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Tuesday, 19 October 21
COAL INDIA, THE FALL GUY FOR POWER CRISIS - INDIA EXPRESS
The post-Covid economic recovery has led to a major increase in the demand for power, both in India and globally. In India, coal-based power plants have witnessed rapid depletion of coal stocks from a comfortable 28 days at the end of March to a precarious level of four days by the end of September. The country is struggling to understand how the crisis is likely to pan out in the near future. Coal India Ltd (CIL) has been unfairly attacked, even as it gears up to play a crucial role in fighting the power crisis.
The reasons for the crisis are not hard to find. These are structural as well as operational. A government-appointed committee in the early 1990s concluded that CIL “cannot be expected to meet the demand of the power sector, in case the pace of capacity addition accelerates.” This led to an amendment in the Coal Mines Nationalisation Act (CMNA) in 1993 that enabled the government to take away 200 coal blocks of 28 billion tons from CIL and allocate them to end-users for the captive mining of coal. These end-users, mostly in the private sector, failed to produce any significant quantity of coal to meet the rapidly rising power capacity between 2007 and 2016. The cancellation of 214 blocks by the Supreme Court added to the problem.
Commensurate to the captive mines allocated to the end-user industries, the coal production today should have been at least 500 million tonnes per annum (mtpa). In reality, this has never exceeded 60 mtpa. CIL, with denuded reserves, is called to meet the rising gap in coal supplies. These structural factors fuelled not just over-expectations from CIL, they also kept the company in a constant state of stress.
On the operational side, power plants are required by the Central Electricity Authority (CEA) to maintain a minimum stock of 15 to 30 days of normative coal consumption, depending upon the distance of the plant from the source of coal. The compliance with this directive by power plants has been severely lacking. This enhances the vulnerability of power plants, particularly those at longer distances, to supply constraints on account of the coal producer or transporter.
The persistent non-payment of coal sale dues by power plants to coal companies has created a serious strain on their working capital position. Some companies were forced to borrow from banks to meet the operational expenses, including disbursement of salaries. According to reports, Rs 18,000 crore is currently due to coal producers.
The persistent shortage of coal production by the privatised and captive mines forced India to import around 200 million tonnes (mt) of coal. Of this, more than 40 per cent goes to meet the demands of power plants. A spurt in imported coal prices, mainly due to a major increase in coal imports by China, acted as a brake on imports of coal. This escalated the demand for domestic coal.
Simultaneously, from August, the demand for thermal power witnessed a sudden rise after stagnating for over three years. The spurt in demand for coal is being linked to the post-Covid economic recovery. In the short run, the coal production by CIL has faced severe headwinds in the first quarter due to the second wave of the pandemic. Thousands of workers and officers were infected and hospitalised and more than 250 CIL employees lost their lives. In the second quarter, the extended monsoon severely affected open-cast mining. These added to supply disruptions and aggravated the crisis.
Despite so many constraining factors, it is to the credit of CIL that it has achieved a growth of 14 million tonnes (mt) or 5.8 per cent in coal production during the first half of 2021-22. Yet, the offtake was higher than the preceding year by 52 mt or 20.6 per cent. This was possible by drawing down on the opening inventory of coal from 100 mt to 42 mt during April to September.
With the monsoons behind us and the onset of a good productive season, CIL has already stepped up coal offtake to more than 1.5 mt per day. It is expected to rise further to 1.6/1.7 mt in the next few weeks. With these efforts, supply will match, if not exceed consumption. With efforts on the part of the railways in moving the coal, the crisis should dissipate in the near future, at least for power plants that pay timely for coal supplies. Obviously, it will take a few months for coal stock at power plants to climb to comfortable levels in line with the CEA’s norms.
Besides meeting the growing coal demand of power plants, CIL has been able to significantly replace the import of highly expensive thermal coal. Even after bearing the highest tax and transport cost globally, the landed cost of CIL coal continues to be much cheaper than imported coal at almost all destinations. The resultant benefits are savings of foreign exchange, and generation of power at affordable tariffs. The coal price charged by CIL, expressed in energy units, is at a deep discount of 60-70 per cent of imported coal.
In brief, CIL has been unfairly blamed for the coal crisis. It has played a stellar role, standing like a solid rock between light and darkness. It is striving to build comfortable stocks at the power plants, not in default of payment. The company has ramped up coal production despite the 1990s policy that took away coal blocks of 28 billion tonnes of reserves. It is time that the country recognises the critical role of CIL. It needs bouquets rather than brickbats.
Source: The India Express
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Wednesday, 02 February 22
COAL STORAGE IN CHINA’S POWER PLANTS NEAR RECORD HIGHS - XINHUA
Coal inflows into China’s power plants have picked up, bringing their coal storage to near record highs, the National Development and Reform ...
Wednesday, 02 February 22
MARKET INSIGHT - INTERMODAL
Oil prices have rallied to the highest level since October 2014 breaking above $90/bbl recently. November 2014 was the point when OPEC unleashed pr ...
Monday, 31 January 22
HOW INDONESIA'S COAL EXPORT BAN COULD IMPACT INDIA - IEEFA
What does it mean for power generation and energy security?
Not long ago, India faced coal shortages due to a decline in domestic co ...
Sunday, 30 January 22
AIR PRODUCTS' COAL GASIFICATION PROPOSAL TRIGGERS LOOMING POLICY DISPUTES IN INDONESIA - IEEFA
Plan to substitute Indonesia’s LPG imports with dimethyl ether may be hard to realize due to conflicting business interests
In ...
Sunday, 30 January 22
ENDGAME FOR NEW COAL POWER PROJECTS? - IEEFA INDIA
Retired coal units must be replaced only by assets that can provide grid flexibility
Reportedly, an expert committee appointed by th ...
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Showing 361 to 365 news of total 6871 |
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- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- The University of Queensland
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Australian Coal Association
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