Power Ministry for safeguards in captive coal banking...

 

The power ministry has told the Planning Commission that the proposed system of coal banking should not lead to profiteering among the coal block holders. The ministry has also called for the setting up of an empowered committee to decide on the transfer prices of surplus coal from one project to another.

The Commission is actively exploring the possibility of introducing the system of coal banking. A proposal to this effect was presented to the Plan panel by the Association of Power Producers (APP), a representative body of private power developers.

The APP proposal recommends that Coal India should act as a banker to store the surplus produce from at least 25 captive mines and return the fuel to the block holders once their projects go on stream.

Coal India, however, has refused to be a party to the proposed mechanism saying it cannot give assurances on returning the fuel given the growing demand for it.

After Coal India's refusal, the Commission has decided to allow cashless transfer of coal from one project to another for a maximum period of three years, and its equivalent return subsequently.

But the power ministry has cautioned that the block holder supplying coal should not unduly financially benefit from the banking process.

"There needs to be a balance between the need to appropriately incentivise surplus coal and the need to prevent undue enrichment. The transfer price of surplus coal should be decided by an empowered committee of the coal ministry," the power ministry wrote in a letter to the Commission on November 18.

The BK Chaturvedi committee on coal banking has finalised its report and would likely submit it next week.

The power ministry argued that the captive block owners cannot be allowed to operate under this dispensation for a long period as it would defeat the basic objective of allocating a block for an end-use project.

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Loss of output from captive coal mines costs the nation Rs 1.4 lakh crore...

 

What could be the financial cost to the nation of the loss of output from captive coal mines allocated to corporates over the past decade? The cost is a whopping Rs 1.46 lakh crore -- a result of delayed clearances for coal blocks and the companies’ own failure in developing the mines.

The humongous loss figure has been arrived at by adding the additional cost of coal imported to make good the shortfall with the cost of lost generation of electricity over the past five years.

According to consultancy firm KPMG, the total loss of output from captive coal mines over the past five years stood at 394 million tonne (MT) based on delays with reference to a normative time of 54 months to develop allocated mines. Of this, 200 MT shortfall was substituted by imported coal. Assuming the delivered cost of this coal at Rs 3,980 per tonne, and the cost of domestic coal for a port-based plant at Rs 2,380 per tonne, the additional cost of imported coal works out to Rs 32,000 crore.

The balance shortfall of 194 MT could not be substituted by imports and led to loss of generation. Assuming coal consumption of 0.68 Kilogram for generation of every unit (1 KWh) of electricity, the nation lost 285.2 billion units (BUs) of generation. Further, taking into account the average cost of power at Rs 4 per unit, the total value of lost generation stood at Rs 1,14,000 crore.

Putting the two figures together, the total loss due to captive mining shortfall in value terms adds up to a staggering Rs 1,46,000 crore. E-mails sent to the power and coal ministries seeking comments on the alarming loss figure did not elicit any response.

According to KPMG Partner Santosh Kamath, the loss figure for the power sector highlights the need for increasing the speed of clearances and permits. “The calculation shows the value of time is not adequately recognized or appreciated. This loss is actually a loss to the nation. However, not all the loss of Rs 146,118 crore may be related to delays in clearances as there could be other factors as well. None the less, clearances are a major reason,” he said.

The private power industry does not seem to agree with the analysis. “The coal imports carried out to bridge the shortfall have to be seen only in cases where the project is ready but the mine is not. There are very few such cases,” said Ashok Khurana, Director General of industry body Association of Power Producers (APP).

The government has allocated 218 coal blocks with reserves exceeding 49 billion tonne (BT) to companies since 1993 when the coal mining sector was partially opened up for captive production by private companies. Around a half of the reserves were allocated to the private sector. Around a tenth of the total reserves have been bagged by power generator NTPC alone.

The coal ministry, under fire for alleged irregularities in allocation of blocks, has cancelled allocation of 51 blocks so far based on the recommendations of an inter-ministerial panel that found the efforts made by corporates in developing blocks wanting. Most of the companies have cited delayed environment and forest clearances apart from land acquisition and Resettlement and Rehabilitation (R&R) issues for their failure to commission the mines.

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SAIL seeks change in thermal coal mine allocation rule to PSUs...

 

Anticipating its captive power needs to nearly double in 2-3 years, SAIL wants existing rules for thermal coal block allocation to be amended so as to make government firms without power purchase agreements eligible.

The country's largest steel maker now requires around 1,000 MW power to fire its five integrated steel plants. This will go up to 1,850 MW in the next 2-3 years with the ongoing Rs 70,000 crore modernisation and expansion programme.

Already saddled with 75 percent imports of its coking coal needs, SAIL has flagged the issue to Steel Ministry for soliciting Coal Ministry for allotment of thermal coal mine to the state-run steel maker.

"Intervention of Ministry of Steel is requested for amending in Rule 12 of part-II of Gazette Notification dated December 27, 2012 of Ministry of Coal on auction of coal by competitive bidding," SAIL said.

As per the existing policy, there is no provision for thermal coal allocation for government companies for their captive power plants.

The current policy only allows thermal coal blocks to be allocated for government companies having power purchase agreements with the state utilities prior to January 5, 2011.

"With the increase in the hot metal capacity with the investment of more than Rs 70,000 crore, the power requirement of SAIL is expected to increase to 1,850 MW from the present level of about 1,000 MW in the next two-three years," the PSU said.

SAIL currently has around 14 million tonnes per annum hot metal producing capacity. This will go up to 24 mtpa by the end of next calendar year with the completion of the ongoing expansion.

"The help of the Ministry of Steel is required for taking up the matter with Ministry of Coal for allotment of thermal coal blocks in favour of SAIL being the leading steel maker in the country," SAIL said.

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Sanofi contracted with Suzlon for installation of 2.1 MW windmill for the captive consumption of Ankleshwar facility...

 

Suzlon Energy Ltd has received a contract from Sanofi India for installation of wind mill for the captive consumption of the compaly.

Sanofi contracted with Suzlon for installation of 2.1 MW windmill for the captive consumption of Ankleshwar facility...

Sanofi is a multinational healthcare products manufacturing company having presence in India. The company has manufacturing plants at Ankeshwar (Gujarat) and Goa.

The Ankleshwar site which is one of Sanofi's three GMP (Good Manufacturing Practices) compliant manufacturing units in India,  produces solid dose formulations and active pharma ingredients (API).

Between its two facilities at Goa and Ankleshwar, Sanofi has the capacity to manufacture 8.5 billion tablets annually.

Sanofi is one of few healthcare companies in the country exploring the use of renewable energy sources for its manufacturing operations. In 2012, Sanofi's Goa manufacturing site started using biomass from agro waste to generate energy. In addition to creating employment for local villagers, the biomass project helped reduce the site's steam cost as well as its dependence on fossil fuel.

According to sources, the company has contracted with Suzlon Energy, largest domestic wind turbine supplier, for supply and installation of a 2.1 MW Wind Mill which will be used to cater the captive consumption of the Ankleshwar manufacturing plant.

As said by the company, being a global healthcare leader, it believes in reducing its carbon footprint and using energy responsibly as part of its mission to help protect life on this planet.

 

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