© LANCO Group, All Rights Reserved POWEREPC INFRASTRUCTURE SOLAR RESOURCES Fuel Supply Issues: An overview.

© LANCO Group, All Rights Reserved© LANCO Group, All Rights Reserved

POWEREPC INFRASTRUCTURESOLAR RESOURCES

Fuel Supply Issues: An overview

© LANCO Group, All Rights Reserved

– Significance of Coal as Primary Energy Source

– Demand Supply Scenario of Coal

– Policy Snapshots

– Way Forward

Contents


As on March 2010

Coal the main stay of energy


Source : BP Energy statistics 2010

* Conservative estimate

Proved Reserve of Oil-Gas-Coal Position of INDIA as against WORLD


India having just 0.4% of world’s known oil and 0.6% of natural gas resources but coal reserves is about 7%.

At the present production rate oil and gas is to last for about 22 and 28 years respectively .

India currently mines about 540 mn tones of coal per year and looks forward an ambitious target of reaching 1 bn tone mark by 2020 if the demand has to be met.

The Government of India estimates India has total coal reserves of close to 100 bn tonnes, with total resources exceeding 250 bn

Coal-remains as the main stay of energy in India


However, conservative estimates for - recoverable coal reserves for India are about 60 bn tones

At the present rate of production – proven coal reserve to sustain over 100 years in India

India is the 3rd largest coal producing country after China and USA.

Coal will continue to play a pivotal role in Indian Energy Scenario for the foreseeable future.

Coal-remains as the main stay of energy in India (Cont..)


Sl. No.

Coalfield Company

1. SINGRAULI NCL

2.KARANPURA & BOKARO

CCL

3. JHARIA BCCL

4. ASSAM & MEGHALAYA NEC

5. RANIGANJ ECL

6. IB & TALCHER MCL

7. CENTRAL INDIA SECL

8. PENCH & KANHAN WCL

9. CHANDA & WARDHA WCL

10. GODAVARI VELLEY SCCL

11. LIGNITE NLC

12.LIGNITE, GUJRAT & RAJASTHAN

THE MAJOR COALFIELDS OF INDIA


COAL RESERVES IN INDIA STATE-WISE

A.P. 7%Chhattisgarh

44 Bill T (16%)

Jharkhand 77 Billion T (29%)

M.P. 21 Bill T (8%)

Orissa 65 Bill T (24%)

West Bengal 28 Bill T (11%)

Others 5%

Coal Reserves in India - state-wise (Billion Tons)

Andhra PradheshChattisgarhJharkhandMadhya PradheshOrissaWest BengalOthers


State Geological Resources of Coal

Proved Indicated

Inferred Total

Andhra Pradesh 9194 6748 2985 18927

Arunachal Pradesh

31 40 19 90

Assam 348 36 3 387

Bihar 0 0 160 160

Chhattisgarh 10910 29192 4381 44483

Jharkhand 39480 30894 6338 76712

Madhya Pradesh 8041 10295 2645 20981

Maharashtra 5255 2907 1992 10154

Meghalaya 89 17 471 577

Nagaland 9 0 13 22

Orissa 19944 31484 13799 65227

Sikkim 0 58 43 101

Uttar Pradesh 866 196 0 1062

West Bengal 11653 11603 5071 28327

Total 105820 123470 37920 267210

Type of Coal Proved Indicated

Inferred

Total

(A) Coking :-

-Prime Coking 4614 699 0 5313

-Medium Coking 12449 12064 1880 26393

-Semi-Coking 482 1003 222 1707

Sub-Total Coking 17545 13766 2102 33413

(B) Non-Coking:- 87798 109614 35312 232724

(C) Tertiary Coal 477 90 506 1073

Grand Total 105820 123470 37920 267210

Note: All Quantities in Million Tonnes Above details are as on 1st April 2010

CLASSIFICATION OF COAL RESERVES


FUEL WISE BREAKUP OF POWER GENERATION CAPACITY(as on 30-Nov-2011)

FUEL MW PERCENTAGE

Total Thermal 121805 65.7%

Coal 102863 55.5%

Gas 17743 9.6%

Oil 1200 0.6%

Hydro 38749 20.9%

Nuclear 4780 2.6%

Renewable 20162 10.9%

TOTAL 185496 100%


– Significance of Coal & Primary Energy availability

– Demand Supply Scenario of Coal


– Way Forward

Contents


TARGET CAPACITY ADDITONS: 11TH – 13TH PLANS

11th Plan 12th Plan 13th Plan

62374

100347102000

44441

76613

64000

Capacity Additions: 11th - 13th Plans

Total target Coal based target

All values in MW

Additional Coal Requirement ~ 335 MT


SECTOR WISE COAL DEMAND

Sector Demand (in million tons)

2011-12 2016-17

Power (Utilities) 460 750

Power (Captive) 40 85

Cement 29 50

Sponge Iron and Others 120 135

Total Non-Coking Coal 649 1020

Coking Coal 47 105

Total 696 1125


DOMESTIC COAL SCENARIO

14

INDIAN COAL PRODUCTION - LAST 4 YEARS TARGETGROWTH

RATE OVER '10-’11 2007-08 2008-09 2009-10 2010-11 2011-12

CIL 379.46 403.73 431.27 431.32 460.5 7%

SCCL 40.6 44.54 50.43 51.33 47.05 -8%

OTHERS 30.48 38.98 50.35 49.42 65.87 33%

TOTAL 450.54 487.25 532.05 532.07 573.42 8%

Dispatch by CIL 401.46 415.96 423.77

Stock as at year end 45.6 47.73 63.04 63.54

Above figures are in Million Tonnes

No increase in production over previous year! Expansion fear for

Project developers.


INDIAN COAL: Production Vs Dispatch

15

COAL PRODUCTION IN 2010-11

PRODUCER (COAL CO.) 2009-10 2010-11 GROWTH RATE

ECL 30.058 30.81 3%

BCCL 27.512 29 5%

CCL 47.083 47.52 1%

NCL 67.67 66.25 -2%

WCL 45.735 43.65 -5%

SECL 108.009 112.71 4%

MCL 104.079 100.28 -4%

NECL 1.113 1.1 -1%

TOTAL CIL 431.259 431.32 0%SCCL 50.429 51.333 2%

CAPTIVE BLOCKS, OTHERS 50.354 49.417 -2%

ALL INDIA 532.04 532.07 0%

COAL DISPATCH IN 2010-11

PRODUCER (COAL CO.) 2009-10 2010-11 GROWTH RATE

ECL 28.83 32.6 13%

BCCL 24.86 28.76 16%

CCL 44.28 49.99 13%

NCL 66.67 72 8%

WCL 45.49 46.48 2%

SECL 105.87 111.98 6%

MCL 98.15 116.75 19%

NECL 1.07 1.25 17%

TOTAL CIL 415.22 459.81 11%SCCL 49.27 47.05 -5%

CAPTIVE BLOCKS 43.54 65.87 51%

ALL INDIA 508.03 572.73 13%

Almost no increase in production in coalfields nearest

to UP


FSAs & LoAs status30th Apr 2011

16

FSA Total No. of FSAs – 1599 for a Total Qty of 391 mT

17mT more FSAs to be signed for Power Utilities. Total would become 418mT.

LOA Total No. LoAs issued for 725 consumers for a total Qty of 551 mTpa

Of this, 598 Units having coal requirement of 484 mT submitted CG. 569 Units submitted completion of milestones for a quantity of 440 mTpa


• There is steadily growing gap between overall coal consumption as against the domestic production.

• While the production grew at 6.7% the consumption grew over 7.4% annually.

• It is evident that availability from domestic production is out paced by growing coal demand.

• Bridging such demand–supply gap will remain a major challenge for the coal sector.

• Import of coal, focus on indigenous coal production through technological innovation will be the focus areas for the future

Demand-Supply Gap


* Revised production target

Demand-Supply Gap


CHALLENGING ISSUES

19

Negative Coal Balance position to further widen with future capacity addition

Further recommendations by SLC (LT) withheld due to widening Gap in Demand Supply - 1500 applications seeking linkage of about 3000 Million MT of Coal pending at MoC.

Supply for New consumers under FSA limited to 50% of indigenous coal - No level playing field for new consumers.

Future consumers have no other avenue other than E-auction to procure coal which is limited to around 10% of production.


Alternative Sourcing of Coal

20

Source Issues Impact

‘e’ auction Coal Limited Availability Increase in Price due to demand supply mismatch

Imported Coal Equipment Design

Price

Logistics

Limited Blending

Higher Variable Charge

Quantity Restriction / Price Increase


Variable Cost with Different Fuel Mix

21

# based on current prices * As per Model FSA, trigger level is at 50%

Coal Type Energy Cost# Fuel Mix

Scenario IFuel Mix

Scenario II*Fuel Mix

Scenario III

[Rs /1000 K Cal] [%] [%] [%]Linkage Coal 0.42 40% 50% 60%e' auction coal / Open Market

1.37 35% 30% 25%

Imported Coal 1.57 25% 20% 15%

Weighted Avg Variable Cost (Rs/KWH) 2.66 2.39 2.12


COAL IMPORTS INTO INDIA : HISTORY

22

Total of Indo, SA& Aus

Non-Coking Coal Imports into India

Year IndonesiaSouth Africa Australia Total

2005-06 12.77 2.15 0.19 15.11

2006-07 14.95 1.75 0 16.7

2007-08 14.93 4.86 0.21 20

2008-09 22.06 5.77 0.62 28.45

2009-10 33.59 15.3 0.1 48.99

2010-11 43.2 20.3 0.07 63.57


COAL IMPORTS INTO INDIA (Port-wise)

23

PortsThermal Coal

FY 09-10 FY 10-11Kolkata, Haldia 335,642 1,336,281

Paradip 5,003,452 5,746,814Ennore 2,858,061 1,364,708Chennai 9,053,251 7,110,988Tuticorin 6,870,915 6,282,067

Mangalore 741,017 1,726,047Goa 857,195 397,738

Mumbai 3,461,598 4,945,804Vizag 2,111,411 4,345,111

Navlakhi 939,991 1,416,776Porbandar 665,000 1,380,000Bhavnagar 52,154 0

Pipavav 391,571 1,429,545Cochin 148,194 20,000Mundra 7,619,322 12,678,366

Bedi 0 0Kandla 2,039,872 2,854,906

Magdalla 1,304,379 1,116,149Dahej 0 70,500

Krishnapatnam 1,740,157 4,934,678Karaikal NA 1,080,260

Gangavaram NA 1,928,010Kakinada NA 1,315,668

Others 3,270,000 3,526,962

Total 49,463,182 65,745,415Growth 33%

To Power sector: 29mT

Though port capacities has increased phenomenally but Railway capacity has not increased to the required level


– Significance of Coal & Primary Energy availability

– Demand Supply Scenario of Coal sector


– Way Forward

Contents


New Coal Distribution Policy

As per New Coal Distribution Policy (NCDP), 100% of Normative Coal requirement of Power Utilities to be met by CIL (subsequently % was reduced to 90% for landlocked plants in SLC meeting dated 11th Nov ’08) even through Imports

Though NCDP doesn’t distinguish between old Vs new consumers; However, LoAs for new consumers being issued by CIL with the concept of Incremental Coal Availability

Policy Snapshots


As per prevailing practice, CIL indicates Total Coal Availability for Power

Sector for a given year to CEA

Out of this total indicated coal quantity 306 MT of coal is kept aside for power

projects commissioned as on 31st March ’09

Coal Quantity for new Power Projects commissioned after Mar ‘09 - Only

additional coal beyond 306 MT being distributed amongst new units by CEA

For FY 11-12, CIL has given 347 MT coal for Power Sector; after keeping aside

306 MT, the effective coal quantity available to Projects Commissioned after

Mar ‘09 ~ 41 MT

Linkage Coal Distribution

Policy Snapshots


Linkage Coal Distribution – Contd.

Coal Allocation by CEA for FY 11-12

(Million Tons)

Capacity (MW)

Remarks

TPPs commissioned during FY 09-10

16.6 5345 ACQ for these projects works out to be 23.95 MT

TPPs commissioned during FY 10-11

15.90 5355 ACQ for these projects works out to be 23.18 MT

TPPs commissioned /to be commissioned during FY 11-12

8.5 Expected Capacity Addition ~ 11000 MW

Total 41

(Incremental) Linkage Coal Distribution by CEA for FY 11-12:

Policy Snapshots

With this meager coal quantity available for distribution, TPPs have been allocated coal as low as 15% of the Linkage Quantity


• Coal will continue to remain as the dominant energy source for India for the foreseeable future.

• Domestic coal production requires to be augmented by technological up gradation speedy project clearance Effective R&R policy

• Coal Block allottees to gear up for taking an important role in meeting the demand

• If the entire coal committed by CIL to Power Sector is to be distributed in equitable manner amongst all power sector consumers – coal realization would be same (70-80% of ACQ) for all Power Utilities (old and new) and will create level playing field for all players in the sector

• Growth in Logistics remains a constraint for coal transportation – Railways need to gear up for improving rolling stock availability.

• Port capacity requires augmentation with matching evacuation system

• Demand side management for efficient coal use is also to be focused.

Way forward


Thank You

© LANCO Group, All Rights Reserved POWEREPC INFRASTRUCTURE SOLAR RESOURCES Fuel Supply Issues: An overview.

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