July Price:202240/WHERE SERVICE AND DEDICATION JOIN HANDS Vol. LI No. 04 Published on : 28.07.2022
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It is now evident that the reduction of coal demand will be slower and unevenacross regions. Currently, coal accounts for about 25% of primary energy and abouttwo-thirds of the power sectors’ generation globally. A combination of increasingdemand for higher energy coal, lack of investment and looming gas shortagesmeant the coal market was under stress before Russia’s war with Ukraine evenstarted. Now, with looming sanctions on Russian coal by the European Union andRussia’s retaliation by halting gas supplies to them is leading to a greater demand-supply mismatch as Russia supplies over a quarter of the high-energy coal in theglobal market. Sanctions are diverting this coal into markets that do not usuallytake it – leaving European and North Asian markets short of premium material.In the U.S., the share of coal in power generation was originally set to fallsignificantly by 2030 but the continent’s attention towards reliability of power,could defer retirements of some coal-fired utilities as recently announced by themid-continent region operator, to help mitigate the risk of blackouts. Productionand export of coal has also been rejuvenated in the US since mid-2021 afterwitnessing steep decline for nearly a decade.
Asian economies are experiencing a strong rise in electricity demand,which is set to continue over the coming decades to sustain economic growthand when it comes to meeting new demand, coal is still seen as the most easilyavailable, sustainable and affordable option for power generation. Success of Asiancountries like China, India, and Indonesia of meeting the emission level, as pledgedin the COP26 last year, would depend on the future economic and technicalcapability of carbon capture, usage, and storage technology.
As per the analysts, demand for thermal coal is set to decline after peaking in2024 as coal-fueled power will be increasingly replaced with renewables acrossEurope and the U.S. However, Transitioning away from coal is going to be complexand slow for countries like China and India, which account for 70% of global coalThesedemand.major
Despite these downsides in investments and the regular alerts from environmentalistsaround the world, global coal demand is set to return to its all-time high in 2022.Based on current economic and market trends, global coal consumption is forecastto rise to 8 billion tonnes in 2022 widening the smile in the faces of coal producersand exporters alike.
4 | CCAI Monthly Newsletter July 2022
From the Editor’s Desk
Amid the global thrust towards energy transition and steps to improve adverseenvironmental impacts of fossil fuel even a year ago, the turbulent geopolitics,especially in Europe has propelled coal once again near the centre stage of globalenergy. The ongoing Russia-Ukraine conflict has stirred up the dilemma of energysecurity versus energy transition temporarily, leading many countries in Europe toswallow the bitter pill of allowing coal-fired power back onto the grid.
However, the outlook for capital investment in coal except China is for a near 20%fall in 2022, with a greater reduction in thermal coal. If record high coal prices donot incentivise more capacity, the investment outlook could become increasinglyuncertain when prices eventually fall.
Official Organ of the Coal Consumers’ Association of India. Disseminates News and Views on Coal and all other sources of Energy. 4, India Exchange Place - 7th Floor Kolkata - 700 001 Landline : +91 33 22304488 E-mail : “CoalMO/DD(includingAnnualEditorWebsitesec.ccai@gmail.com:www.ccai.co.in:SubhasriNandiSubscriptionRs.400/-postage)tobemadeinfavourofConsumers’Associationof India” CCAI do not necessarily share or support the views expressed in this Publication. CONTENT 32 Coal Production 34 Overall Domestic Coal Scenario 28 Monthly Summary Of Imported Coal & Petcoke 06 Consumers' Page 10 Power 16 Domestic 22 Global Vol. LI No. 04 July 2022 CCAI Monthly Newsletter July 2022 | 5
Issues faced by Power CarrySector:forward rakes of Power Utilities: If the carry forward rakes are not re-indented in time then it would be considered as deemed delivered quantity. Therefore the balance (unlifted) quantity is considered as short lifting and compensation calcu lation is done accordingly. Request has been made to MoC & CIL so that option can be given to their power customers, if they are not willing to reindent pending rakes they may be allowed to do so without paying any compensation against short lifting. If agreed upon, it would minimise the ef fort of unwilling consumers to continue reindenting of due rakes every month, on the other hand more numbers rakes may be available for the plants who are in a critical fuel situation.
Present Coal Scenario: In a bid to meet the high power demand across the country, India’s coal producers including National Miner Coal India Limited as well as SCCL and other captive producers continue to ramp up production and despatch to power sector in July as well. CIL has produced 47.33 MT coal this month against monthly target of 53.79 MT which is 11% higher than July 2021. India’s overall production of the dry fuel has also increased at nearly the same rate (11.37%) on a y-o-y basis. Country’s overall coal despatch has grown by 8.5% in July (67.81 MT) compared to the same month last year (62.49 MT) while CIL’s despatch has increased by more than 7% y-o-y. In the ongoing financial year, India’s overall coal despatch is gone up by 13.5% compared to same period in last fiscal. Coal India has achieved more than 95% of its despatch target of July this year.
CONSUMERS’ PAGE 06 | CCAI Monthly Newsletter July 2022
SubmissionSector: by NRS consumers regarding non-movement of coal from private railway siding under RcR mode: Non-power Sector lifted coal from NCL’s Krishnashila Colliery as per the FSA during January-February this year and moved the quantity to Krishnashila Railway siding (KRSL). However, in spite of having permis sion for coal movement under Priority-D from the Railways and placing indent under premium freight mode, no rakes could be allotted to them as rake movements have been prioritized for Power Sector. Therefore, the indents allotted to the Industry from NCL got cancelled twice under Priority-D and the whole quantity of coal is still lying in the railway good shed Requestsiding.has been made to the Ministry of Coal and Railways so that a special provision could be devised to initiate the movement of coal stuck at the railway siding to the respective plant-ends at the earliest pos sible. Submission requesting supply of coal as per Annual Contracted Quantity (ACQ) instead of trigger level and allow increase in number of rakes to NRS FSA consumers: Despite increase in coal demand, NRS Linkage Auc tion consumers are still being allocated coal at trig ger level (75% of ACQ) by the CIL Subsidiaries mostly via road mode. This 75% capping has been defined in the Fuel Supply Agreement (FSA) to determine the threshold of Compensation for short delivery/lifting in case of crisis for a few months by either side (buy er/ seller). This should not be considered as a final scale for allocation of coal for a longer period to the Non-Power Sector (including CPPs).
Submission by Power Sector for im mediate release of long-pending rakes booked under Special Forward e-Auctions (SFEA): Despite a steady supply of FSA rakes from MCL, a large number of Special Forward e-Auction rakes for the Power Sector are pending since long. As per some of the utilities, supply over 550 indents allotted to vari ous power plants under Special Forward e-Auction (SFEA) have been pending from MCL’s Talcher area alone, some of which are pending since September 2021 even as those Utilities have already paid up huge amounts of advances to the coal company. Request has been made to MoC, CIL and MCL to expe dite liquidation of SFEA rakes from all CIL Subsidiaries through allotment of pro-rata quantity in the tune of 10%-20% of the total number of coal rakes despatched per day at least till the time high demand eases.
As per Railway circular regarding Preferential Traffic Order GO No. 96 effective from 1st April 2022, Zonal Railways are supposed to provide special preference to transport coal and coke loaded from a colliery sid ing/ washery siding/ plant siding to the plant-ends located at a long distance (more than600 kms) irre spective of priority and date of registration on all days of the week except the two nominated days. While, most of the zonal Railways such as WCR and SECR are giving the priority as per Railway Order, ECR is not doing the Submissionsame.has been made to the Railway Board so that preferential loading and dispatch of rakes to the long distance consumers may be prioritized by ECR as well. Issues faced by Non-power
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Submission by power Sector (IPPs) to prioritise loading and supply of rakes to long-distance consumers from ECR: For Case-2 scenario-4 IPPs, situated at a long dis tance from the mines (more than 600 km), lifting of eAuction coals from NCL and CCL have been severely affected due to huge pendency of indents from East Central Railways (ECR). Also, large quantities of coal lifted by these IPPs are stuck at various good shed sidings of ECR due to short- supply of empty rakes.
Submission for refund of balance coal value without forfeiture of EMD from ECL for NRS Consumers: Certain NRS Consumer procuring coal from Eastern Coalfields Limited has stated that they are not able to lift booked quantities under Spot e-Auction due to irregular production of coal at Chitra AOC and for not allowing 14- wheeler trucks at the mine-end for lifting. As per e-Auction norms, Coal Company may forfeit the EMD amount submitted by the consumers as bid security in case of short-lifting but in this case the customers are not responsible for unlifted quantity as production in the mine was irregular.
Submission for waiving off compensation claim of WCL for short-lifting in Tranche - III & IV NRS Linkage Auction for consumers who exercised ‘Exit Option’ from FSA following revision in WCL coal price: Compensation claim of approximately Rs.7.89 Cr for short- lifting in Tranche III and Tranche IV was made by WCL from JSW Steel Ltd. However, following revi sion in Grade-wise notified price of coal by WCL for Non-Power Sector from Mine Specific Sources during November 2019, the company had opted to exercise the “Exit Option” in accordance with the WCL Notice and accordingly, advance coal value and Financial Coverage BG submitted by the consumer against tranche IV NRS Linkage auction were also refunded by WCL. In another case related to Tranche-III, WCL allowed change of mode for coal lifting from Ballarpur sid ings from Rail to Road for three months (April, May and June 2019) due to unavailability of rakes. In spite of JSW’s appeal for approval well in time as per the FSA, no further extension in change of mode Rail to Road was permitted by the coal company from the same siding. MSQ advance deposited by the con sumer for Tranche III has been kept on hold by WCL against compensation claim despite no fault of the Requestconsumer.has been made to WCL for reviewing the short lifting compensation claims against JSW Steel Ltd as the company availed ‘exit option’ from the FSA which was accepted by the coal company. Also, the pending performance security BG and advance amounts deposited by the consumer should not be adjusted against short lifting compensation claims.
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Request has been made to MoC and CIL so that coal may be supplied to the NRS FSA consumers as per 100% ACQ instead of supplying at trigger level. As the prior critical condition of the Power Sector has im proved, increase in number of rakes supplied to the Non-power Sector may kindly be allowed, commen surate with their normative requirement.
Request has been made to NCL and CIL to expedite release of rakes against pending allocation by the coal company.
Submission by NRS consumers requesting reissuance of sale-order for coal booked from Magadh OCP of CCL by under Spot Auction: Non-power Sector who booked G-13 (-100 mm) grade coal from Magadh colliery of Central Coalfields Lim ited (CCL) through Spot e-Auction dated 15.03.2022 but could not lift the same immediately as issuance of sale order was delayed until late April. Subsequent ly, coal grade at Magadh OCP changed from G-13 to G12 in April 2022 and willing consumers to submit the differential amount of total coal value as per the revised grade within stipulated time. However, CCL had withdrawn the facility of re-issuance of sale or ders of the changed grade on 22.06.202 by stating technical constraints. Amid scare supply of coal to NRS consumers especially via Rail mode, cancella tion of sale order under Spot e-Auction has further aggravated coal crisis among Industries. Request has been made to consider re-issuance of sale-order from Magadh OCP of CCL for concerned NRS con sumers against the Spot Auction held in March ’22.
Request has been made to ECL so that coal value of the balance/unlifted quantity may be refunded to the consumer at the earliest possible without deduction of EMD amount.
Request for supply of rakes by NCL against pending allocations for Linkage auction FSA A significant number of rakes allotted to the Nonpower Sector as per Linkage auction FSA by NCL, have been pending since last year. Such a huge pen dency of allotted rakes is further aggravating the coal crisis faced by these Industries amid already restric tive allocation and supply.
POWER THER
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Foreign IPOs, M&As in plan to take power sector global
The power sector is going global as part of Vision 2047. Strategies being explored by the power minis try in this regard include initial public offerings (IPOs) in global markets, mergers and acquisitions (M&As) in more overseas strategic resources and expanding the global footprint of Indian firms, said two govern ment officials aware of the plans.
The playbook includes peer-to-peer (P2P) energy trading to meet enhanced energy demand and drive economic growth while ensuring access to cheap, reliable and clean electricity. The proposed plan also involves improving corporate governance practices at state-owned electricity distribution companies, cutting tariffs, reducing cross-subsidies and shorten ing the power purchase agreement duration from 25 Theyears.focus is also on building self-reliance in emerg ing technologies and promoting domestic production of critical equipment such as supervisory control and data acquisition (Scada), transformer and batteries amid mounting Chinese hacking attacks on Indian critical infrastructure such as power grids. Some of the other initiatives being explored are promoting competition by delicensing distribution, and increas ing private participation through privatization and franchises. MAL
Coal-based power generation has registered a growth of 26.58% in June 2022 as compared to June 2021. The overall power generation in June 2022 has been 17.73% higher than in June 2021. However, Coal-based power generation in the month of June 2022 has been 95880 MU in comparison to 98609 MU in May 2022 and registered a negative growth of 2.77 %. Total power generation has also decreased in June 2022 to 138995 MU from 140059 MU in May 2022 and registered a negative growth of 0.76 %.
The power consumption and demand were affected in June 2020, due to the imposition of lockdown re strictions for curbing the spread of the coronavirus. According to experts, power consumption and de mand rose mainly because of severe heat and spurt in economic activities, pushing commercial and in dustrial requirements for electricity in the country.
India's Power Consumption Grows 17.2% To 134.13 Billion Units In June
Coal Based Power Generation Achieves 26.58% Growth in June 2022
The Power utilities despatch has grown by 30.77% to 64.89 MT during June this year as compared to 49.62 MT in June 21 due to an increase in power demand.
Gencos imported 9.2 mn tonne of coal in April-June period: Power Ministry Power generating firms (gencos) have imported 92.07 lakh tonne of coal in April-June this financial year for blending purposes ahead of Monsoon sea son after Ministry of Power advised Central Gencos, State Gencos and Independent Power Producers (IPPs) to import coal for blending purpose during 92,07,0002022-23.
It also involves promoting ease of living by enabling consumer choice and innovation at the grassroots with minimal institutional intervention. There are also proposals to facilitate consumer-centric business models and regulatory structure to ensure technical integration of decentralized grids.
“We have asked power plants to blend 10 per cent
Power consumption in the country grew by 17.2 per cent year-on-year to 134.13 billion units (BU) in June, amid severe heat and a spurt in economic activities. Power consumption in June last year was recorded at 114.48 BU, which was higher than 105.08 BU in the same month of 2020, according to power ministry Moreover,data. peak power demand met, which is the high est supply in a day, during June this year remained at an all-time high of 209.80 GW (on June 8). The peak power supply stood at 191.24 GW in June 2021, and 164.98 GW in June 2020.
CCAI Monthly Newsletter July 2022 | 11
tonnes of coal were imported by the gen cos during April-June this fiscal year, which includes 57,17,000 tonne by central gencos, 28,85,000 tonne by IPPs and 6,05,000 tonne by state gencos. The state-owned power giant NTPC and NTPC-JV (joint venture) imported 49,39,000 tonne of coal in AprilJune this year. India has firmed up a plan to import around 76 million tonnes (mt) of coal to help plug a fossil fuel shortfall at its power plants in the current financial year. Im ports are necessary in the backdrop of blackouts due to an increase in electricity demand exacerbated by an intense heat wave. India’s power plants are cur rently burning around 2.1 mt of coal every day.
Power tariff to rise 60-70p per unit for blending imported coal: Minister Coal import for 10 per cent blending for the electricity plants to avoid blackouts will result in a rise in power tariff by 60-70 paise per unit. This has to be done to avoid power shortage as domestic coal supply is un able to match the electricity companies’ demand for the dry fuel, Union minister RK Singh said.
The Central Electricity Regulatory Commission (CERC) has extended Rs 12 per unit price ceiling in all market segments of power exchanges by three months. The earlier order lowering the price cap from Rs 20 was in force. The order said based on the assessment of demandsupply position in the power sector, it is felt that the high demand for electricity is likely to continue over the next few months due to increase in economic ac tivity, high agricultural load on account of sowing of kharif crops, and increase in household demand.
Discoms outstanding dues to gencos rise 4% to Rs 1.32 lakh crore in June
The minister remained optimistic that peak electricity demand of over 2 lakh MW would continue in future due to the government’s huge transmission network that made India the world’s largest single frequency grid, delivering power to every village, and raising the average electricity supply from 12.5 hours to 22.5 hours a day.
Total outstanding dues owed by electricity distribu tion companies (discoms) to power producers rose by 4 per cent year-on-year to Rs 1,32,432 crore in June 2022. Discoms owed a total of Rs 1,27,306 crore to power generation firms in June 2021, ac cording to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Trans parency in Invoicing of generators). On a sequential basis, total dues in June increased from Rs 1,30,139 crore in May 2022. In June 2022, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,15,128 crore as against Rs 1,04,095 crore in the same month a year ago. The overdue amount stood at Rs 1,07,636 crore in May Discoms2022. in Maharashtra, Tamil Nadu, Telangana, Andhra Pradesh, Uttar Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Jharkhand and Rajast han account for the major portion of dues to gencos, the data showed. Overdue of independent power pro ducers amounted to 53.17 per cent of the total over due of Rs 1,15,128 crore of discoms in June 2022. imported coal to avoid blackout as domestic coal production is not enough. Imported coal costs Rs 17,000-18,000 per tonne while domestic coal price is about Rs 2,000 per tonne. Due to this, it will result in a tariff rise of about 60-70 paise per unit,” Singh said. Speaking about coal imports, Singh said, it can be 2025 million tonnes this year for blending.
The power ministry has issued a clarification to the emergency clause invoked in May this year that man dated non-operational imported coal-based plants to start generation amid a sharp rise in power demand.
As per the dispensation issued last week, if the im ported coal-based plants do not get requisition from their consumer states for supply three days in ad vance for the next week, they can sell the power to another distribution company at an energy charge determined by a government panel plus fixed cost, a government official said. The states having power purchase agreements (PPAs) with the projects would not be required to pay the fixed costs for such duration. The clarification has been issued since prices on power exchanges have fallen due to low demand and the power projects are not able to operate.
CERC extends price cap on power exchanges till September 30
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The peak demand has been fluctuating and touched 204 GW in May 2022 and 212 GW in June 2022. Dur ing the period from May 7, 2022 till June 28, 2022, the percentage of blocks in a day with maximum clear ing price discovered at Rs 12/kWh ranged from 4% to 66% in Day Ahead Market (DAM) and from 2% to 53% in Real Time Market (RTM) at IEX, the order said Power plants can now sell surplus outside PPAs The government has allowed imported coal-based power plants to sell any surplus electricity to states
other than those with which they have supply tie-ups.
India has existing capacity of about 15 gigawatts of solar cell and module manufacturing and the addi tion of 50 gigawatts is already under way, according to Singh. Foreign investment in renewables is aver aging about $9 billion to $11 billion a year, and is “go ing to go up exponentially.
IREDA committed to increasing participation of MSMEs in RE by offering more loans
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The Indian Renewable Energy Development Agency (IREDA) said it is committed to increasing participa tion of MSMEs in the green energy sector by offering more loans, its Chairman and Managing Director Pra dip Kumar Das said. Das said while MSMEs only represent 1.86 per cent of the company's total loan assets of Rs 33,884 crore (as of May 2022), the IREDA is attempting to address the issues of MSMEs in order to increase their partici pation in the renewable energy (RE) sector. He emphasised that the target of 500 GW of RE ca pacity by 2030 cannot be achieved without the con siderable participation of MSMEs, and therefore, their efforts will be a crucial driver of Aatmnirbhar Bharat.
India stays on track to be a solar and green hydrogen powerhouse India is on track to become a global force in green hydrogen and challenge China’s dominant role in the solar energy sector, according to the nation’s power Rapidlyminister.rising investments in renewables, including from overseas, are helping to position India as a key future supplier of clean energy technology and as an exporter of low-emissions hydrogen and ammonia.
The proportion of central PSU gencos in the overdue was 22.4 per cent.
The power ministry official also said that in addition to 27,000 circuit kilometres by 2024, India would need to build transmission lines to evacuate 180GW generation capacity, which will ultimately help the country to realise its gaol of having 500GW of renew able energy by 2030.
Green Hydrogen will overcome challenges faced by fossil fuel industry: Minister Puri Ministry of Petroleum and Natural Gas Shri Hardeep Singh Puri said that when allowed to flourish, Green Hydrogen will overcome the challenges that were
India On Track To Add 27k Circuit Km Power Transmission Lines
By 2024: Official India is poised to add 27,000 circuit kilometres of in ter-state power transmission networks by 2024 as it has already added 6,500 circuit kilometres or almost one-fourth of the target.
The power transmission network expansion has been planned keeping in mind the ultimate goal of having 500 GW of non-fossil fuel based electricity generation capacity in the county. 10,000 circuit kilometres lines are already under con struction while 10,500 circuit kilometres are at vari ous stages of bidding or tendering. The inter-state transmission link plays an important role in power generation capacity addition.
A major barrier for MSME entrepreneurs is the in ability to get loans with reasonable interest rates, but the IREDA has significantly improved the ease of doing business in terms of faceless loan sanctions and disbursements, reduction in loan sanction, docu mentation and disbursement cycle, and increased geographical footprint in the country.
India currently accounts for only a fraction of pro duction of solar cells and modules. Both sectors are controlled by China, which manufactured more than two-thirds of modules and 86% of cells in 2021.
faced by the fossil fuel industry. He said that it will provide momentum to India’s journey towards energy independence by 2047. India has a huge edge in green hydrogen production, owing to its favourable geographic conditions and presence of abundant natural elements. The stakeholders deliberated upon ways to develop the entire green hydrogen ecosystem in a way that India is able to realise country’s full potential to create a $12-13 trillion industry by 2050.
CESL begins deliberations on expediting deployment of 50,000 electric buses across India State-owned Convergence Energy Services Ltd (CESL) with the help of World Resources Institute India (WRI India) has begun deliberations to expedite deployment of 50,000 electric buses on Indian roads by After2030.the success of the Grand Challenge that helped discover the lowest-ever prices for electric buses (e-buses), CESL, supported by WRI India, kick-started deliberations to expedite the deployment of 50,000 electric buses (e-buses) on Indian roads by 2030, a statement said. Under the Grand Challenge, the CESL has begun the deployment of 5,450 e-buses across five cities: Bengaluru, Delhi, Hyderabad, Kolkata and Surat. This tender, based on a gross cost contracting model, discovered rates that were 27 per cent and 23 per cent lower than those of diesel and compressed natural gas (CNG) buses respectively (without national subsidy).
The Public sector undertakings of the Government have invested in commercial scale implementation of Battery Energy Storage Systems along with Solar PV Projects. The Government of India is also supporting some of the storage projects through grant support said, Shri R.K Singh, Union Minister for Power and New and Renewable Energy in a written reply in Rajya SolarSabha.Energy Corporation of India (SECI), a CPSE under the Ministry of New and Renewable Energy has undertaken the implementation of these three 1.4projectsMW Solar PV Project with 1.4 MWh Battery Energy Storage System in Kavaratti Island, UT of Lakshadweep (supported through MNRE Grant). 50 MWp SPV Project with 20 MW/50 MWh BESS at Phyang, Leh, UT of Ladakh (supported by GoI grant under the PMDP 2015). 100 MW SPV Project with 40 MW/120 MWh BESS at Rajnandgaon, State of MinistryChhattisgarh.ofPower has notified Bidding Guidelines for Procurement and Utilization of Battery Energy Storage Systems as part of Generation, Transmission, and Distribution assets, along with Ancillary Services on March 11, 2022. Energy Storage Projects at grid scale are currently under the implementation stage. India’s largest Floating Solar Plant commissioned at NTPC Ramagundam NTPC Ltd, India’s largest integrated energy company, has declared the COD of the last part capacity of 20 MW out of 100 MW Ramagundam Floating Solar PV Project. Ramagundam Floating Solar PV Project is India’s largest Floating Solar Plant commissioned by WithNTPC.the successful commissioning, the last part capacity of 20 MW out of 100 MW Ramagundam Floating Solar PV Project at Ramagundam, Telangana is declared on Commercial Operation w.e.f. 00:00 Hrs. of 01.07.2022. The total installed capacity of the company is 69,134.20 MW having 23 coal based, 7 gas based, 1 Hydro, 19 renewable energy projects. 2022
PSUs under Govt invest in Energy Storage Technologies along with Solar PV Projects: R. K Singh
Describing the hydrogen as the fuel of the future, Shri Puri emphasized on accelerated timeframe for the sector. He said that the oil and gas PSUs have taken a number of pilot projects in the sector, some of which will start showing results this year itself. The Minister said that India, being the large growing economy, is going to be the hub of Green Hydrogen.
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The union ministry of new and renewable energy (MNRE) is considering giving incentives to companies in the offshore wind energy space including the waiver of transmission charges, renewable energy credits, carbon credits benefits and viability gap funding (VGF) among others.16 zones have been identified in total, off the coasts of Gujarat and Tamil Nadu for harnessing offshore wind energy.
The expansion would be largely funded from the Series B funding round of $45 million, Chatila said. In April, the company announced the closure of the Series B funding round led by existing investor Fenice Investment Group with participation from other existing investors and a new investor, Energy Transition Ventures.
Electrolyzer firm Ohmium to lift India output fourfold
The company has a 500MW capacity facility in Karnataka and is ramping up the factory there. The company would be able to increase its production capacity fourfold as most of the components and technology are in-house.
GE commissions 180-MW Bajoli hydro project
GE Renewable Energy's Hydropower business, part of GE Power India Ltd (GEPIL), has commissioned the 180-MW Bajoli Holi Project, in Himachal Pradesh. Three units of 60 MW each have been generating electricity since the project was connected to the grid in March 2022, a company statement said. According to the statement, the 180-MW run-of-theriver power facility has a head race tunnel of more than 16 km and has been constructed on the river Ravi in Chamba district of Himachal Pradesh. The completion of this project is a step towards using the power potential of the state to support both Himachal Pradesh and the entire northern region of India, the statement said.
Centre considers incentives for offshore wind energy
The Bajoli Holi Hydropower Plant generates 94 per cent of energy required by the Delhi International Airport Limited -- the last 6 per cent coming from on-site solar power plants. As an engineering and manufacturing supplier of the Bajoli Holi Hydropower Plant, GE Hydro Solutions has cooperated in overcoming challenges and difficulties during the entire execution of the project.
Ohmium India, an arm of US-based renewable energy startup Ohmium International plans, aims to increase its production capacity fourfold to 2GW a year by December. The India unit, which runs the company’s only facility manufacturing electrolyzers, is also exporting to the US and aims to ship electrolyzers to Europe soon.
Currently, one zone off the coast of Gujarat shall be initially considered under this model. Under this model, MNRE or its designated agency will enter into a lease agreement for 30 years with the successful bidders. The offshore wind power developer shall be required to pay the annual floor lease fee of 1 lakh per square kilometre per year for the entire lease period.
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The ministry has proposed to take three approaches or models for development of offshore wind energy projects. The first model would be followed for demarcated offshore wind zones for which the ministry has carried out detailed studies and surveys.
Coal India Ltd (CIL), Singareni Collieries Company Ltd (SCCL) and captive mines/others registered a growth of 28.87 per cent, 5.50 per cent and 83.53 per cent by producing 51.56 MT, 5.56 MT and 10.47 MT, respectively, the ministry said citing its provisional data. Of the top 37 coal mines, as many as 22 mines produced more than 100 per cent, and production at
DOMESTIC COAL 16 | CCAI Monthly Newsletter July 2022
“Going forward, given the coal supply challenges during the ongoing monsoon season, the rating agency expects domestic coal prices to remain elevated in the current quarter as well,” Icra said in a Powerstatement.cost, it said, has risen substantially for domestic base metal companies, owing to lower availability of linkage coal to non-power sectors and elevated coal prices in both international and domestic markets.
Domestic coal prices to remain high in current quarter as well: ICRA Rating agency Icra has said it expects prices of domestic coal to remain high in the ongoing quarter as well given the supply challenges of the dry fuel during monsoon. The domestic e-auction premium on coal increased by over 400 per cent in May, thereby adversely impacting the cost structure of the base metal companies and margins.
Coal output grows 32 pc to 67.59 MT in June; despatches rise 20% Domestic coal production rose sharply by 32 per cent to 67.59 million tonnes (MT) in June 2022 compared to 50.98 MT in the same month last year.
Shipments from other top suppliers Australia and South Africa were lower compared with the same period last year but higher compared with imports in May, Imports from the United States fell to the lowest in four months. However, overall coal shipments this year are yet to exceed pre-COVID levels. Total imports in the Jan-June period were 119.5 million tonnes, 0.6% lower than 2019.
India’s coal imports hit record high in June
Coal mining PSUs and Indian Railways have ramped up supply of the crucial commodity during the AprilJune quarter, a key period for stocking the dry fuel before monsoon disrupts movement. According to the latest provisional numbers from the Coal Ministry, mining PSUs such as Coal India (CIL) and Singareni Collieries Company (SCCL) ramped up coal despatch to the power sector by 22.42 per cent on a Y-o-Y basis in Q1FY23. For Power and non-Power Sector (NPC), despatches were up cumulatively. Supplies to key non-Power Sector (NPS) industries like Steel and Cement too were higher in Q1FY23 on an annual basis by 35.23 per cent and 6.64 per cent, respectively. However, the despatch to another key consuming industry, Sponge Iron was down marginally by 0.8 per cent during the same period.
Coal India says enough supplies, advises power plants to stock up National miner Coal India Limited (CIL) said the country has enough supplies, but power plants must stock up before monsoon shapes production at mines.
CCAI Monthly Newsletter July 2022 | 17
India’s coal imports hit a record high in June despite high global prices, data from three trade sources and Refinitiv ship tracking showed, as economic activity picked up and amid a domestic shortage of the fuel.
India imported over 25 million tonnes of thermal coal and coking coal in June, rising by over a third compared with the same period last year. Imports of thermal coal - used mainly in electricity generation - jumped to 19.6 million tonnes, while shipments of coking coal - used in steelmaking - rose to about 5.4 million tonnes. Thermal coal imports jumped 40%, while imports of coking coal surged Coal23%. shipments from top supplier Indonesia more than tripled to a record 14.5 million tonnes, while imports of coal from Russia nearly doubled to 1.2 million tonnes. The imports included thermal, coking, PCI coal and anthracite
The cooperation with Russia will help India reduce its dependence on far-located countries like Australia, South Africa, Canada and the US for sourcing of coking coal. It will also reduce per-tonne cost of steel production, as Russia is geographically closer compared to the said countries. The objective of the MoU is to strengthen cooperation between India and Russia in the steel sector. The activities involved in the cooperation are aimed at diversifying the source of coking coal, it had said.
another nine mines stood between 80 per cent and 100 per cent. At the same time, coal despatch also increased by 20.69 per cent to 75.46 MT from 62.53 MT as compared to June 2021. During June 2022, CIL and captives/others registered a growth of 15.20 per cent and 88.23 per cent by despatching 58.98 MT and 11.05 MT, respectively. The despatch to power utilities has grown by 30.77 per cent to 64.89 MT during June this year as compared to 49.62 MT in June last year due to increase in power demand. The overall power generation in June 2022 has been 17.73 per cent higher than in June 2021.
Gearing up for monsoon, Coal PSUs and Railways ramp up supply in Q1 of FY 22-23
India may increase coal imports from Russia to 40 MT by 2035: Russian official India is ready to raise thermal and coking coal imports from Russia to 40 million tonnes tonnes by 2035, provided logistics issues are fixed, a Russian official said. The statement assumes significance as several parts of India had witnessed power outrages in the wake of coal shortages in the summer months of April and May.
As per data provided by the Central Dispatching Department of Fuel Energy Complex, Russia exported 214.37 MT of coal last year. Around 85 per cent of India's coking coal demand is met through imports.
CIL has a stockpile of around 43 million tonne (MT). Besides that, the inventory at power plants is 26.2 MT and coal awaiting transportation at private washeries, goods sheds and ports is 4.6 MTs, CIL told 'Business CILStandard'.recently issued a tender for purchasing imported coal for power-generating companies (gencos) after the central government directed it to meet the shortfall in the domestic supply chain. CIL has called for bids to supply 2.4 mt of coal to be delivered for the July to September 2022 period. Additionally, it has also issued two more medium-term tenders for sourcing 3 mt each at the western and eastern ports of the country for future stocks.
The coal ministry has approved a draft Cabinet note to sell 25% of state-run Coal India’s consulting unit, Central Mine Planning & Design Institute, and Bharat Coking Coal Ltd to the public. The other subsidiaries that may go public are Central Coalfields Ltd, Eastern Coalfields Ltd, Mahanadi Coalfields Ltd, Northern Coalfields Ltd, South Eastern Coalfields Ltd and Western Coalfields Ltd.
18 | CCAI Monthly Newsletter July 2022
Green clearances to 83 projects of Coal India: Government Green clearances have been accorded to 83 mining projects of state-owned Coal India Ltd in the last two years, Parliament was informed. Environmental clearance granted for 60 proposals with an incremental capacity of 104.86 Mty (million tonnes per year). Stage-I forest clearance granted for nine proposals involving 934.96 Ha of forest land. StageII forest clearance granted for 14 proposals involving 2580.68 Ha of forest land, Coal Minister Pralhad Joshi said. The minister further said that 53 project reports, including expansion projects, have been approved by Coal India and its arm for building additional production capacity of dry fuel. "These projects will add additional capacity of about 278 Mty…and projected to contribute additional production of about 102 Mt by FY 24-25," Joshi explained. Work awarded for six Mine Developer and Operator (MDO) Projects with aggregate capacity of 96.74 million tonnes per year. Six first mile connectivity projects of coal handling plant (CHP), silos have been commissioned with an aggregate capacity of 82 million tonnes per year With 36% Q1 sales growth,
Analysts said coal companies may garner investor interest in the near term because of red-hot prices. However, the fuel’s long-term future appears bleak as environmental compulsions and strict climate targets may force investors to shun them. “Coal and other fossil fuels seem to be in favour now amid the geopolitical tensions and the supply constraints. But, in the years ahead, investors are unlikely to buy these shares. Both foreign institutional investors and domestic corporates are slowly moving away from investment in fossil fuel-based companies Coal India to source more from medium-term tender, scraps short-term import bid Coal India Ltd has cancelled its short-term tender for which Adani Enterprises Ltd emerged as the lowest bidder and plans to source more coal through a medium-term tender which is offering the fuel at a lower price. The state-run Coal India issued a short-term tender that aimed at supplies for July-September in the current fiscal year and a medium-term bid for securing coal till mid-2023. This is the first time that India’s largest coal producer will import the fuel, as demand for electricity spikes. In June, the company floated international competitive bids to source coal for the short and medium terms. This included two international competitive bidding e-tenders for 3 million tonnes (MTs) each to source coal from abroad in the medium term, which had the option of increasing the bid quantity by 100 percent to 12 MTs. The last date for receiving the bids was July 5. Subsequently, PT Bara Daya Energy emerged as the winner of the two bids to supply a total of 6 MT by 2023.
The company said along with CIL's import tenders, several power units have already placed import orders for 26.7 MTs and another 10 MT tenders are under process Coal India plans to take all eight subsidiaries public Coal India Ltd is looking at taking all its eight subsidiaries public as prices of the fossil fuel soared after power demand rebounded from the pandemic, a government official aware of the development said.
19 | CCAI Monthly Newsletter May 2021
Export duties on steel likely to go; levy on iron ore may be increased
The government is likely to cut or abolish the recentlyimposed export taxes on key steel products soon, while also raising the import on iron ore dispatches, sources told FE. The move comes amid concerns expressed by steelmakers that while domestic demand has remained muted in recent months, companies are losing out overseas customers due to the export taxes.
STEEL CCAI Monthly Newsletter July 2022 | 19
In terms of production, the public sector coal company has mined 16.92 million tonnes of coal during the April-June quarter of 2022-23 against the target of 17.02 million tonnes. Last year, the production was 15.57 million tonnes in the first quarter. The dispatches of coal, however, crossed the target as they were at 17.3 million tonnes against the target of 17.02 million tonnes. Last year, they were at 16.7 million tonnes. the company has posted 8,670 crore sales during the April-June quarter this fiscal against 5,374 crore sales achieved during the same period in 2021-22. The growth rate was highest among all other public sector coal companies in the country during the first quarter, they claimed. India to double steel production in eight years to 240 MT: Union Steel Minister Jyotiraditya Scindia Stating that steel plays a major role in the country's economy, newly-appointed Union Steel Minister Jyotiraditya said India's steel production will double from the current 120 million tonnes to 240 million tonnes in the next eight years. The middle and small scale industries also play a major role in the steel sector, accounting for nearly 50-52 per cent production through their nearly 3,000 units. I will ensure that the production of steel in the country will enhance by taking medium and small industries along with the large units”, he said. Scindia said steel plays a major role in industries like construction and automobiles. Steel, sponge iron players scramble for coal supplies India’s secondary steel-makers, including sponge iron mills, are scrambling to secure coal supplies after Coal India, the country’s largest coal miner, refused to give them assurance on renewal of supply contracts or provide a timeline for mine linkage auctions.
Moving in to rein in input prices and control runaway inflation, the government on May 22 imposed an export duty of 15% on select pig iron, flat-rolled products of iron or non-alloyed steel, bars and rods and various flat-rolled products of stainless steel and another 45% on iron ore pellet. Similarly, the export duty on iron ores and concentrates was raised to 50% from 30%. According to an Icra report, the 15% duty covers products that accounted for 95% of the country’s finished steel exports in the last two fiscals and would render exports significantly less attractive going Respondingforward.to the move, the average monthly price of hot-rolled coil (HRC) – a benchmark for flat steel –eased in May to Rs 69,800 per tonne from Rs 76,000 in April. The average price dropped further in June (when the first full-month impact of the expor t curb was felt) to Rs 62,000 and to Rs 59,800.
Singareni aims for 74 MT coal production TBuoyed by the record growth of 36% in the coal and energy sales during the first quarter of the current fiscal, Singareni Collieries Company Ltd (SCCL) is eyeing a record production beyond the target of 70 million tonnes with the management aiming for 74 million tonnes.
Linkages and contracts for many are set to expire in July-August in the backdrop of the monsoons, a lean period for mining. Coal India has told some mills that it will not be renewing supplying contracts “for an indefinite period”. Mills can opt for single window auction for obtaining coal. Most mills are dependent on Industryimports.representatives say, the average stock available with them is to the tune of 15-odd days versus a normal 2-months of stock. CareEdge said share of coal despatch to sectors like cement, steel, sponge iron, fertilisers, textiles, chemicals, paper and pulp, etc declined, while volumes de-grew by around 8.7 per cent on a base of 17.8 million tonnes in FY22 to 16.3 mt during FY23 ( April to May).
Consolidated revenue for the quarter grew 15 per cent year-on-year to Rs 4,468 crore, up from Rs 3,885 crore in the year-ago period. On a QoQ basis, the revenue grew marginally by 0.9 per cent from Rs 4,427 crore in the previous quarter. While profit declined by 42.6 percent from Rs 396 crore in the previous quarter. The company follows a JanuaryDecember financial year.
Three new Indian concrete companies have separately secured agreements for the use of Finland-based Betolar’s Geoprime alkali-activated slag and fly ash additive.
Reuters News has reported that the companies are Balaiji Cement Products, Shiv Tiles and SNEH Precast. Engineering company Godrej & Boyce has also signed a letter of intent with the supplier for pilot production of concrete blocks, paving slabs and other Betolarelements.expects producers to achieve global concrete production volumes of 250,000t/yr of concrete containing Geoprime by 2023
CEMENT 20 | CCAI Monthly Newsletter July 2022
The June quarter was impacted by a moderation in demand and prices as well as elevated costs of power and pet coke, sector analysts said.
Cement prices recorded an increase of 15-17 per bag in January-February across India, peaking at 390 per bag. The prices marginally reduced by 3 per bag in March. In the April-June quarter, all-India average cement prices were up by 25 per bag. The major cause for this price increase is the rise in fuel prices, which enhances the cost of cement production Cement maker ACC's profit tumbles 60% in April-June, revenue rises 15%
One industry source said steel price, falling continuously since the first week of April, is unlikely to go up soon even as imports of both finished steel and coking coal will be getting more expensive. At best, this will help the industry to boost capacity utlisation level which currently stands at 80-85% and reduce their inventory level. Struggling to rein in inflation, the government had with effect from May 22 imposed 15% tax that covered around 95% of the steel export basket
Betolar customers to produce 250,000t/yr of Geoprime concrete by 2023
Bloomberg consensus estimates had pegged net profit at Rs 296 crore and revenue at Rs 4,390 crore for the period under review.
According to the latest report by ICICI Securities, cement prices in the northern and central regions of India are likely to be 9-10% higher in the second quarter of fiscal year 2023 compared to last year. East and west India may witness 6-7% increase in July-September, compared to last year, while the prices in south India may remain flat.
Cement maker ACC, which was recently acquired by the Adani group along with Ambuja Cement in a $10.5-billion deal, reported a 60 per cent year-onyear decline in consolidated profit after tax (PAT) to Rs 227 crore for the quarter ended June 30, 2022. In the corresponding period last year, consolidated PAT stood at Rs 569 crore, its financial results show.
Cement companies are girding for tougher times as rising fuel costs bite The recent increases in cement prices are unlikely to translate into gains for the cement companies. Investors should be prepared for lower operating margins for cement companies like UltraTech Cement, Shree Cement, JK Cement and others in the July-September quarter.
Steel exporters’ tax burden may decline The depreciation of rupee to 80 a dollar has lessened domestic steel firms’ export tax burden by a little over three percentage points and provided them with the leeway to increase capacity utilisation as imports will no longer remain lucrative for traders. However, since domestic steelmakers mainly use imported coking coal in the absence of local availability to fire their blast furnaces, imports of the raw material will become expensive. Industry officials said the costlier raw material will not have any significant impact on production cost immediately as the impact comes with a lag.
There has also been an increase of 7 per cent in freight leads, or the distance travelled for transportation of goods, which is a source of higher revenue for the railways. The net tonne kilometres (ntkm) for the month stood at 75.8 billion, growing by over 12 billion.
Rlys freight grows 11% on year in June at 125 MT, gains from loading coal Amid rising coal demand and efforts to diversify its freight basket, loading by the Indian Railways grew 11.3 per cent on year in June to reach 125.5 million tonnes (MT). With this, the national transporter has ferried 379 MT of goods and raw materials in the April-June quarter, witnessing a growth of 40 MT against the same period last fiscal year. “This growth has been fuelled by incremental loading of 13.19 MT in coal, followed by 1.68 MT in cement and clinker, 1.57 MT in balance and other goods and 0.64 MT in foodgrains,” the Ministry of Railways said.
The draft national coal logistics plan has pointed out that oversized coal is leading to higher wagon turnaround, a scenario which analysts say is not just adding to freight costs but also exacerbating the coal supply crisis. “Oversized coal increases wagon turnaround, resulting in higher freight costs via demurrage. So, coal sizing is crucial and must be done properly. Additionally, on tipplers, such oversized lumps constitute a significant challenge when handling coal at power plants,” the draft plan
Oversized coal impacts freight costs, wagon turnaround time: Draft National Coal Logistics Plan
RAILWAYS & SHIPPING CCAI Monthly Newsletter July 2022 | 21
Indian Railways suggested the Coal Ministry to focus on efficiencies by reducing the loading time at colliery sidings and to avoid loading over-sized boulders on rakes. Railways has already improved the WTR by 16 per cent during September 2021 to February 2022 and more efforts are underway to further improve the situation.
Miscellaneous items (balance and other goods) also saw an increase of 17 per cent on year at 10.2 MT in June. These items mostly consist of finished goods, and railways has been vying to increase its share in this department. Currently, its freight basket remains dominated by raw materials.
These changes can lower the cost of moving coal from east India to Gujarat Urja Vikas Nigam Ltd's Wanakbori power plant by Rs 200 per tonne. Similarly, other Gujarat/Maharashtra-based power plants in Gandhinagar, Ukai, Dhanau that have SECL linkages, can be evaluated for shift to MCL by adopting railsea-rail route.
Shipping Ministry proposes coastal routes to move coal produced in eastern India Shipping ministry officials said coastal shipping routes have been proposed to ease the congestion on railway lines and rake shortages during peak demand seasons. According to shipping ministry officials, the movement of coal from Paradip to other ports along the eastern coast is feasible considering the vacant capacity at ports in the region and proximity to power plants in southern India. A longer route of moving coal from eastern India to Gujarat is also being considered. This route was proposed by an Asian Development Bank (ADB) study commissioned by the Centre. According to ADB's estimates, certain thermal power plants have existing linkages with SECL, which is about 600 km from Paradip port. Shifting the linkage from SECL to MCL will reduce the first mile distance by 200 km from mine to load port. It will also reduce the total cost of coastal shipping, which will be lower than current rail cost from SECL.
Therecommended.draftplan pointed out that the process of manually unloading one rake (58-60 wagons) takes about five hours. A rake typically has around 58 wagons and carries about 3,800-3,900 tonnes of freight. To make matters more complex, the wagons must be re-joined into a rake and freed from the wagon tippling area in a limited time scale with zero damage to them after being emptied one at a time. Furthermore, keeping the wagons longer than the time limit or causing damage due to inefficient operations results in a significant financial penalty for the corporation in the form of railway demurrages.
Global coal demand is set to return to its all-time high in 2022
Based on current economic and market trends, global coal consumption is forecast to rise by 0.7% in 2022 to 8 billion tonnes, assuming the Chinese economy recovers as expected in the second half of the year, the IEA’s July 2022 Coal Market Update says. This global total would match the annual record set in 2013, and coal demand is likely to increase further next year to a new all-time high.
The world’s consumption of coal is set to rise slightly in 2022, taking it back to the record level it reached nearly a decade ago, according to an IEA report published recently which notes that significant uncertainty hangs over the outlook for coal as a result of slowing economic growth and energy market turbulence.
GLOBAL 22 | CCAI Monthly Newsletter July 2022
The new report highlights the significant tur moil in coal markets in recent months, which has important implications for many countries where coal remains a key fuel for electricity gen eration and a range of industrial processes. At the same time, the world’s continued burning of large amounts of coal is heightening climate concerns, as coal is the largest single source of energy-related CO2 emissions.
Worldwide coal consumption rebounded by about 6% in 2021 as the global economy re covered rapidly from the initial shock of the Covid pandemic. That sharp rise contributed significantly to the largest ever annual increase in global energy-related CO2 emissions in abso lute terms, putting them at their highest level in history.
In its latest weekly report, shipbroker Intermodal said that “amid the upcoming ban on Russian coal from the EU, which will be in full effect on August 10th, EU nations have been accelerating their coal imports as a direct reaction to the threat of a reduction in gas supply from Russia. The ban comes at a time when coal trade is already tight. As a result, thermal coal prices have been surging on the back of tight supply and geopolitical tensions”. According to Intermodal’s Research Analyst, Ms. Chara Georgousi, “considering that the EU was importing approximately 35-40mn tonnes/ year from Russia, these cargoes need to be supplied from elsewhere, namely US, Australia, South Africa, and Colombia. US accounts for the largest exporter of thermal coal to Europe at the moment, with exports surging to 11.2mn tonnes during 1H22, noting a 91.6% y-o-y increase.
Amid intensified sanctions, US Government is exerting pressure on miners to increase production, therefore, trade flows from US to EU ports (mainly Netherlands and Germany) are expected to increase within 2H22”.
Seaborne Coal Market Growing
Dry Bulk Market: Coal Trade a Boon for Bulkers Coal imports of up to 40 million tons, coming into the EU from Russia, need to be replaced from other sources. This could present a significant opportunity for the dry bulk market.
The global seaborne coal market has grown yet again, over the course of the first half of 2022, following the significant rise of 2021. In its latest weekly report, shipbroker Banchero Costa said that “following a disastrous 2020, with the world hit by lockdowns and recession pretty much everywhere, global seaborne coal trade managed to rebound to some extent in 2021. In the full 12 months of 2021, global seaborne coal exports increased by +4.5% y-o-y to 1149 mln tonnes, from 1099 mln tonnes in 2020, according to vessels tracking data from Refinitiv. This however was still well below the levels we had in pre-Covid times, being -10.0% down from the 1276 mln tonnes shipped during 2019. In the first half of 2022, global coal trade was a bit of a mixed picture. In the January to June period of 2022, global coal loadings increased by +1.5% y-o-y to 572.7 mln t, from 564.1 mln t in the first half of 2021, but still well below the 637.9 mln t in 1H 2019. According to the shipbroker, “the European Union is now the fifth largest seaborne importer of coal in the world, after India, China, Japan and South Korea. In 1H 2022, the EU accounted for 10.4% of global seaborne coal shipments. The EU’s seaborne coal imports in the 12 months of 2021 increased by +30.3% y-o-y to 87.1 mln tonnes. This was mostly a rebound from a massive -32.9% y-o-y decline in 2020 caused by Covid lockdowns. Previous years also saw a negative trend, with European coal imports declining by -18.3% y-o-y in 2019 and by -7.6% y-o-y in 2018, as European countries progressively abandon coal as a source of energy and embrace natural gas and renewables. In the first 6 months of 2022, coal imports into the EU further increased by +49.6% y-o-y to 57.6 mln tonnes. Europe accelerated its coal imports as a direct reaction to the threat of a reduction in gas supply from Russia. This compensated for the sharp drop in demand from Mainland China.
Australia’s resources exports break records amid global energy crisis Australia’s mining and energy exports are expected to have hit a record-high of more than $400 billion as the fallout from Russia’s invasion of Ukraine deepens global shortages of coal and natural gas and sends commodity prices Federalsoaring. government trade data to be released reveals a 26 per cent increase in export earnings in the past financial year, from $320 billion in 2020-21 to an estimated $405 billion.Earnings from coal and liquefied natural gas (LNG) – the nation’s second and third-largest exports – have
CCAI Monthly Newsletter July 2022 | 23
Indonesia set to boost coal output to fill Russia supply gap
24 | CCAI Monthly Newsletter July 2022
The longer-term outlook for coal, however, remains deeply uncertain and will depend largely on how aggressively countries seek to decarbonise their economies by shifting to cleaner sources of energy.
Indonesia, the world's biggest exporter of coal used in power plants, will be able to increase output to help meet demand from countries that have lost supplies from Russia, its energy minister Countries,said.which he declined to name, had asked Indonesia for coal in the wake of sanctions on Russia for its invasion of Ukraine, which Moscow calls a "special military operation". "We will help every country who are short of this kind of material as much as we can," Energy and Mineral Resources Minister Arifin Tasrif said during an interview with Reuters on the ulInternational Energy Agency.
both more than doubled in the past 12 months, the trade figures reveal.
Its latest Quarterly Energy Dynamics report paints a bleak picture of the risks of relying on legacy fossil fuel industry, prone to outages, plant failures, soaring fuel costs, and bidding patterns that combined to push the price of electricity to unsustainable levels.
Indonesia's target for coal output this year is 663 million tonnes. The minister did not say by
Queensland's 2022 coal exports poised for decline
Australia coal Trade China's coal trade with Australia still has "huge potential", increasing domestic production, imports from Russia and an emphasis on an uncompetitive price could potentially lift its unofficial ban on the world's biggest buyer.
.
The Australian Energy Market Operator has called for an accelerated shift to wind and solar, backed up by batteries and other storage, as a devastating combination of coal plant failures and soaring fossil fuel costs and bidding changes pushed electricity prices to unprecedented levels in the June quarter.
In late 2020, as tensions escalated between Beijing and Canberra, China imposed an informal ban on Australian coal, effectively ending imports from the country's once-important supplier.
Australia's Queensland coal shipments are on track for a third straight year of decline, as wet weather disrupts supply, and China's Covid-19 lockdowns and inflation curtail demand. Shipments from the four largest coal ports in Australia's Queensland were at 17.36mn t in June, down by about 1mn t compared to a year earlier, despite drier weather after a wet May. The ports shipped 94.33mn t in January-June, down from 99.65mn t a year earlier, putting them on track to dispatch less coal in 2022 than the 197.29mn t shipped in 2021 and the peak of 219.24mn t in 2019. Australia regulator calls for fast transition, citing coal failures and prices
However, as tensions begin to ease amid concerns that global coal supplies could harden as the impact of Western-led sanctions on Russian energy exports, some Chinese bureaucrats are reportedly proposing that Senior leaders lift the ban. After a few years of sporadic diplomatic and business contact, it is possible to lift the ban, and the rhetoric favors it. Senior ministers of the new Australian government met with their counterparts in Beijing.
China is planning for lifting ban on China
With Best Comp liments From : Sharda Ma ( ) COAL M ERCHANTS, IM PORTERS & HA NDLING AGENTS IND IA SO UTH AF RICA INDONE SIA S INGAPORE HONG KONG NIGERIA UGF 1& 2, Kanc henjunga Building, 1 8 Barakhamba Road, New Delhi 110001, India P : +91 11 23 354046/47 F : +9 1-11 -23354047 E : corpor ate@sharda maa.com W : www .shar damaa .c om Logistics Pvt. Ltd. Handling and Transportation of Coal both by Rail and Road and also via Rail cum Road mode from SECL and other Subsidiary Coal Companies of Coal India Limited 352, Agarwal Chambers, 3rd Veer Savarkar Block Shakarpur, Delhi - 110095 Phone: +91 1141 510 186, Email: nj@shardamaa.com
Indonesian coal miners mull revising 2022 production targets downwards Indonesian thermal coal miners are mulling lowering their production targets for 2022 because of unavailability of heavy equipment and unseasonal rains, sources told S&P Global Commodity Insights.
“We are discussing a revision of the production plan that we submitted to the government to lower it for this year because the heavy machinery we require is not available,” one Indonesia-based producer said.
EU cuts down Russian coal imports ahead of bloc-wide ban
how much that target might be raised. "We have the resources. If we look at the balance, we have to increase our production," he said, adding that miners are obliged to reserve 25 per cent for the domestic market.
U.S. Should Begin Exporting More Coal to European Nations
Against the backdrop of war in Ukraine, U.S. coal shipments to Europe are playing a quiet yet critical role in keeping the lights on from Rome to Amsterdam. If the shipments continue through the winter — and are ramped to replace the loss of Russian fuel — they will save millions of people from freezing in the dark.
Although the U.S. has been supplying Europe with more gas, principally LNG, its cost has soared and not nearly enough LNG can be produced in the U.S. in the near term to meet Europe’s needs. So U S coal is serving as a replacement fuel, saving Europe from potentially severe electricity and heating shortages, while enabling the allies to achieve a modicum of energy independence. Coal, because it is cheap and abundant, is a
26 | CCAI Monthly Newsletter July 2022
The EU has drastically scaled back its imports of Russian thermal coal ahead of a full ban next month, compounding fears over an intensifying energy crisis in the bloc.
The world’s biggest consumer of the fossil fuel brought in 6.12 million tonnes of coal from Russia last month, data from the General Administration of Customs showed. That compares with 5.01 million tonnes in May and 5.24 million tonnes in June 2021. China has been increasing coal imports from Russia since March, when global coal prices soared to record highs but Russian cargoes were traded at steep discounts as western allies weaned themselves away from doing business with Moscow after Russia attacked Ukraine.
“There is no penalty in producing lower volume than what you submitted as per the plan at the start of the year, but if one produces less volume, the approval for next year could be lower,” the producer said. Another producer said that machinery had not been arriving in a timely manner since the start of the year, forcing miners to recalibrate production numbers. China's imports of Russian coal rise 22% due to cheaper cargoes
China’s coal imports from Russia rose 22% in June from a month ago despite a decline in its total coal purchases, as traders were drawn to discounted cargoes following western sanctions on Moscow over the war in Ukraine.
Just 1.7mn tonnes of Russian coal, used for power generation, were shipped by sea to the EU in June, a decline of 48 per cent compared with May as western powers extended their punitive measures against Moscow following its invasion of Ukraine. That marked the biggest monthly drop since at least 2019, according to commodity consultants CRU. Europe receives most of its coal through the port of Rotterdam.
Coal production is up from last year, but dramatically higher prices are not translating to a similar increase in supply. U.S. coal production is up six percent from the first quarter of 2021, according to federal data from the Energy Information Administration. But most of that growth was in Western states.
great boon for energy-strapped Europe. U.S. coal exports to Europe rose more than 140 percent in May compared to a year earlier — and they are continuing at that increased level, because Europe desperately needs coal for electricity generation to supplant Russian gas that stopped flowing due to sanctions against Russia for its unprovoked invasion of Ukraine.
Global top five players hold a share about 50%.
CCAI Monthly Newsletter July 2022 | 27
West Virginia coal production was up 3.6 percent in the first three months of the year, while Appalachian coal production was down 1.2 percent. Coal is bringing in record prices: $168 a ton for Central Appalachian coal, and $141 a ton for Northern Appalachian coal, more than double what they were a year ago. Illinois Basin coal is $190 a ton on the spot market, up from about $35. Still, U.S. coal consumption fell four percent in the first quarter of 2022 from the first quarter of 2021. And exports of U.S. coal used to make electricity and steel both fell in the first quarter of 2022 from the fourth quarter of 2021. Global Underground Mining Equipment Market to Settle at 6.8% Growth Rate by 2022-28
Underground Mining Equipment is the mining equipment used in the underground. Underground mining is a technique used to access ores and valuable minerals in the ground by digging into the ground to extract them.The global Underground Mining Equipment market size is projected to reach US$ 36250 million by 2028, from US$ 22750 million in 2021, at a CAGR of 6.8% during 2022-2028. Global Underground Mining Equipment key players include Caterpillar, Komatsu (Joy Global), Volvo, Hitachi Construction Machinery, Sandvik, etc.
North America is the largest market, with a share about 30%, followed by Europe, having a share about 25 percent.In terms of product, Longwall is the largest segment, with a share about 75%. And in terms of application, the largest application is Coal Mining, followed by Metal Mining, Mineral Mining.
By October, however, US coal shipments will need to grow much higher than they already are so that enough fuel will be available before winter sets in U.S. refined coal production and consumption declines with the expiration of a tax credit Refined coal production in the United States dropped to nearly zero during the first quarter of 2022 as refined coal consumers used their remaining small stockpiles. Refined coal is most commonly made by mixing proprietary additives to feedstock coal. At the end of 2021, the refined coal production tax credit (created by the American Jobs Creation Act of 2004) expired, which could be affecting refined coal production and consumption. Additives are used in refined coal to help capture emissions when the coal is burned. For example, these additives increase mercury oxides, which technologies—such as flue gas desulfurization scrubbers and particulate matter control systems—can then capture. Without these additives, ash would not capture much of the elemental mercury in coal, which would instead be released into the environment. The production tax credit helped coal-fired electric power plants reduce these emissions. Refined coal production facilities could claim the tax credit for up to 10 years, but they had to meet certain conditions US Coal Prices Are Breaking Records, But Production Is Dropping
MONTHLY SUMMARY OF IMPORTED COAL & PETCOKE Indicative Imported Coal Price COAL (kcal/kg) Weekly Price - FOB Weekly Price - FOB Weekly Price (USD) South Africa 6000 NAR USD 328.00 INR 26056 -0.40 South Africa 5500 NAR USD 256.09 INR 20344 -5.14 Australia 5500 NAR USD 197.35 INR 15678 6.59 Indonesia 5000 GAR USD 127.91 INR 10161 -8.74 Indonesia 4200 GAR USD 83.27 INR 6615 -2.53 Indicative Pet Coke Price PET COKE Sulphur Price ChangeWeekly($) Exchange Rate Change (Weekly) India-RIL(Ex-Ref.) -5% INR 20144 (INR) -1863 INR 79.44 1.41Saudi Arabia (CIF) + 8.5% INR($206.00)16365 -20 USA (CIF) - 6.5% INR 16802 ($212.00) -31 Indicative Coking Coal Price CurrentWeek Premium Low Vol Low Vol HCC Semi Soft Low Vol PCI Mid Tier PCI MET COKE 62% CSR FOB Aus CFR China FOB Aus CFR China FOB Aus FOB Aus FOB Aus CFR India FOB N China 235.13 351.88 203.63 311.88 179.88 223.63 221.63 490.25 454.00 ChangeWeekly(USD) -138.48 -65.23 -134.88 -64.43 -120.78 -134.78 -134.78 -86.75 -83.20
Indonesian Coal News:
*The Indonesia Coal Mining Association, or ICMA, has proposed to the government in the line of decreasing the influence of Australian coal prices in the calculation of Indonesia's HBA Index, a move they believe will reflect the country's coal prices more accurately. The HBA price for thermal coal is the basis for determining prices of 77 Indonesian coal products and calculating the amount of royalty producers must pay for each metric ton of coal sold. Coal producers in the country have welcomed the idea to review the HBA formulation as Australian prices do not represent Indonesia anymore and the weightage should be reduced.
*Global seaborne thermal coal supply could grow by more than 2% in July as a sharp rise in Indonesian loadings offsets lower Australian and Russian volumes. Indonesia, the world’s largest thermal coal exporter, would likely ship 30% more coal in the year, amounting to 43.1mn tonnes, the data showed. Indonesia is an important source of coal for Asian giants such as India and China while Japan, which has poor resources, is also depending firmly on Indonesian high and mid-CV thermal coal.
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*South Africa, who ranks first in coal resources in Africa, has found a solid new destination for its dry fuel this year amid the geopolitical conflicts in Europe. In the first five months of this year, European countries imported more than 3.24 million tons of coal from South Africa, 40 percent more than in all of 2021. However, the country is facing challenges in coal transportation amid surging demand from Europe. At present, the country’s relatively limited rail and road capacity makes it difficult to quickly transport large amounts of coal from mines to ports.
* Mining shares with thermal coal assets in South Africa such as Thungela, Exxaro have been tipped to show the best cash returns when the sector’s half-year reporting season completes in less than a month’s time. Exxaro Resources, one of South Africa’s largest thermal coal exporters, said the average coal price for the first six months of the year was $270 per ton, nearly twice the average price during the comparative period in 2021. Another miner Goldman Sachs says the fuel will attain an average $208/t for the year with a softening likely from about the third quarter.
*China is planning to lift its informal ban on Australian thermal coal as Chinese Ministers believe that bilateral trade between both countries have huge potential. These restrictions on Australian goods are unnecessary and they should all be lifted. The removal of all sanctions imposed on Australia is in the best interest of both China and Australia, Australian Prime Minister Anthony Albanese has said. In October 2020, China was the first to stop allowing Australian coal imports. The trade was valued at US$382 million in September of that year, but had dropped to zero by early 2021 when several shipping vessels were abandoned off the coast of China.
Australian Coal News:
European Coal News:
*European buyers have had to temporarily set aside green aspirations in a rush for coal as the region’s energy crisis deepens, ramping up shipments from Australia, South America, Colombia and South Africa while tightening the global market. Analysts say imports of thermal coal from the 27 member EU bloc plus the UK will be 43% higher by next year versus this year. European countries imported 7.9 million tonnes of thermal coal in June, more than doubling year-onyear, although nearly 2 million tonnes lower than in April and May.
*The European Union is now the fifth largest seaborne importer of coal in the world, after India, China, Japan and South Korea. In 1H 2022, the EU accounted for 10.4% of global seaborne coal shipments. The EU’s seaborne coal imports in the 12 months of 2021 increased by +30.3% y-o-y to 87.1 mln tonnes. This was mostly a rebound from a massive -32.9% y-o-y decline in 2020 caused by Covid lockdowns. In the first 6 months of 2022, coal imports into the EU further increased by +49.6% y-o-y to 57.6 mln tonnes.
*Plans in Europe to place a small number of coal plants on temporary standby would add 1.3 per cent to EU emissions annually, even in the worstcase scenario where they run at the highest levels, energy think tank Ember said. Germany, Austria, France and the Netherlands have recently announced plans to enable increased coal power generation in the event that Russian gas supplies suddenly stop. The analysis finds that 14 GW of coal-fired plants have been placed on standby, adding 1.5 per cent to the EU's total installed power generation capacity. Majority of this is in Germany.
*Australia's mining and energy export revenues are forecast to climb 3% to a record A$419 billion ($286 billion) in the year to June 2023, buoyed by surging coal and gas prices in the wake of Russia's invasion of Ukraine. This financial year Australia’s coal exports are tipped to hit $100 billion for the first time. Coal may even overtake iron ore exports to make coal Australia’s biggest export again. Current sanctions on Russia by the EU have sent prices for liquefied natural gas (LNG) and coal to all-time highs, underpinning record revenue for Australia's second and third largest exports.
South African Coal News:
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*India’s draft national coal logistics plan announced recently, emphasises on developing the country’s coastal shipping network, particularly along the south and west coasts, to lower freight costs and delivery time of the key commodity, the mainstay of India’s power generation. Rail-sea-rail options for south and west coast coal traffic must be taken up to decrease the total landed cost of coal supply to those regions. Investments in port capacity and last leg railway lines are envisaged, the plan suggested.
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*China imported 1.33 million mt of petroleum coke in June, a month-on-month decrease of 14.94% and year-on-year drop of 9.37%. The imports totaled 6.84 million mt in the first six months in 22, up 4.28% YoY. By specification, the imports of non-calcined petroleum coke stood at 306,400 mt, an increase of 84,300 mt compared with May. The imports of other non-calcined petroleum coke stood at 1.03 million mt, a drop of 318,400 mt MoM.
US Coal News:
*The US coal mine production is expected to remain flat over the forecast period (2022–26), at a compound annual growth rate (CAGR) of 0.1%, to reach 545Mt in 2026. Coal output will be affected by the gradual closure of mines such as Buckskin, San Juan, Kemmerer, Coal Creek, Black Butte and Leucite Hills, Trapper, Absaloka and the Cadiz Mining Complex, which produced a combined 20.5Mt of coal in 2021. Further, according to the EIA, about 12.6GW, or 6% of the coal-fired generating capacity that was operational in 2021 is scheduled to retire in 2022.
*The reshaping of global dry bulk trade flows by the Russia-Ukraine conflict, which was expected to boost shipping demand, could face headwinds in the third quarter on the back of a deteriorating global economic climate caused by surging commodity prices, interest rates and inflation. The aggressive monetary policies including interest rate hikes being pursued by various central banks is weighing on global commodity demand and freight rates in the near term, according to dry bulk shipping sources.
Shipping Update: *Coal imports of up to 40 million tons, coming into the EU from Russia, need to be replaced from other sources. This could present a significant opportunity for the dry bulk market. The US accounts for the largest exporter of thermal coal to Europe at the moment, with exports surging to 11.2mn tonnes during the first half of 2022, noting a 91.6% y-o-y increase. Amid intensified sanctions, the US Government is exerting pressure on miners to increase production, therefore, trade flows from US to EU ports (mainly Netherlands and Germany) are expected to increase within 2nd half of this year.
*US coal producers were able to ramp up exports in 2021 to meet the demand both inside and outside the country but experts say they might struggle to meet the 2021 levels because of all of the nationwide rail logistics issues and it might take them until 2023 to get back to similar levels as 2021. Coal production is up from last year, but dramatically higher prices are not translating to a similar increase in supply. But most of that growth was in Western states. West Virginia coal production was up 3.6 percent in the first three months of the year, while Appalachian coal production was down 1.2 percent.
Pet Coke News:
*According to the report published by Allied Market Research, the global petroleum coke market generated $38.4 billion in 2020, and is estimated to generate $75.3 billion by 2030, witnessing a CAGR of 6.9% from 2021 to 2030. Rise in the usage of adhesives, increase in the global supply of heavy oils, development in cement and power generation industry, and surge in applications of petroleum coke drive the growth of the global petroleum coke market. However, government regulations on the manufacturing and usage of petroleum coke hinder the market growth.
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GLOBAL MINETEC LIMITED starts off its logistics from moving the quality coal from mine stock. The coal is loaded and transported through tippers a nd subsequently loaded to wagons to be carried to the respective thermal power plants. GLOBAL MINETEC LIMITED is a brand that believes in strengthening its innate competence and growing better each passing day. With numerous new ideas out of its pandora box GLOBAL MINETEC LIMITED strives at becoming a giant business conglomerate. With strong core values and impeccable services GLOBAL MINETEC LIMITED is the name you can count on. Contact details: Mail ID: gmtltalcher2018@gmail.com Mobile No: 9133537132,7972717847
Start with quality, destination will be excellence
GLOBAL MINETEC LIMITED, thy name stands for trust in supplying the qualitative coal from different coal mines of Mahanadi Coalfields Limited. With its inception in Talcher, Odisha, this company redefines the power of experience and knowledge. We take pride in the inclusive understanding of our work, its operations and incorporation of ultra new methodology to cope up with the quick paced market. GLOBAL MINETEC LIMITED constantly endeavour to expand globally given its success rate. GLOBAL MINETEC LIMITED also has extensive experience in tendered work contracts and has provided years of unadulterated dedicated services. It has undertaken numerous contracts on providing coal of good quality and has performed flawlessly each time as endorsed by Coal India Limited. GLOBAL MINETEC LIMITED has gained both momentum and trust in the market over the period by successfully completing the contracted works with properly maintaining the quality as per timelines. We provide at supplying quality coal, being environmentally responsive and comm unity friendly attracts our customers and retains them. We understand ardently the need to be extremely aware and responsible corporate citizens GLOBAL MINETEC LIMITED also takes strict measures when it comes to safety of its employees, machineries and tools and ensures that all government safety parameters are adhered to, and no deviation of any kind is tolerated.
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No.Sl. Subsidiary Production during July Production up to Jul'22 FY-23 FY-22 Growth(%)FY-22-23 FY-23 FY-22 Growth(%)FY-22-23 1 ECL 2.52 2.16 16.67 11.01 10.08 9.23 2 BCCL 2.92 2.19 33.33 10.79 8.01 34.71 3 CCL 5.56 4.13 34.62 21.25 17.00 25.00 4 NCL 10.95 9.01 21.53 43.29 34.76 24.54 5 WCL 1.65 2.73 -39.56 15.92 13.14 21.16 6 SECL 9.13 9.97 -8.43 44.83 37.66 19.04 7 MCL 14.58 12.40 17.58 59.94 45.91 30.56 8 NEC 0.02 0.00 0.06 0.00 Overall CIL 47.33 42.59 11.12 207.09 166.56 24.33 9 SCCL 3.29 4.87 -32.51 20.20 20.44 -1.15 10 Captive/Others 9.80 6.79 44.37 38.42 23.10 66.35 Grand Total 60.42 54.25 11.37 265.71 210.10 26.47 No.Sl. Subsidiary Despatch during July Despatch up to Jul'22 FY-23 FY-22 Growth(%)FY-22-23 FY-23 FY-22 Growth(%)FY-22-23 1 ECL 2.86 2.63 8.75 11.81 13.63 -13.35 2 BCCL 3.00 2.62 14.50 11.85 10.26 15.50 3 CCL 6.35 4.83 31.47 26.37 23.61 11.69 4 NCL 11.71 9.99 17.22 45.95 38.39 19.69 5 WCL 2.55 4.04 -36.88 20.58 20.27 1.53 6 SECL 11.75 12.55 -6.37 51.16 51.47 -0.60 7 MCL 16.29 13.74 18.56 64.31 53.22 20.84 8 NEC 0.02 0.00 0.05 0.00 Overall CIL 54.54 50.42 8.17 232.07 210.86 10.06 9 SCCL 3.36 5.03 -33.25 20.66 21.72 -4.87 10 Captive/Others 9.91 7.04 40.78 39.50 25.11 57.29 Grand Total 67.81 62.49 8.51 292.23 257.69 13.40 COALCOALPRODUCTIONDESPATCH 32 | CCAI Monthly Newsletter July 2022
Coal Production (in MT) Company 2022JUL’ 2021JUL’ % Growth Apr-Mar2023 Apr-Mar2022 % Growth CIL 47.33 42.59 11.12 207.09 166.56 24.33 SCCL 3.29 4.87 -32.51 20.20 20.44 -1.15 Overall Offtake (in MT) Company 2022JUL’ 2021JUL’ % Growth Apr-Mar2023 Apr-Mar2022 % Growth CIL 54.54 50.42 8.17 232.07 210.86 10.06 SCCL 3.36 5.03 -33.25 20.66 21.72 -4.87 Coal Despatch to Power (Coal and Coal Products) (in MT) Company 2022JUL’ 2021JUL’ % Growth Apr-Mar2023 Apr-Mar2022 % Growth CIL 47.02 39.11 20.23 199.49 165.26 20.72 SCCL 2.82 4.22 -33.19 17.24 18.08 -4.64 OVERALL DOMESTIC COAL SCENARIO 34 | CCAI Monthly Newsletter July 2022
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