current status of coal in india status of coal in india. 7 eia energy conference 2016 world coal...

Jitendra Roychoudhury

Current Status of Coal in

India

EIA Energy Conference, Washington DC - 07/12/2016

Introduction: KAPSARC’s

mission and structure

EIA Energy Conference 2016

3

EIA Energy Conference 2016World Coal Markets : The Changing Global Landscape for Coal

An independent non-profit research center focused on

energy economics & policy

Advance understanding of energy economics and act as a catalyst for dialogue, charting a path to better welfare for societies, locally and globally.

Strategic Objectives

Develop sustainable economic frameworks that lead to:

• Lower societal costs of energy supply

• Higher value created from energy consumption

• Better alignment between energy policy objectives and outcomes

4


Research Programs and Focus Areas

5


A KAPSARC research paper

Discussion Papers

A short, 7-10 page, non-attributional,

summary of a KAPSARC Energy

Workshop

Workshop Briefs

Databases (such as policy dB,

weather … etc.) or “tools” such as

models (e.g. CGE model source code

or models for collective decision-

making processes)

Tools and Datasets


Current Status of Coal in India

7


• Coal continues to be a major source of

energy for India.

• Fossil fuels are the major drivers of the

economy.

• Biomass still used significantly in rural

areas.

Role of Coal

Coal, 341.00, 44%

Oil, 178.25, 23%

Gas, 46.50, 6%

Nuclear, 7.75, 1%

Others 201.50, 26%

Primary Energy Mix (2013) (Mtoe,%)

Source: WEO 2015

8


• Power sector consumes the most.

Policy issues that affect power sector

from generation, transmission, transport

and fuel mix will impact coal demand

growth.

• Cement, while a large consumer, tends

to switch to alternatives such as pet

coke when coal prices are high. They

use cheaper alternatives to reduce

operation costs.

• Steel and sponge iron do not have

alternatives to their coal requirements.

Coal Usage Across Sectors

Electricity, 527.1, 64%

Steel and Sponge Iron, 81.05, 10%

Cement, 37.95, 5%

Others, 174.22, 21%

Source: MOSPI Energy Statistics 2014/15 (Provisional)

Raw Coal Usage (Million Tons, %)

9


• Biased toward coal, given domestic coal

resources available.

• Renewables have been growing strongly

over the past few years. Recent policy focus

due to this confidence.

• Gas is constrained by availability and

nuclear suffers due to fuel availability and

long build times.

Fuel Mix in Power Sector

Coal, 186.242, 62%

Gas, 24.508, 8%

Diesel, 0.918, 0%

Nuclear, 5.78, 2%

Hydro & Renewables, 85.632,

28%

Utilities Installed Capacity (GW, %)

Source: CEA, May 2016

10


(Source: Central Electricity Authority- Rate of Sale of Power 2013-14), KAPSARC Analysis) 1 US$ = 67.87 INR*

0

1

2

3

4

5

6

7

0 1 2 3 4 5 6 7 8 9 10

Pri

ce (

INR

/kW

h)

Net Generation (GWh)

Coal Gas Hydro

• Coal - based power plants compete on price and scale.

11


(Source: CEA, KAPSARC Analysis)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3

Jul-

13

Oct

-13

Jan

-14

Ap

r-1

4

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

PLF

Gen

erat

ion

(G

Wh

)

Coal-based Generation Grows, while PLF declines

Hydro (lhs) Gas (lhs) Coal (lhs) Gas Utilization (rhs) Coal Utilization (rhs)

• Financially strapped State Electricity Boards not able to procure electricity to meet demand.

12


Source: HDR, ICMW

• Strong domestic production, import growth muted

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

0

100

200

300

400

500

600

700

800

900

2005-06 2006-07 2007-08 2008-09 2009-10 2010-2011 2011-12 2012-13 2013-14 2014-15 2015-16

Imp

ort

s %

Mill

ion

To

ns

Annual Coal Production and Import (Million Tons)

Domestic Production (lhs) Import (lhs) Imports (%) (rhs)

13


Source: ICMW, HDR Salva

• Imports have declined as domestic production increased and mine stockpiles grew

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

Monthly Coal Production and Import

Imported Coal (Mt) Domestic Production (Mt) Mine Stockpiles (Mt)


Future of Coal in India

15


(Source: Coal Directory of India ,KAPSARC Analysis)

• Declining coal quality and the need for emission controls. Impetus for imports

0

100

200

300

400

500

600

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Thermal Coal Production – Grade wise (Million Tons)

Grade A Grade B Grade C Grade D Grade E Grade F Grade G Ungraded

GCV ( kcal/kg)

Grade A >6401

Grade B 6400>GCV>5801

Grade C 5800>GCV>5401

Grade D 5400>GCV>4801

Grade E 4800>GCV>4201

Grade F 4200>GCV>3601

Grade G 3600>GCV>3201

Ungraded 3200>GCV>1100

16


• Cement plants are located near demand centers and

limestone mines. Higher CV fuels can be transported

further inland. Hence, imports of pet coke and coal

from overseas. Location of cement plants on the

western and southern regions means low CV domestic

coal is expensive to transport.

• Ports on the western and southern regions facilitate in

imports.

• Economic growth will mean higher cement production

and coal requirement.

Cement

17


• Power plants widely distributed across the

country. Need to be near load centers and coal

mines.

• Predominantly subcritical power plants. Only

recently have super critical power plants been

commissioned. Ultra Supercritical is still in

single digits

• Domestic coal quality often responsible for

technology choices.

Power

18


(Source: KAPSARC Analysis)

• Old sub critical power plants need to be replaced with super critical plants.

• Poor quality coal meant that value could be better captured by pit-head based power plants.

Super Critical Power PlantsSub Critical Power Plants Sub Critical Power Plants (more than 25

years old)


Policy Implications

20


Policy Implications

• Coal washeries being set up to

wash poor quality coal.

Progress has been slow due to

commercial reasons.

• Renovation and modernization

of sub critical units still seen as

a cost effective mechanism to

maintain boiler fleet.

• Debt recast and electrification

push should see states

becoming more prudent,

financially.

• Moves to reform the coal

market should see a jump in

supply.

• Push for coal production

expected to increase supply,

however, quality concerns

mean imported coal will have a

market.

• Rationalisation of coal linkages

and supply will see more

efficient movement of coal

• Use of NTPC for solar

bundling/counter party risk will

support coal generation

• Renewables push is ironically

triggering more coal based

generation.

21


Conclusions

• Cheap coal remains critical to Indian economic growth

• Recent higher production hasn’t been absorbed

• Changes in power sector, the biggest consumer of coal, will impact growth

• Policy changes in boiler fleet, mining and transportation will enable India to use coal more effectively

Jitendra Roychoudhury

[email protected]

T +966 11 2903181

www.kapsarc.org

Thank You

current status of coal in india status of coal in india. 7 eia energy conference 2016 world coal...

Documents