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Wednesday, 20 October 21
OVER-RELIANCE ON COAL IN OUR POWER MIX HURTING INDIA - LIVEMINT
In spite of the renewables push, coal still accounts for about 50% of India’s installed power capacity. That means a simultaneous demand and supply shock, as happening now, can disrupt power generation.
The current shortage of coal is raising the spectre of long power outages. At a broader level, the crisis also underscores India’s overwhelming dependence on coal to meet its energy needs, the significant push towards renewables notwithstanding. As of September 2021, thermal power— power generated from burning coal, gas and petroleum—comprised 60% of India’s installed capacity in power generation. Coal alone accounted for nearly 50%. By comparison, renewable sources such as wind and solar energy and biomass accounted for 26%.
European countries lead the way in renewable sources, which are more sustainable and environment-friendly. Germany, for example, drew 44% of its electricity from renewables in the first half of 2021. For India, that figure was just 10% in 2019-20, against the installed capacity share of 26%. While installed capacity represents the maximum amount of electricity that can be generated, the actual amount generated from renewables is lower due to their erratic nature. For instance, lack of sufficient wind on a given day would lead to lower energy produced from wind turbines.
While India is expected to tide over the current coal shortage, the only way it can secure its longer-term energy security is by ramping up production from renewables. However, in the medium term, it is also imperative to upgrade infrastructure at coal mining facilities, and open up existing mines to the private sector for mining to augment the supply of coal. Failure to do so will leave it vulnerable to imbalances in supply—and have deleterious trickle-down effects, as being seen now.
Supply Crunch
Coal production has picked up in the current financial year and exceeds pre-pandemic levels. In the six-month period from April to September 2021, India produced 315 million tonnes of coal, a 5.5% increase over the corresponding period of 2019 (pre-pandemic). However, there has been a secular stagnation in coal production since 2017, with the rise in production not keeping pace with increasing demand.
State-owned Coal India dominates coal production in the country, accounting for about 85% of the coal produced in the first six months of 2021-22. In addition to domestic production, India imports nearly 25% of its coal requirement. Coal imports too had fallen sharply in 2020-21, due to supply shortages and the ensuing increase in global coal prices. In a move that will enhance imports, the Centre has ordered thermal power producers to import coal for at least 10% blending in their fuel, citing a shortage of domestic supply.
Production Woes
There is, currently, a crippling shortage of coal at thermal power plants. At an all-India level, the normative stock of coal required across all power plants is 39.7 million tonnes. However, the coal stock available on 15 October with these plants stood at 7.5 million tonnes, or about 19% of the stock required, according to the Central Electricity Authority. That same day, as many as 104 of the 135 coal-based plants in India had less than five days’ stock of coal remaining, which is deemed to be ‘critical’ for plants that are located near a coal mine.
The shortage is stark across states in all regions. The northern region, which is distant from most coal-producing regions, is the worst-affected, with around 91% of thermal plants facing shortages. By comparison, the western region, which includes mineral-rich Chhattisgarh, is slightly better off, with the coal shortage affecting around 74% of power plants there.
Price Spikes
The current concern regarding coal supplies has led to a spike in electricity costs. The supply arrangement in India is that distribution companies, mostly state-owned, enter into direct purchase agreements with power producers. In the event that producers are unable to fulfil their commitments, or demand exceeds contracted supply, distribution companies buy from sellers in the open market.
Data from the Indian Energy Exchange (IEX), a marketplace for short-term electricity trading in India, shows that electricity prices rose nearly five-fold over the past month in reaction to news regarding the impending shortage of coal. Considering that end prices paid by consumers remained fixed, distribution companies, which are already in a precarious financial position, were forced to bear the brunt of this higher price. Although rates have slid back to normal levels again, this upheaval is a grim reminder of the centrality of coal in India’s power mix and why this needs to change.
Source: Livemint
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Wednesday, 28 July 21
MARKET INSIGHT - INTERMODAL
Assessing the ship repair sector during this first half of the year, we continue to come across surprises and new restrictions which are trembling ...
Saturday, 24 July 21
UNDERSTANDING INDIA'S LATEST PEAK POWER DEMAND RECORD - IEEFA
Ramping up solar will be crucial as peak power demand hits during the day
At around noon on 7 July 2021, India’s instantaneous ...
Wednesday, 21 July 21
MARKET INSIGHT - INTERMODAL
Dry Buk Sales and Purchase activity has heated up during 2021, reaching record high levels during the first half of the year. The increased interes ...
Monday, 19 July 21
CHINA'S COAL OUTPUT UP 6.4 PCT IN H1 - XINHUA
China’s raw coal output climbed 6.4 percent year on year to 1.95 billion tonnes in the first six months of the year, official data showed.
...
Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
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- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
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- LBH Netherlands Bv - Netherlands
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- Minerals Council of Australia
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- Directorate General of MIneral and Coal - Indonesia
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- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Marubeni Corporation - India
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- Power Finance Corporation Ltd., India
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- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
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- The State Trading Corporation of India Ltd
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- Meenaskhi Energy Private Limited - India
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- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
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- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
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- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
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- Tata Chemicals Ltd - India
- Planning Commission, India
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
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- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
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- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
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- Bulk Trading Sa - Switzerland
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- Bangladesh Power Developement Board
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- Georgia Ports Authority, United States
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- Toyota Tsusho Corporation, Japan
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- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Thai Mozambique Logistica
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- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
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- SMC Global Power, Philippines
- Central Electricity Authority - India
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- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
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- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
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