal from the Northern Appalachia region slumped to $115 a ton for the week ending Jan. 6, down 45% from the prior week. Spot prices for coal from Central Appalachia fell 33%, and fuel from the Illinois Basin dropped 31%. While bids may rise again in the coming weeks as the picture becomes clearer, “for now, it looks like the consensus is that coal prices will be lower,” Rosalyn Berry, lead operations research analyst for the U.S. Energy Information Administration’s coal program, said.
*US railroad Union Pacific is adding 150-200 workers per month to support growing coal demand amid low natural gas inventories in 2023, the company said. The railroad serves the largest US coal producing region, the Powder River Basin, which consists primarily of Wyoming and Montana. In 2022, UP generated $2.1 billion in coal and renewables freight revenues. In the fourth quarter, UP generated freight revenues of $523 million from its coal and renewables segment.
falling domestic coal price kept buyers on hold and in Turkey low-priced Russian coal set a lower discount combined with a fall in clinker production of 15 % YoY. US production has been stable and refiners are avoiding the buildup of stocks that are too large, offering product at lower prices to maintain short-term buyers in their comfort zone. Venezuelan product has been seen in several destinations with significant volume increases to Turkey, putting a lid on mid-sulphur range prices, which remain high compared to the normal $10 spread.
*The global Dry Bulk Shipping market size was valued at USD 347876.7 million in 2021 and is expected to expand at a CAGR of 3.56% during the forecast period, reaching USD 429063.47 million by 2027.Because of the world's rising urbanization in recent years, there are more prospects for growth. After the pandemic broke out, dry shipping's market value declined. However, as things returned to normal, the growth was consistent. Steel is in high demand because of the rise in infrastructure projects. Therefore, producers employ various techniques and concepts to raise the value of their output to alter consumers' perception of their products worth.
*Despite the rise in coal prices, petcoke continued to decline at the end of the year as demand remained sluggish from India and China despite higher discounts. In China the
*The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, extended losses to a fresh two-and-a-half-year low, pressured by a dip in rates for capesize vessels. The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, was down 73 points, or about 8.4%, at 801, it’s lowest since June 2020. The capesize index fell to a fourmonth low, losing 214 points, or about 19.3%, to 893, also marking its worst day this month. The capesize index fell to a four-month low, losing 214 points, or about 19.3%, to 893, also marking its worst day the month.
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Coal Despatch to Power Sector (in MT)
Coal Despatch to Non-power Sector (in MT)
