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Published:January 16, 2018 3:13 PM
The year 2017 was expected to witness increase in domestic coal production at double digit growth rates and the coal imports to fall further. However, CIL has been unable to ramp up the coal production in the current fiscal at the expected rate so far. Generally it is observed that the domestic coal production falls during the months of June to September and excessive rainfall in the current year during these months in the coal mining areas led to a greater fall in domestic coal production. The coal production picked up from the month of October 2017 onwards. India's coal imports decreased from 18.59 MT in Apr’17 to 15 MT in Jul’17. However, the trend of declining coal imports got reversed during the period July’17 to Nov’17 and the coal imports increased to 18.39 MT in the month of Nov’17; when the coal stocks in as many as 19 power plants reached super-critical levels during the month of October'17. CIL’s Coal Production Performance & India’s Coal Imports for FY 2017-18 (Upto Nov'17) Month CIL Production (MT) CIL Offtake (MT) Coal Imports (MT) April'17 38.44 45.29 18.59 May'17 40.74 46.41 18.33 June'17 39.66 45.67 15.56 July '17 36.64 44.33 15.00 August'17 37.62 43.74 15.80 September'17 38.77 43.58 16.40 October'17 46.14 48.28 18.78 November’ 17 51.29 50.67 18.39 Apri-Nov.17 329.3 367.97 136.85 Coal Production growth lower than Target The all India domestic coal production by CIL and its subsidiaries has shown year-on-year increase from 462.42MT in 2013-14 to 554.13MT in 2016-17. In the current fiscal year, CIL has produced 383.93 MT of coal for the period (Apr’17-Dec’17) against a target of 406.58 MT of coal production during the same period. The growth in coal production in the current fiscal has been on the lower side mainly due to excessive rainfall in the coal mining regions during the period of June to September 2017. Coal India Ltd. (CIL) targets to reach around 1 Billion Tonnes of coal production by 2019-20, while commercial coal mining is expected to contribute 500 MT of coal by FY’20. The focus of the Government is to enhance coal production by expediting the approval of environment clearances & forest clearances, providing assistance in land acquisition and coordinated effort with Railways for movement of coal. Subsidiary-Wise Production & Offtake of Coal by CIL from 2013-14 to 2017-18 (in MT) Company 2017-18 (Apr-Dec'17) 2016-17 2015-16 2014-15 2013-14 Prod. Offtake Prod. Offtake Prod. Offtake Prod. Offtake Prod. Offtake ECL 28.10 29.64 40.52 42.99 40.209 38.607 40.008 38.47 36.054 36.255 BCCL 21.97 23.76 37.04 34.9 35.861 36.141 34.514 33.672 32.614 34.2 CCL 37.29 49.31 67.04 60.92 61.324 59.582 55.652 55.338 50.022 52.122 NCL 67.45 70.99 84.1 83.46 80.224 78.532 72.484 73.693 68.639 72.111 WCL 27.75 35.19 45.63 39.46 44.815 42.31 41.147 41.246 39.729 39.945 SECL 101.71 110.92 140 137.65 137.934 138.748 128.275 123.223 124.261 122.027 MCL 99.31 101.10 139.21 143.01 137.901 140.234 121.379 123.003 110.439 114.344 NEC 0.35 0.50 0.6 0.78 0.486 0.342 0.779 0.732 0.664 0.577 CIL 383.93 421.41 554.13 543.16 538.754 534.496 494.238 489.377 462.422 471.581 Source: Ministry of Coal The reasons for low growth in coal production by CIL has been EC & FC problems in some mines, land acquisition and R&R problems, excessive rainfall in August and September, law and order issues (mainly in CCL & MCL), evacuation challenges and issues of high accumulation of stock due to less lifting of coal by consumers upto July 2017. India’s Coal Imports increased in current fiscal marginally Increase in domestic coal production, Govt. focus to reduce the dependence on coal imports and initiatives for transparent process for allocation/auction of coal have led to decline in coal imports for the year 2017-18 after falling import levels in the previous fiscal. While the country’s coal imports declined from 203.95 MT in FY 2015-16 to 191.95 MT in FY 2016-17, the declining trend got reversed in the current fiscal and the imports have increased marginally from 134.76 MT during the period Apr-Nov’16 to 136.85 MT during the corresponding period in the current fiscal (Apr-Nov’17). Coal Stock Position of Power Plants reached Critical levels The current year was marked by a temporary coal crisis for a brief spell when as many as 19 non-pithead based power plants reached super-critical coal stock levels in the month of October 2017 leading to disruption in power generation by the power plants. However in the month of December 2017, Coal stocks in Thermal power plants have improved compared to the preceding months. As on 21st December, 2017 there are no pithead power plants with critical coal stock and super critical coal stock. While currently only 3 non-pithead plants are facing critical coal stock (<7 days) and 7 non-pithead power plants are having super critical coal stock (<4 days).The power plants of Sabarmati, Sanjay Gandhi and Bhusawal are having coal stock at critical levels. Chhabra, Suratgarh, Ukai, Wanakbori, Shri Singhaji, GMR Warora and Mauda Thermal power plants are having super critical coal stock. Power Sector Linkage Policy – SHAKTI A more transparent coal allocation policy for power sector SHAKTI (Scheme for Harnessing and Allocating Koyla (Coal) Transparently in India) was notified in the month of May 2017. The SHAKTI policy approved by Cabinet Committee on Economic Affairs (CCEA) allows to the Letter of Assurance (LoA) holders of Thermal Power Plants (TPPs) to sign Fuel Supply Agreement (FSA) with certain specified conditions to fix the fuel supply bottleneck. The policy will benefit most of the private as well as government owned power plants with LOAs & PPAs. This new coal linkage policy for power producers would help ensure fuel supplies in an organized manner and will abolish the effects of the prevailing coal allocation regime New Coal Distribution Policy (NCDP) 2007. The coal linkage allocation to Independent Power Producers also ensures the competitive rates to generate cheaper electricity. To avail benefits of this scheme TPPs also have to start producing before the 31st March, 2022. Third Party Sampling of Coal The year witnessed focus on quality of coal when Coal Controller Organization (CCO) inspected a total of 871 coal samples from 386 mines of Coal India Ltd., leading to the downgrade of 177 mines. As per NTPC record of grades slippages, GCV deterioration for coal billed and coal fired at power station ranges from 395 Kcal to 1900 kcals and multiple-grade slippage was seen in maximum coal sample test results submitted by CIMFR. Grade slippage was highest in BCCL at 98 per cent, followed by CCL 84 per cent and 61 per cent in MCL for coal sampled in November and December 2016. Though CIL has already ramped up its production but quality continues to remain as an issue. The aim is to focus on quality so as to make the domestic coal market more competitive in near future. While the moves commands significance especially at a time when the Government is planning to decrease the dependence on coal imports to preserve foreign exchange reserves; this initiative will also help in positioning India as a major supplier of coal. InfralineEnergy Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the InfralineEnergy (Technologies India Pvt. Ltd.). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.
The year 2017 was expected to witness increase in domestic coal production at double digit growth rates and the coal imports to fall further. However, CIL has been unable to ramp up the coal production in the current fiscal at the expected rate so far. Generally it is observed that the domestic coal production falls during the months of June to September and excessive rainfall in the current year during these months in the coal mining areas led to a greater fall in domestic coal production. The coal production picked up from the month of October 2017 onwards.
India's coal imports decreased from 18.59 MT in Apr’17 to 15 MT in Jul’17. However, the trend of declining coal imports got reversed during the period July’17 to Nov’17 and the coal imports increased to 18.39 MT in the month of Nov’17; when the coal stocks in as many as 19 power plants reached super-critical levels during the month of October'17.
CIL’s Coal Production Performance & India’s Coal Imports for FY 2017-18 (Upto Nov'17)
Month
CIL Production (MT)
CIL Offtake (MT)
Coal Imports (MT)
April'17
38.44
45.29
18.59
May'17
40.74
46.41
18.33
June'17
39.66
45.67
15.56
July '17
36.64
44.33
15.00
August'17
37.62
43.74
15.80
September'17
38.77
43.58
16.40
October'17
46.14
48.28
18.78
November’ 17
51.29
50.67
18.39
Apri-Nov.17
329.3
367.97
136.85
Coal Production growth lower than Target
The all India domestic coal production by CIL and its subsidiaries has shown year-on-year increase from 462.42MT in 2013-14 to 554.13MT in 2016-17. In the current fiscal year, CIL has produced 383.93 MT of coal for the period (Apr’17-Dec’17) against a target of 406.58 MT of coal production during the same period. The growth in coal production in the current fiscal has been on the lower side mainly due to excessive rainfall in the coal mining regions during the period of June to September 2017.
Coal India Ltd. (CIL) targets to reach around 1 Billion Tonnes of coal production by 2019-20, while commercial coal mining is expected to contribute 500 MT of coal by FY’20.
The focus of the Government is to enhance coal production by expediting the approval of environment clearances & forest clearances, providing assistance in land acquisition and coordinated effort with Railways for movement of coal.
Subsidiary-Wise Production & Offtake of Coal by CIL from 2013-14 to 2017-18 (in MT)
Company
2017-18 (Apr-Dec'17)
2016-17
2015-16
2014-15
2013-14
Prod.
Offtake
ECL
28.10
29.64
40.52
42.99
40.209
38.607
40.008
38.47
36.054
36.255
BCCL
21.97
23.76
37.04
34.9
35.861
36.141
34.514
33.672
32.614
34.2
CCL
37.29
49.31
67.04
60.92
61.324
59.582
55.652
55.338
50.022
52.122
NCL
67.45
70.99
84.1
83.46
80.224
78.532
72.484
73.693
68.639
72.111
WCL
27.75
35.19
45.63
39.46
44.815
42.31
41.147
41.246
39.729
39.945
SECL
101.71
110.92
140
137.65
137.934
138.748
128.275
123.223
124.261
122.027
MCL
99.31
101.10
139.21
143.01
137.901
140.234
121.379
123.003
110.439
114.344
NEC
0.35
0.50
0.6
0.78
0.486
0.342
0.779
0.732
0.664
0.577
CIL
383.93
421.41
554.13
543.16
538.754
534.496
494.238
489.377
462.422
471.581
Source: Ministry of Coal
The reasons for low growth in coal production by CIL has been EC & FC problems in some mines, land acquisition and R&R problems, excessive rainfall in August and September, law and order issues (mainly in CCL & MCL), evacuation challenges and issues of high accumulation of stock due to less lifting of coal by consumers upto July 2017.
India’s Coal Imports increased in current fiscal marginally
Increase in domestic coal production, Govt. focus to reduce the dependence on coal imports and initiatives for transparent process for allocation/auction of coal have led to decline in coal imports for the year 2017-18 after falling import levels in the previous fiscal.
While the country’s coal imports declined from 203.95 MT in FY 2015-16 to 191.95 MT in FY 2016-17, the declining trend got reversed in the current fiscal and the imports have increased marginally from 134.76 MT during the period Apr-Nov’16 to 136.85 MT during the corresponding period in the current fiscal (Apr-Nov’17).
Coal Stock Position of Power Plants reached Critical levels
The current year was marked by a temporary coal crisis for a brief spell when as many as 19 non-pithead based power plants reached super-critical coal stock levels in the month of October 2017 leading to disruption in power generation by the power plants.
However in the month of December 2017, Coal stocks in Thermal power plants have improved compared to the preceding months. As on 21st December, 2017 there are no pithead power plants with critical coal stock and super critical coal stock. While currently only 3 non-pithead plants are facing critical coal stock (<7 days) and 7 non-pithead power plants are having super critical coal stock (<4 days).The power plants of Sabarmati, Sanjay Gandhi and Bhusawal are having coal stock at critical levels. Chhabra, Suratgarh, Ukai, Wanakbori, Shri Singhaji, GMR Warora and Mauda Thermal power plants are having super critical coal stock.
Power Sector Linkage Policy – SHAKTI
A more transparent coal allocation policy for power sector SHAKTI (Scheme for Harnessing and Allocating Koyla (Coal) Transparently in India) was notified in the month of May 2017. The SHAKTI policy approved by Cabinet Committee on Economic Affairs (CCEA) allows to the Letter of Assurance (LoA) holders of Thermal Power Plants (TPPs) to sign Fuel Supply Agreement (FSA) with certain specified conditions to fix the fuel supply bottleneck. The policy will benefit most of the private as well as government owned power plants with LOAs & PPAs.
This new coal linkage policy for power producers would help ensure fuel supplies in an organized manner and will abolish the effects of the prevailing coal allocation regime New Coal Distribution Policy (NCDP) 2007. The coal linkage allocation to Independent Power Producers also ensures the competitive rates to generate cheaper electricity. To avail benefits of this scheme TPPs also have to start producing before the 31st March, 2022.
Third Party Sampling of Coal
The year witnessed focus on quality of coal when Coal Controller Organization (CCO) inspected a total of 871 coal samples from 386 mines of Coal India Ltd., leading to the downgrade of 177 mines. As per NTPC record of grades slippages, GCV deterioration for coal billed and coal fired at power station ranges from 395 Kcal to 1900 kcals and multiple-grade slippage was seen in maximum coal sample test results submitted by CIMFR. Grade slippage was highest in BCCL at 98 per cent, followed by CCL 84 per cent and 61 per cent in MCL for coal sampled in November and December 2016.
Though CIL has already ramped up its production but quality continues to remain as an issue. The aim is to focus on quality so as to make the domestic coal market more competitive in near future.
While the moves commands significance especially at a time when the Government is planning to decrease the dependence on coal imports to preserve foreign exchange reserves; this initiative will also help in positioning India as a major supplier of coal.
InfralineEnergy Disclaimer:
The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of the InfralineEnergy (Technologies India Pvt. Ltd.). The organization is not liable for any use that may be made of the information contained therein and any direct/indirect consequences resulting therefrom.
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