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Thursday, 10 May 18
PRIVATE POWER PRODUCERS NEED A 'POWERFUL PUSH' - PRADEEP MITTAL
 - PLF of the Private Sector in the country (Coal and Lignite based) for FY 2017-18 (till Dec 2017) is 56%.
- 51 GW of stressed assets (Thermal & gas) and around 23 GW of capacity under construction projects are likely to be stressed due to non-availability of Coal and lack of PPA’s.
- Of total 495 MT of coal supplied by CIL and its Subsidiary, Private sector received around 133 MT of coal for FY 2017-18 (Till Feb 2018).
- Post-GST private power producers witnessed an increase of nearly Rs 135/tonne on Imported Coal.
- Private players have to bear an increase of 12-15 paisa/Kwh post GST implementation in July 2017 and revised coal price notification by CIL (domestic coal) in Jan 2018.
- Non-availability of Long term fuel security (coal linkage or coal blocks), adequate long term PPA tenders by Discoms continues to hamper private power producers.
- Additional Capex requirement for meeting the revised environmental norms issued by MoEF
India is a power surplus country, really? Isn’t it an illusion? The poor health of State discoms compels them to buy less electricity. And ofcourse, load-shedding continues to torment the discoms. Nearly, 300 million people are expected to get electricity under the government’s ambitious
`Power for All’ initiative. Inadequate infrastructure for power transmission is believed to be the primary reason for the aforementioned number is deprived of electricity. The tag of Power Surplus Country — is it something really to cherish?
Imbalanced coal supply: Public Vs private power producers
Insufficient coal supply to thermal power plants is taking a huge toll on electricity generation. According to Coal Ministry data, of total 495 million tonne (MT), Coal India Ltd (CIL) has supplied 362 MT (accounting for 73%) to public sector thermal power plants from April 2017 to February 2018. On the other hand, private thermal power plants received 133 MT during these ten months, which accounts for 27% of total coal supplied to IPP’s. The supply of thermal grade coal (G11 to G12) is likely to remain in the same proportion in coming years. Moreover, the recent coal price hike will translate to 12-15 paisa/kWh and is a major setback to the IPP’s as most of the Case-1 competitive bidding PPAs do not allow pass through of increase in coal price to producers, whereas for public power plants the PPA’s are signed under Section-62 which allows the pass through of increased coal cost. As the IPP’s are already hit by increasing operating costs, private power producers badly need optimum coal supply with a slash in current coal prices. Further, Inadequate coal supply forces the private power plants to opt for imported coal where the current duty structure puts them on a receiving end.
Duty structure for Imported Thermal coal -a dampener
In the wake of the insufficient coal availability, imported thermal coal remains the only way out to meet the rising fuel demand for power generation. However, the duty structure for thermal coal only adds to increase in imported thermal coal prices. Pre-GST private power producers were paying Rs 515/tones on an assessable value of Rs 5000/tone, which includes CVD of 2% of assessable value; a green energy cess of Rs 400/tonne, and education cess of 3% on total duty component. Post-GST, power producers have to pay IGST of 5% of assessable value and GST compensation cess to the tune of Rs 400 /tonne, which makes the total payment to Rs. 650/tonne. us, power producers face an increase of Rs.135/tonne which is translated to approximately 9 paisa/ kWh. is additional amount is claimed under Change of Law, but regulatory delays force power producers to bear the brunt of duty structure.
In the case of thermal coal imported from other countries like South Africa, Australia, Columbia, etc. only basic duty has been abolished from 2.5% in pre-GST era, while other components such as CVD, green energy cess and education cess are combined under IGST of 5% of total assessable value. us, private power producers have to pay extra Rs. 131/tones on thermal coal imported from abovementioned countries, which is translated to —9 paisa/kWh.
It is also pertinent to note that the green cess has increased to Rs. 400/tonne from Rs. 50/tonne over the years. Unfortunately, power tariffs have not come across the same trend.
Coal price hike adding to private power producers’ woes
The private power plant operators are already facing acute problem of coal supply and an increase of nearly 11% in thermal grade coal (G-11) has further marred the operating cost. Between May-2016 and January-2018, price of G-11 grade thermal coal has gone up by 11% to Rs 1,849/tones, which is likely to translate to 12-15 paisa/kWh in power cost.
The nature of signed PPAs under competitive bidding with state discoms does not allow the private power producers to claim any change in coal prices by CIL under Change in Law. And eventually, power generators have to bear the extra burden. On the contrary, power PSUs have a cost plus PPA with discoms and they enjoy the benefit of passing on the impact of coal price hike to discoms and thereafter to consumers.
Sluggish coal supply and absence of linkages likely to lead to more NPAs
According to estimates, NPAs in the power sector is anticipated to be around Rs. 4 lakh crore. Due to non-availability of coal and linkages many power plants were forced to shut and turned into stressed assets. Further, the lenders have also stopped funding which were already taken at higher interest rates. Government’s initiatives for providing adequate coal and long term fuel linkages have not fetched positive results which led the private power producers surrendering prices. e government aims to add 47 GW of coal-fired capacity by 2022. However, at this juncture, no private power producer will come up with fresh investment unless and until the current issues are resolved. If the private power producers receive a substantial capital push along with revised framework for coal supply and coal linkages, at least unfinished power projects can see the light of day.
Article by Mr. Pradeep Mittal Executive Vice Chairman, Essar Power Ltd.
Source : Electrical & Power Info, April-May 2018
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Tuesday, 01 May 18
GLOBAL MINER PEABODY EYES SALES OPPORTUNITY IN INDIA’S RISING COAL IMPORTS - BUSINESS STANDARD
Indian imports of coal will continue to rise, reckons the world’s largest private sector coal miner Peabody Energy. Glenn Kellow, president a ...
Saturday, 28 April 18
STRONG ASIAN DEMAND CONTINUES TO HOLD UP THERMAL COAL MARKETS - REUTERS
Asian thermal coal demand is defying its typical seasonal slowdown as well as the expanding use of renewables and natural gas, with prices holding ...
Friday, 27 April 18
PEABODY ENERGY'S REVENUES FOR THE FIRST QUARTER ROSE 10 PERCENT OVER THE PRIOR YEAR TO $1.46 BILLION
Peabody Energy's revenues for the first quarter rose 10 percent over the prior year to $1.46 billion driven by improved seaborne coal pricing a ...
Thursday, 26 April 18
BALTIC EXCHANGE LAUNCHES ESCROW SERVICE FOR VESSEL SALES
The Baltic Exchange will be launching an Escrow Service for its members to hold deposits for ship sale transactions. The move will allow Baltic Exc ...
Thursday, 26 April 18
COAL PRICES ARE EXPECTED TO AVERAGE $85/MT IN 2018, DOWN SLIGHTLY FROM 2017 - WORLD BANK
Coal prices rose 4 percent in the first quarter (q/q), following a surge of 34 percent in 2017, mainly due to strong consumption in China spurred b ...
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- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Electricity Authority, New Zealand
- PTC India Limited - India
- Indonesian Coal Mining Association
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Mercator Lines Limited - India
- The Treasury - Australian Government
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
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