18 October 2019, Volume XVI, Issue 19

Energy News Monitor

MINERS’ STRIKE DISRUPTS COAL SUPPLY Monthly Coal News Commentary: September - October 2019

India mt in June as against 18.75 mt in the corresponding month of the previous fiscal. Total imports of thermal high level committee, comprising cabinet secretary, coal rose to 56.23 mt during the quarter as compared with Department of Economic Affairs secretary, A the year-ago period. The country’s coal imports swelled revenue secretary, coal secretary and Niti Aayog vice- by about 13 percent to 235.2 mt during the year-ended 31 chairman, has recommended some sweeping policy changes to reform the coal sector. Government said that March 2019. CIL along with the PSU SCCL are the only a high-level panel has recommended reforms to privatise companies that till now were allowed to mine and sell coal. the coal sector. One of the biggest recommendations is CIL is the single largest coal producer in the world, to move away from any allocation of captive coal mines. operating through 82 mining areas with seven wholly A one-year roadmap has been recommended to shift all owned coal producing subsidiaries and a mine planning concessions to commercial mining. All new auctions or and consultancy company, it accounts for about 600 mt allotments of coal mines has been recommended for annual production. commercial purpose only. The committee recommend A day long strike by the trade unions of CIL has not removal of private sector’s disadvantageous position by impacted the current coal stock availability at the thermal doing away with the direct coal allotment to PSUs. Other power plants. According to the National Power Portal, recommendations included privatising CIL’s washeries to there are 114 power plants (out of 131) in the country reduce ’s 80 percent import dependency on coking with 12 days of coal stock available in September. There coal for steel, in addition to incentivise the private sector are only three plants with less than four days of coal stock. by auctioning coking coal linkages for 20 years. CIL Two plants have less than seven days of stock. This should auction 222 non-operational, loss making mines means that most of the thermal power plants in the on production sharing basis, the committee country have adequate coal available with them. The recommended. situation will be normalised after the day-long strike, In a bid to liberalise the coal sector, the government is called by five CIL trade unions, namely the Indian planning to invite global players for the roll out of auction National Mineworkers’ Federation, Hind Khadan plan for commercial mining by December this year. The Mazdoor Federation, Indian Mineworkers’ Federation, maiden move aimed at cutting coal exports is set to end All India Coal Workers’ Federation and All India Central the monopoly of domestic giant CIL that accounts for Council of Trade Unions. The unions are demanding that over 80 percent of the India’s dry-fuel output. The roll back of the decision to allow 100 percent FDI in the country’s coal imports increased by 28.7 percent to 24.14 coal mining sector. Coal production in Telangana’s SCCL was affected as the miners went on a day-long strike Coal volumes at major ports grew 11 percent in FY19. called by various unions. The coal production in almost Over the long-term, a sustainable pick-up in industrial all the mines spread across six districts of Telangana was activity and power demand will be crucial for the hit as majority of the over 50,000 employees joined the sustenance of healthy coal imports as domestic strike. The strike might result in production loss of nearly production also ramps up to meet the incremental 200,000 tonnes. The company is estimated to suffer a loss demand, it said. ICRA said CIL’s supply is likely to of over `500 mn. MCL said at least 6,000 tonne coal increase every year by 5-7 percent at least and this will supply and 5,000 cubic meter of overburden removal continue to be a risk for port players that are highly work were affected due to two incidents of work dependent on coal volumes for optimal utilisation of their disturbances recently at its Talcher colliery. Overburden port capacities. In FY19, total cargo handled at Indian removal at Ananta OCP was affected after a man of ports had registered a moderate increase of 5.9 percent to Burdabanpur village unauthorisedly entered the mine 1,280 mt from 1,209 mt during FY18. Major ports premises and damaged equipment to stop dewatering handled 699 mt, whereas non majors handled 581 mt. operations from the sump to the external mine area, the The government has launched a portal for better company said. Coal transportation was obstructed at coordination among the ministries of power, coal and Biswal Chhak near Dera village in Talcher, due to which Indian Railways for coal supply to power plants. The the supply of about 6000 tonne coal from Bhubaneswari Prakash portal – ‘Power Rail Koyla Availability through OCP was affected. Estimated loss due to this was `24 mn. Supply Harmony’ – will enable all stakeholders to South Ltd is supplying only 47 percent monitor coal right from mines to transportation. This of the 12 mt coal sanctioned for Rajasthan, while project will ensure adequate availability optimum Northern Coalfields is supplying only 69 percent of the utilisation of coal at thermal power plants. The Portal is sanctioned 4.15 mt because of the strike of trade unions. designed to help in mapping and monitoring entire coal supply chain for power plants, viz - - coal stock at supply CIL will manage to step up production to near its targeted end (mines), coal quantities/ rakes planned, coal quantity level despite floods hitting mining operations. Ratings in transit and coal availability at power generating station. agency ICRA estimates CIL’s production is likely to fall Through the portal, coal companies will be able to track short of its current year target by 55-75 mt. Its target for stocks and the coal requirement at power stations for this year is 660 mt. Existing coal stocks have helped meet effective production planning. Indian Railways will plan coal demand and production has picked up. ICRA said to place the rakes as per actual coal available at siding and CIL has registered a year-on-year production fall of 23.5 stock available at power stations while power stations can percent in September 2019, as operations were impacted plan future schedule by knowing rakes in pipe line and by flooding of key mines due to heavy rains and labour expected time to reach. issues. ICRA said in order to achieve the targeted annual production or come anywhere close to the annual GIDC has applied for yet another coal block as part of guidance, CIL would have to step up to an average run- the sixth tranche of coal mines opened by CIL. If rate of 2.3 mt coal production per day for the rest of the successful in its bid, the corporation will mine both the year. The company will start producing 1,500,000 tonnes additional coal block along with the Dongri Tal II coal of coal by the end of October. block already allocated to Goa. GIDC intended to rope in validated consultants to help the state with the coal Economic slowdown has impacted coal import cargo in block utilisation and with the auction of the industrial the H1 of this fiscal, as overall cargo growth at major land returned by the special economic zone promoters. ports registered a marginal growth of 1.9 percent to 294 mt rating agency ICRA said. Healthy volume growth in After the Centre recently offered a coal block at the container, crude and iron ore segments was offset by the Singrauli coalfield in to Goa decline in coal and some other bulk cargo volumes, it said. government there was a demand for a whitepaper on the allotment. This is the second time that the Centre has government said increase on coal royalty may lead to hike allocated a coal block to Goa. GIDC, on behalf of Goa in the prices of power. While royalty on coal at present is government, had applied for two tranches that are part of 14 percent, the state government has been demanding to the Dongri Tal Phase II coal block of the Singrauli revise to 20 percent. Royalty on coal was last revised in coalfield. The coal block, if accepted by the GIDC, could April 2012. Though the Centre should revise the rate in address Goa’s power needs for the next 15 to 20 years every three years, the rate remained unchanged for the due to the high coal reserves at the Dongri Tal Phase II past six years. In 2018-19, the state government has tranche 5. earned `19.48 bn as royalty from coal. Odisha produces SCCL has acquired the ‘New Patrapada’ coal block in about one-fifth of the total coal production in the country. Odisha, which is three times bigger than the already The Centre had constituted a sub-group to study coal acquired ‘Saini’ coal block. The block was allotted by the royalty revision which has submitted its report in coal ministry. Once all permissions are sought and February 2018. production starts ‘New Patrapada’ will be considered to Adani Power said power regulator MERC has allowed be one of the biggest coal blocks in the country. Presently pass through of higher coal prices for its Tiroda plant. Singareni extracts 68 mt of coal from its 48 mines but 20 The coal mine allocated to Tiroda plant was de-allocated mt of coal can be extracted from this mine alone, SCCL and the company had to make arrangement for fuel said. ‘New Patrapada’ is one of the many coal blocks in supplies at higher cost. Adani Power arm APML runs Chandipada Thahasil area in Odisha and is approximately Tiroda plant. As per the referred order from the MERC, 15 km away from Saini Coal block which has already been the de-allocation of the Lohara coal block by the coal allotted to it. The coal ministry responded favourably to ministry would qualify as Change in Law, and APML is Singareni’s request to allot more coal blocks in Orissa entitled to compensation for alternative coal used to meet along with Saini Block. The area of ‘New Patrapada’ is 31 the shortfall from the commencement of power supply square km which is almost 3108 hectares. Coal reserves under the PPA. Adani Power said APTEL has allowed its in this area are 1040 mt. Singareni will start coal extraction subsidiary Adani Power Rajasthan to charge a higher cost at Saini Block from 2021 onwards and arrangements are of coal regarding a 1,200 MW power supply agreement being made to start extraction at ‘New Patrapada’ at the with discoms of Rajasthan. The tribunal has allowed the same time. Presently Singareni was producing 67 mt of compensation due to the shortage of domestic coal, the coal and in the next seven years the target was to achieve company said. APTEL has allowed compensation for 100 mt. domestic coal shortfall arising from change in law pertaining to the New Coal Distribution Policy, 2007, and The coal ministry inked an agreement with WBPDCL for the Scheme for Harnessing and Allocating Koyala (Coal) allotment of Deocha Pachami Dewanganj-Harinsingha Transparently in India policy of the Government of India coal block. The project is expected to address the (SHAKTI Policy). immediate and future coal and power requirements of the region. In accordance with the provisions of Coal Block Rest of the World Allocation Rules, 2017, made under the Mines and China will aim to shut a total of 8.66 GW of obsolete Minerals (Development and Regulations) Act, 1957, the coal-fired power capacity by the end of this year, its WBPDCL has been allocated the coal block located in energy regulator said, part of its efforts to curb smog and West Bengal containing an area of 12.28 square kilometre greenhouse gas emissions. The National Energy with estimated reserves of 2102 mt for power generation. Administration didn’t say how much of the target, equal With the Odisha government losing huge revenues due to just under 1 percent of total capacity, had already been to non-revision of royalty on coal, it once again urged the met. All provinces and regions have been ordered to shut Centre to revise the royalty on coal, which is due since coal-fired power units with a capacity of less than 50,000 April 2015. Responding to state’s demand the federal kW the regulator said. Larger units of up to 100,000 kW in regions covered by large-scale power grids will also be to open new mines without their consent. Facing an eliminated, along with those that have reached the end of election, PiS has maintained its strong support for coal their designed service period, it said. China has promised mining as a key energy source for Poland, which to ease its dependence on coal, and it has also forced generates 80 percent of its electricity from coal. But there most of its coal-fired power plants to install ultra-low is growing opposition to mining in Silesia, one of the emissions technology in a bid to curb smog. But while most polluted coal regions in Europe, potentially putting China has cut the share of coal in its total energy mix pressure on PiS. Opinion polls show the party is likely to from 68 percent in 2012 to 59 percent last year, overall win vote with about 40-44 percent. consumption has continued to increase and environmental groups estimate that it still has more than Cerrejon, one of Colombia’s largest coal mines, will 200 GW of new coal-fired capacity in the pipeline. The reduce its operations by up to 18 percent because of a fall China Electricity Council, which represents the country’s in international prices and amid an ongoing court case. power industry, predicts that total coal-fired capacity Colombia, the world’s fourth-largest exporter of coal, could eventually peak at 1,300 GW, up from around faces a potential spending crunch next year as royalties 1,000 GW now. China’s coking coal futures prices fell for from the fuel decline amid a supply glut and slowing a sixth straight session to hit an over five-month low due economic growth in China. Cerrejon, owned by BHP to weak demand for the steelmaking raw material, amid Group Ltd, Anglo American Plc and Glencore, will have production curbs on steel and coke ahead of China’s output of just 26 mt for the next five years, compared to National Day celebrations. The most-traded coking coal the more than 30 mt it was regularly producing until last on the Dalian Commodity Exchange, for January 2020 year. delivery, slumped as much as 3.8 percent to $175.12/tonne, its weakest since 19 April this year. The South African government is in talks with coal firms China’s coking coal purchases, meanwhile, have been that supply struggling power utility Eskom to reduce coal “quite strong”, surging 20 percent to 53 mt in the first prices in a bid to lower energy costs and boost the mining eight months of this year, after a brief period of import sector. In March, energy regulator Nersa granted Eskom control in November and December last year. average tariff increases of 9.4 percent, 8.1 percent and 5.2 percent over the next three years. Eskom owns and South Korea should close up to a quarter of its coal-fired operates more than 13 coal-fired power stations and has power plants between December and February and supply agreements with firms including Exxaro nearly half in March in a bid to tackle pollution, an Resources and South32. advisory body headed by former UN Secretary General Russian steel and coal producer Mechel agreed to pay Ban Ki-moon said. South Korea operates some 60 coal- around $461 million for Gazprombank’s 34 percent stake fired plants, generating about 40 percent of the country’s in the Elga coal project. Elga is one of the world’s largest electricity, but is facing growing calls to improve air coking coal deposits with reserves of 2.2 bt. In 2016, quality, rated as the worst among its peers in OECD in Gazprombank paid 34.4 bn roubles to buy a 49 percent 2017. South Korea has halted some ageing coal-fired stake in Elga from Mechel, which owns the remainder of power plants in recent years to reduce air pollution. The the project, as part of the coal producer’s debt committee also recommended capping operations at restructuring. other coal-fired power plants during those months at 80 German climate protection plans involving the closure of percent. some coal plants might cost €1.2 bn ($1.32 bn) by 2030 Local authorities in Poland’s Silesia coal-mining region without achieving the desired reductions in carbon urged the nationalist Law and Justice (PiS) government emissions, an independent study said. A draft law to drop proposed legislation that would give it the option detailing the plan to shut hard coal fired power plants by offering operators fiscal incentives in auctions, showed CIL: Ltd, PSUs: Public Sector Undertakings, mt: Germany will start shutting coal plants from next year, million tonnes, bt: billion tonnes, mn: million, bn: billion, under a long-term exit plan up to 2038. SCCL: Singareni Collieries Company Ltd, FDI: foreign direct investment, MCL: Coalfields Ltd, OCP: opencast Australian coal producer New Hope Corp Ltd said coal project, H1: first half, FY: Financial Year, GIDC: Goa markets would likely remain volatile in the near term Industrial Development Corp, WBPDCL: West Bengal Power though demand is strong for high-quality thermal coal Development Corp Ltd, MERC: Maharashtra Electricity across Asia, as it posted a 41 percent rise in annual net Regulatory Commission, APML: Adani Power Maharashtra profit. New Hope in the past year signed a $600 mn debt Ltd, PPA: power purchase agreement, APTEL: Appellate facility to fund its Bengalla purchase and to develop the Tribunal for Electricity, discoms: distribution companies, kW: Acland mine and Burton project, based on expectations kilowatt, GW: gigawatt, UN: United Nations, OECD: Organization for Economic Cooperation and Development of demand for its higher-quality thermal coal.

NATIONAL: OIL

After Iran sanctions, India ups crude oil imports its crude exports. China National Petroleum Corp and its from US, Nigeria and Russia units stopped taking Venezuelan oil in August. Others, including RIL, have recently been buying Venezuelan 13 October. India’s top sources of crude oil have gone crude from Russian major Rosneft. RIL needs the type of through a marked change over the last year, primarily due heavy sour crude that Venezuela sells because its to the US (United States)’ sanctions on Iran. With oil refineries are configured to process it. US sanctions on supplies from what had been India’s third-largest supplier both Venezuela and Iran have made it harder for the mostly cut off, other countries have begun climbing up refiners to find supplies of these crude grades. The Indian the list. Not least of these is the US itself, with crude oil firm is sending at least two vessels, the very large crude imports from the country nearly doubling. According to carriers Antonis I. Angelicoussis and Maran Castor, to data from the Directorate General of Commercial Venezuela’s Jose port for loading in late October, Intelligence and Statistics (DGCIS), crude oil imports according to the PDVSA documents. The tankers are from the US stood at 4.49 million tonnes (mt) during the currently passing the Suez canal. April-August period of this year, a 72 percent jump from the 2.6 mt imported during the same period last year. The Source: Reuters country is now India’s sixth-largest oil supplier by volume. NATIONAL: GAS Iran, on the other hand, is no longer among India’s top ten crude oil suppliers with just 1.97 mt shipped during GAIL offers 2 US LNG cargoes and seeks one for the period, an 85 percent decline from last year’s 13.3 mt. India delivery Other countries that have increased crude oil supplies to 15 October. GAIL (India) Ltd has issued a swap tender India include Nigeria and Russia. Data from DGCIS for offering two cargoes of liquefied natural gas (LNG) for this fiscal year shows that Nigeria has taken Iran’s erstwhile spot on the list, becoming India’s third-largest loading in the United States (US) and seeking one for oil supplier with a 22 percent increase in crude oil delivery to India. The offer is for two cargoes loading shipments from 5.8 mt in April-August 2018 to 7.17 mt from the Cove Point plant on 10-12 November and 16- this year. Imports from Russia have also risen 18 December. The sought cargo is for delivery to either significantly. The period saw India buying around 2.13 mt the Dahej or Dabhol terminal in India on 20-23 from the Eurasian powerhouse, a two-fold increase from November. The tender closes on 16 October, with 973,389 tonnes it supplied during the same period last validity expiring on the same day. year. Source: Reuters

Source: The New Indian Express Cabinet to consider splitting GAIL, pipeline Indian refiner RIL to resume Venezuela oil business not to be sold before 2022 loadings after 4-month pause 15 October. The Union Cabinet may by next month 9 October. Indian refiner Ltd (RIL) consider a proposal to hive off gas utility GAIL (India) is scheduled to resume loading Venezuelan crude in Ltd’s pipeline business into a separate entity but its sale October after a four-month pause, according to sources to a strategic investor may not happen before 2022. and internal documents from PDVSA, a move that could GAIL is India’s biggest natural gas marketing and trading help Venezuela’s state-run company drain its large oil firm and owns more than two-thirds of the country’s inventories. The United States (US) in January imposed 16,234 kilometre (km) pipeline network, giving it a the toughest sanctions yet on Venezuela’s oil industry, stranglehold on the market. Users of natural gas have depriving the OPEC member of the main destination for often complained about not getting access to GAIL’s 11,551 km pipeline network to transport their fuel. To a day of new domestic gas onstream beginning mid-2020, resolve the conflict arising out of the same entity owning he said. India, he said, has the right policy framework of the two jobs, bifurcating GAIL is being considered. A providing a higher cap price for natural gas produced proposal is likely to be moved before the Union Cabinet from difficult areas such as deepsea. The government for transferring the pipeline business into a 100 percent mandates a cap price based on alternate fuels for gas from subsidiary. The proposal may be considered and difficult areas, which for the October 2019 to March 2020 approved by the Cabinet this month or latest by period is $8.43 per million metric British thermal unit November. After the Cabinet approval, a consultant will (mmBtu), more than double the $3.23 per mmBtu rate be appointed to transfer the pipeline business into a for other domestic gas. separate subsidiary. This would take 8-10 months to Source: Business Standard accomplish. However, selling off the pipeline subsidiary Total to buy 37 percent stake in Adani Gas for $600 mn to a strategic investor is not likely before 2022 as the to expand India footprint thinking in the government is that the gas market will not be mature before that and state support would be needed 14 October. French energy giant Total SA is spending for GAIL to accomplish building a national gas pipeline $600 mn to expand its presence in one of the world’s grid. GAIL will continue to own the marketing business fastest growing natural gas markets. Total agreed to as also the stakes in liquefied natural gas (LNG) terminals. purchase a 37.4 percent stake in India’s Adani Gas Ltd, a GAIL already keeps separate accounts for its gas pipeline distributor of the fuel that is developing import terminals and marketing businesses, making it easier to split them and a national chain of vehicle-filling outlets. Total said into two entities. By unbundling GAIL and opening the that the acquisition will cost about $600 mn taking into sector, the government hopes to increase gas use to 15 account its divestment in another Indian LNG (liquefied percent of the energy mix by 2030 from current 6.2 natural gas) terminal earlier this year. The deal will give percent. When talk of splitting first started in January last Total access to India’s natural gas market and support its drive to become one of the world’s top LNG players. year, Oil Minister Dharmendra Pradhan had stated that India’s annual LNG demand will hit 28 million tonnes GAIL should focus on laying pipelines, suggesting hiving (mt) by 2023, making it the world’s fourth largest of the marketing business. importer of the fuel. Adani is developing the Mundra and Source: Business Standard Dhamra LNG import terminals in India. It plans to expand its distribution network in the next decade to India’s 100 tcf gas reserves enough to meet half of about 6 mn homes and 1,500 retail outlets for natural gas demand till 2050: BP vehicles. 14 October. UK (United Kingdom) supermajor BP plc Source: Business Standard Chief Executive Officer (CEO) Bob Dudley said there are 100 trillion cubic feet (tcf) of yet-to-be-discovered Dispute-hit Mundra LNG terminal to be commissioned by December

14 October. More than a year since its inauguration, QUICK COMMENT Gujarat government-backed LNG (liquefied natural gas) Increase in domestic gas reserves is a pleasant surprise! Good! project at Mundra, built at an estimated cost of `55 bn, may finally get commissioned by December. A commercial dispute between the partners Gujarat State natural gas reserves in India that would be enough to Petroleum Corp (GSPC) and Adani Group had stalled meet half of the nation’s gas demand till 2050. BP in commissioning of the 5 million tonnes (mt) a year partnership with Reliance Industries Ltd (RIL) is liquefied natural gas (LNG) import facility. The terminal investing about $5 bn to bring about 1 billion cubic feet was mechanically completed in mid-2018 and was inaugurated by Prime Minister Narendra Modi. However, RIL puts off gas bid to 6 November on bidders the commissioning has been stalled due to delay in request due to festive season finalisation of certain lease and sub-commission agreements between the promoters and the Gujarat 10 October. Reliance Industries Ltd (RIL) has put off government. A commissioning cargo from the US bidding for the new gas it plans to produce from eastern (United States) had arrived at Mundra LNG terminal last offshore KG-D6 block to next month following a request November, but it had to be diverted to Hazira after it was from potential bidders. RIL and its partner BP Plc of the not allowed to discharge at Mundra. The Mundra UK (United Kingdom) had put out Notice Inviting Offer terminal, whose capacity will be expandable to 10 mt per (NIO) seeking bids from potential users for the 5 million annum in the future, is designed to have a berth for metric standard cubic meter per day (mmscmd) of natural receiving LNG tankers of sizes 75,000 cubic metres to gas they plan to produce from the R-Cluster Field in KG- 2,60,000 cubic metres, two LNG storage tanks of D6 block from the second quarter of 2020. The bidding capacity 1,60,000 cubic metres each, facilities for was to happen on 11 October, according to the bid regasification and gas evacuation. document. However, the bidding has been postponed Source: Business Standard based on requests of some bidders given the holiday/festival period during October. Bidding will now IOC, ExxonMobil sign MoU for collaboration in happen on 6 November. The rate sought compares to the LNG business government-mandated $3.23 price that its currently 14 October. American oil and gas firm, ExxonMobil, producing D1 and D3 fields in KG-D6 block get. The said it has signed a Memorandum of Understanding government gas pricing policy, however, provides for a (MoU) with Indian Oil Corp (IOC), India’s largest fuel higher cap price for future gas produced from difficult retailer, to expand liquefied natural gas (LNG) initiatives fields like those in deepsea. This cap currently is fixed at in the country. The MoU was signed between IOC and $8.43 per million metric British thermal units (mmBtu). ExxonMobil India LNG Ltd, an affiliate of ExxonMobil. RIL-BP is developing three sets of discoveries in KG-D6 It said that the MoU builds on the long history of block -- R-Cluster, Satellites and MJ -- by 2022 that can productive cooperation between IOC and ExxonMobil produce a peak of 30 mmscmd of gas. The quantity in the LNG space. offered for bidding in the NIO is 5 mmscmd from R- Source: The Economic Times Series fields which will start production in mid-2020. India to invest $60 bn in developing gas supply, Peak output from R-Series is 12 mmscmd, while Satellites distribution: Pradhan will produce another 7 mmscmd beginning mid-2021. MJ field, which will start production in the second half of 13 October. India is investing over $60 bn in developing 2022, also has a planned peak output of 12 mmscmd. The natural supply and distribution infrastructure as it chases NIO said the gas price would be lower of the quoted rate the target of more than doubling the share of natural gas or the government-mandated ceiling for the difficult in its energy base to 15 percent by 2030, Oil Minister fields. The formula RIL is using to price gas for R-Series Dharmendra Pradhan said. Natural gas currently constitutes 6.2 percent of all energy consumption in the fields is different from its last price discovery it made for country. The government is giving special impetus to the coal-bed methane (CBM) from its Sohagpur coal-bed develop gas infrastructure across the length and breadth methane blocks in Madhya Pradesh. RIL ended up of the country connecting north to south and east to west buying the CBM gas from its block after it bid deducting parts of India, he said. City gas distribution network will $1.836 per mmBtu, lower than $3.156 bid by rival Piramal soon cover 70 percent of India’s population, he said. Glass and $3.495 bid by GAIL (India) Ltd. Source: Business Standard Source: Business Standard NATIONAL: COAL

India readies policy to attract foreign investment in per annum. The government plans to cap the upfront coal mining payment for some large blocks which might otherwise run into a huge amount. Many private steel and cement 15 October. India expects to have formulated a policy companies did not participate in the latest round of within the next two weeks to attract foreign investment auction for captive coal mines because they wanted to to its coal mining industry, the country’s Coal Minister hold on to their cash for commercial coal auctions. Pralhad Joshi said. The country planned to invite bids for However, the companies said the blocks were too far coal mining blocks by the end of 2019. It is also creating from the end use plants. The Coal Mines Nationalisation a coal price index as part of plans to open the sector to Act of 1973 mandates that only companies registered in outside investment. India’s recently concluded thermal India can participate in auctions. The Coal Mines Special coal mine auctions received a tepid response, with 15 out Provision Act 2015, which provides for opening up of of 21 attracting fewer than three bidders. Joshi said the commercial coal mining to private and public entities, is government was looking to make investing in coal mines an offshoot of the 1973 Act. more attractive to bidders. Joshi said he expects India’s coal demand to rise more than 21 percent from current Source: The Economic Times levels to 1.2 billion tonnes in 2023, adding that coal would Agitations hit coal supplies from MCL mines in be necessary for the next three decades. Odisha Source: Reuters 13 October. The coal supplies from Talcher and IB valley Private companies may have easy criteria for collieries under the Ltd (MCL) in commercial coal mining auction Odisha were severely hit due to the ongoing agitations by local people demanding employment. At least 60,000 14 October. The government plans to keep minimal tonnes of coal could not be supplied to various qualification criteria for companies to participate in the consumers from Balram open cast project (OCP) at auction of coal blocks for commercial mining. The Hingula area in Talcher coalfields due to the "illegal" stoppages by the residents of Danara village since 6 QUICK COMMENT October, the MCL said. Coal dispatch of around 15,000 Privatisation of coal mining will not necessarily commercialise coal mining! tonnes is also affected due to which MCL has been losing Ugly! around `14.7 mn of revenue directly while the government exchequer is losing `20.58 lakh per day. government has identified 15 large blocks for the pilot Similarly, the residents of Ubuda village stopped mining round of bidding in December, adding that rules, bid operations at a mine of Lakhanpur OCP of Ib Valley documents and agreements for commercial mining are Coalfields in Jharsuguda district, demanding employment. likely to be finalised soon. Each of the 15 identified coal The Lakhanpur OCP is supposed to produce around blocks will have a capacity to produce 4 million tonnes 65,000 tonne of coal daily but it has now come down to 26,000 tonnes due to disturbances. The Odisha Power MPT. The next hearing is scheduled for 11 December. Generation Corp (OPGC) is one of the major consumers Vosco residents fear increase in coal and dust pollution. of coal from Lakhanpur OCP. Source: The Economic Times Source: The Economic Times Coking coal shipments rise 15 percent to 29 mt at 12 Agreement for Madhya Pradesh coal block after state-run ports in April-September financial approval: Industries Minister 9 October. Coal shipments handled by India’s 12 major 12 October. Industries Minister Vishwajit Rane said that state-run ports during April-September rose by 15.25 the state government was yet to grant financial approval percent to 29.29 million tonnes (mt), according to a ports' for the acceptance of the coal block allotted to Goa body. The state-run ports had handled 25.41 mt of coking Industrial Development Corp (GIDC) at Singrauli, coal cargo in the corresponding period of the previous Madhya Pradesh. Once the financial approvals come fiscal. Shipments of thermal or steam coal, however, through, GIDC would go ahead and ink an agreement declined by 13.20 percent to 44.87 mt, the Indian Ports with the Union coal ministry to take over the allocated Association (IPA) data showed. The IPA said these ports coal block for utilisation, Rane said. The Dongri Tal II handled 51.69 mt of thermal coal in the April-September coal block at Singrauli has been allocated to Goa and period of the previous fiscal. According to rating agency Rane had earlier announced that the state would ink the agreement on 10 October. Coal mines have been allotted ICRA, the country’s overall thermal coal import is likely to state governments for sale of coal under the Coal to cross 200 mt mark in 2019-20. It said that Coal India Mines (Special Provisions) Act, 2015. The Dongri Tal II Ltd (CIL)’s production might fall short of its 2019-20 coal block has been allocated to the GIDC from the fifth target of 660 mt by around 55-75 mt. CIL accounts for tranche of the allotment by the coal ministry. Rane had over 80 percent of the country’s domestic coal earlier announced that GIDC would rope in validated requirement. Overall, the 12 major ports recorded a consultants to help the state with the coal block utilisation. marginal 1.48 percent upswing in cargo handling at

Source: The Economic Times 348.44 mt in April-September this fiscal against 343.37 mt in the year-ago period. These 12 major ports are -- HC refuses to stay coal handling at Goa port Deendayal (erstwhile Kandla), Mumbai, JNPT, 11 October. The Bombay High Court (HC) Bench in Mormugao, New Mangalore, Cochin, Chennai, Goa refused to stay coal handling operations at the Kamarajar (earlier Ennore), V.O.Chidambaranar, Mormugao Port Trust (MPT). It also sought pollution Visakhapatnam, Paradip and Kolkata (including Haldia). data on the port town of Vasco, before making a call in These ports handle about 60 percent of the country’s the case. The court was hearing a petition filed by Goa total cargo traffic. Foundation, a non-government organisation, and others seeking end of coal and coke handling operations at the Source: The Economic Times

NATIONAL: POWER

Over 2.5k held in last 18 months for power theft in Power discoms ramp up ratings with better service, Delhi less losses

13 October. As part of a crackdown on electricity theft 12 October. Power distribution companies (discoms), that causes annual losses running into hundreds of crores which are gearing up to ensure round-the-clock supply of rupees, the power distribution companies (discoms) in during festive season, have registered improvement in Delhi have filed over 5,500 complaints in the last one and their ratings, according to the 7th annual integrated rating half years leading to arrest of more than 2,500 violators. report published by the power ministry. Principal Over 4,500 FIRs were registered on the basis of the secretary (energy) and chairman of Power complaints and there have been more than 200 Corp Ltd (UPPCL) Alok Kumar said discom rating had convictions in the same period, discom said. There are improved on account of reduction in aggregate technical three power discoms - BSES Yamuna Power Ltd (BYPL), and commercial losses, timely finalisation of audit BSES Rajdhani Power Ltd (BRPL) and Tata Power Delhi accounts, improvement in consumer service and Distribution Ltd (TPDDL) - providing electricity to over increased power supply. Kumar said the rating of all 6 mn consumers in Delhi. Power theft attracts heavy discoms, except Paschimanchal Vidyut Vitran Nigam Ltd penalty along with jail term of up to five years. In August- covering west UP, had been upgraded by a notch. Rating September this year, the special electricity court of of Purvanchal distribution company, covering east UP, has increased by two notches. Kumar said around 46,000 Karkardooma had directed attachment (and sealing) of 21 consumer service centres for payment of electricity bills properties in East Delhi in connection with power theft were running across the state to improve consumer cases. Since privatisation of power distribution in 2002 in service. Kumar said discoms successfully installed around Delhi, the discoms have been able to bring down 5.3 lakh smart meters in urban areas. aggregate technical and commercial losses from as high as 55 percent to 8 percent currently. Source: The Economic Times

Source: The Economic Times BSES allows users to recharge prepaid metres using e-wallets Andhra Pradesh government seeks Centre’s assistance to resolve power-related issues 11 October. The BSES discoms (distribution companies) will let users recharge their pre-paid electricity metres 13 October. Andhra Pradesh government requested the through e-wallets or its mobile application and website. Central government to constitute a committee to resolve The BSES discoms—BYPL (BSES Yamuna Power Ltd) the power-purchase related issues as it is incurring a and BRPL (BSES Rajdhani Power Ltd) have extended the financial burden on the state. State Power Minister facility to recharge pre-paid metres online through e- Balineni Srinivas Reddy, in a letter to Union Power wallets like Paytm and PhonePe and also through Minister R K Singh, said that the power tariffs, power company’s mobile app and website. The company is purchasing agreements in the state are a matter of leveraging technology and digital platforms to provide a concern. The Minister claimed that the abnormal hassle free experience to its consumers in a big way. integration of Variable Renewable Energy (VRE) into the Consumers can connect with the discom and apply for a grid is causing heavy financial burden to the state host of services, including applying for new connections, government. The Minister, thereby, sought the Centre’s registering complaints, from their homes and offices co-operation in the matter to resolve the issue. using online platforms of the BSES. Source: The Economic Times Source: Business Standard Union Power Minister directs states to clear dues of distribution companies. NIIF and EESL announced a power generating companies new joint venture, IntelliSmart Infrastructure Private Ltd (IntelliSmart), for the smart meter roll-out programme. 11 October. Union Power Minister R K Singh directed This comes against a backdrop of the government the state governments to clear dues of power generation planning to install 250 mn smart meters in the next few companies, a step which he said will boost investor years. With the replacement of 250 mn conventional sentiment and attract investments. He said that attracting meters with smart meters, billing efficiency can improve investments is one of the major challenges that is being from 80 percent to 100 percent, and has the potential to faced by the sector. He said state departments owe about increase revenues of electricity distribution companies `490 bn to electricity distribution companies (discoms), (discoms) by `1,104 bn. IntelliSmart will work so if this amount is recovered then a large portion of dues collaboratively with all stakeholders to procure, deploy will be cleared which will ultimately lessen the burden on and provide operations and maintenance for the smart the power producers. meter infrastructure.

Source: Business Standard Source: Business Standard

Large consulting rooms attached to houses will Delhi government’s free-electricity scheme an attract commercial power tariff: TNERC example of smart governance: CM

11 October. Tamil Nadu Electricity Regulatory 10 October. The Delhi government’s free-electricity Commission (TNERC) has clarified that a consulting scheme will be an example of "smart governance" as it is room attached to a residence will attract commercial tariff encouraging Delhiites to reduce their power if its size is more than 200 square feet. Commercial tariff consumption, Chief Minister (CM) Arvind Kejriwal said. is much more than domestic tariff. Professionals like In August, the Aam Aadmi Party (AAP) government had announced free-electricity of up to 200 units for domestic advocates, doctors, engineers, chartered accountants and consumers and later extended the scheme to tenants others have small rooms attached to their residence. residing in the national capital. He said residents of the Some have a separate meter for the consulting room. In city were trying to consume less than 200 units of most of the cases, the rooms are part of the residence and electricity to avail the benefit. He further claimed that 14 only domestic tariff is charged. In case of consulting lakh consumers in the city who consumed less than 200 rooms attached to a house, the substantial use of units of electricity received zero bill. There are around 48 electricity would be for domestic use. In case of lakh domestic consumers in the national capital. Under consulting rooms not attached to the residence of the scheme, people consuming electricity between 201 professionals, power is used for non-domestic purposes, units and 400 units are eligible to avail 50 percent subsidy according to TNERC. The clarification has been issued from the government on their bills. He had announced based on a directive from the Madras high court. 'Mukhyamantri Kirayedar Bijli Meter Yojna' under which Source: The Economic Times tenants can also avail the free-electricity scheme. Source: Business Standard NIIF, EESL partner for deployment of smart meters pan India UP Power Department working on zero-tolerance for corruption 10 October. The National Investment and Infrastructure Fund (NIIF) has joined hands with Energy Efficiency 10 October. With zero-tolerance against corruption, the Services Ltd (EESL) to implement, finance and operate Power Department in Uttar Pradesh (UP) has ordered a the smart meter roll-out programme of power special audit of the e-tenders in Bahraich, Balrampur, Shravasti and Gonda. Based on the audit reports of these Punjab discom agrees to revised tariff plan for districts, inquiries will also be ordered into e-tenders of Tata’s Mundra unit other districts to ensure transparency in working. In order to ensure that inquiry in these cases of corruption is 9 October. Tata Power Company that is awaiting a completed without any delay and strict action is taken compensatory tariff nod from four procurer states — against those found guilty, the department has done Punjab, Haryana, Rajasthan and Maharashtra — for the constant follow-up at the higher level as well. The Uttar Mundra UMPP (Ultra Mega Power Project), said the Pradesh Power Corp Ltd (UPPCL) has a vigilance unit Punjab discom (distribution company) has agreed to the working under an Additional Director General of Police, tariff plan recommended by the high level committee, who has recommended registering of cases against those and the matter is now awaiting state cabinet approval. found guilty in different inquiries. The Power The Supreme Court allowed the CERC (Central Department undertakes services through outsources in Electricity Regulatory Commission) to amend the PPAs large number and in the past, there have been large (power purchase agreements) of the imported-coal based number of complaints for payment of dues to such power plants as per the recommendations of a high- employees and labourers. power committee (HPC) constituted by the Gujarat Source: The Economic Times government in 2018. The HPC had recommended reduction in fixed charge by `0.20/unit, which would Power ministry asks state to expedite reforms, necessitate banks to reduce debts by `42.40 bn for Tata, advises to stick to PPAs `38.21 bn for Adani and `23.24 bn for Essar Power. 9 October. With the country achieving electrification for Source: The Financial Express all households, the Union power ministry is gearing up for another set of reforms – to improve the availability Average spot power price falls to two-year low of and quality of power. As the Centre passes the baton to `2.77 per unit in September: IEX the states to take forward the reforms, payment delay by 9 October. The average spot power price fell to a two- power distribution companies (discoms), resulting in over year low of `2.77 per unit in September owing to factors dues to power generators, is a major cause of worry. At like low demand, improved coal supply and higher power the same time, several states are reviewing or cancelling power purchase agreements (PPAs) with renewable QUICK COMMENT power projects. In its agenda note, the Centre has issued Low spot price for power signals stagnant demand! Bad! an advisory, asking states not to reopen power purchase agreements. To strengthen last-mile transmission and generation, according to the Indian Energy Exchange distribution network of the state to ensure seamless (IEX). The price at `2.77 per unit was 41 percent lower power supply, the Centre has set the deadline of March than September 2018’s rate of `4.69, the IEX said. All- 2020 to complete all IPDS (Integrated Power India peak demand at 173 GW in September 2019 Development Scheme)-related strengthening work. declined 1 percent over the demand of 175.6 GW in the States must ensure metering of feeders and distribution same month last year. Energy met at 105 billion units transformers, along with centralised collection of the declined 5 percent year-on-year, according to data issued meter data for monitoring and analysis by next year. by National Load Dispatch Centre (NLDC).

Source: Business Standard Source: Business Standard NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Indian Railway to become world first ‘net-zero’ India recognises the need for environmentally carbon emitter by 2030: Railway Minister sustainable development strategy: IMF

15 October. Indian Railways will become the world first 13 October. The International Monetary Fund (IMF) “net-zero” carbon emitter by 2030, Railway Minister looks at India as a country that recognizes the need for Piyush Goyal said. As per the NITI Aayog data, Carbon an environmentally sustainable development strategy as Dioxide emission from Indian Railway was around 6.84 the global community gears up for a decisive fight against million tonnes (mt) in 2014. Amid global concern over climate change. Noting that India is particularly climate change, Indian railways is also working to reduce concerned about prospects for the poorest segments of the carbon emission. Goyal said that the Indian railways its population in the context of this process of will be 100 percent electrically run by 2023. development, he explained how does climate change fit Source: Hindustan Times into the framework. India is fully committed to the Paris agreement. It has made its nationally determined IIT Madras, ExxonMobil Research join hands for contribution pledges, and that implies reducing emissions biofuel research of carbon dioxide (CO2) by a third below 2005 levels that 14 October. The Indian Institute of Technology Madras is relative to the energy intensity of GDP and India seems (IIT Madras) said it has entered into an agreement with to be on track to deliver on its pledges, the IMF’s Fiscal ExxonMobil Research and Engineering Company Affairs Department director Vitor Gaspar said. He said the (EMRE) for research on energy and biofuels. IIT Madras IMF make the point that the nationally determined said it will be a five year joint research agreement focusing contributions that were made by countries for the Paris on biofuels, data analytics, gas conversion and transport, agreement will not deliver safe levels of temperature and is intended towards finding low-emission solutions. increases. He said the IMF has shown that for a $50 per Source: The Economic Times tonne carbon tax, the net benefits for India would be more than 2 percent of India’s GDP (Gross Domestic Product). India to install 2.9 GW wind capacity in 2019 Source: Business Standard 14 October. India is likely to install more wind capacity in 2019 than it did last year, but it will still be well below Bharathidasan University plans to double solar what it used to be earlier. The country will install 2.9 GW power generation in 2019 against 2.3 GW in 2018. In 2016-17, 5.4 GW was 12 October. Bharathidasan University plans to double solar added, while 3.4 GW was achieved in 2015-16. Auctions power generation from the existing 500 kWp (kilowatt peak) were conducted for 5.2 GW until August 2019 but only on its main campus at Palkalaiperur on the outskirts of the 2.9 GW was awarded because of lack of developer city. Utilising funding under RUSA (Rashtriya Uchchatar interest. In the latest wind auction conducted by the Solar Shiksha Abhiyan), the university has established a grid Energy Corp of India (SECI), the nodal agency of the Ministry of New and Renewable Energy (MNRE), only interactive 500 kWp Solar PV (photovoltaic) Power Plant at two developers took part. Even though the original size a cost of ₹ 48.5 mn in 2016. While the RUSA funding was of the tender was 1800 MW, allotment was reduced to ₹40 mn, the university chipped in with the rest. The solar 440 MW. The new YSR Congress government in Andhra plant generating 2,300 units electricity per day with an Pradesh has been attempting to renegotiate wind and average of 69,000 units per month has reduced the solar PPAs (power purchase agreements). monthly energy bill to the tune of ₹5.5 lakh. Source: The Economic Times Source: The Hindu Renewable energy sector adds 4.2 GW in H1 strategy of establishing its prior-use claim over the waters, according to international law. India and China have a 11 October. Even as industry analysts warn of slowdown dispute over the diversion of the Brahmaputra river, in the renewable energy sector, the segment has added which originates in Tibet. Even as India explores a 4,273 MW of new capacity to the grid during the first half diplomatic option, accelerating hydroelectric projects (H1) of this fiscal, which is one of the highest additions such as Lower Subansiri would give it user rights. In order in a first-half year period in the last several years. to facilitate transportation of equipment to the NHPC However, the addition to capacity during the April- Ltd’ project, it is imperative that law and order situation September 2019 is only 36 percent of the target (11,802 is in control in Assam. MW) set for the fiscal. Solar power segment continues to be the major contributor of new capacity growth in the Source: Livemint renewable energy sector with a share of more than two- 175 GW renewables by December 2022, clarifies thirds of the new capacity. 2,921 MW (includes 2,479 government MW ground-mounted and 442 MW rooftop) capacity during April-September 2019, according to the Union 10 October. The Ministry of New and Renewable Energy Ministry of New and Renewable Energy (MNRE). Wind (MNRE) clarified that the deadline for installing 175 GW sector continues to show progress and it added about of renewable energy is 31 December 2022. Thanks to the 1,304 MW of new capacity. During the last fiscal, this devaluation of the rupee, rising finance costs, segment added 1,481 MW and this year it is expected to government-mandated tariff caps in reverse auctions and add more capacity. As on 30 September 2019, total grid- cancellation of renewable project tenders, the pace of connected installed renewable power capacity in India adding renewable generation capacities already slowed stood at 82,589 MW. Industry analysts have warned that down in FY19, when the country added 8.6 GW against the clean energy sector is slipping into slowdown mode 11.3 GW and 11.8 GW added in FY17 and FY18, though the government is ambitious about its targets in respectively. The installed renewable capacity now stands the sector. MNRE said that the government of India has at 81.3 GW. Prime Minister Narendra Modi announced set a target of installing 175 GW of grid connected in the United Nations General Assembly that the country renewable power capacity by 31 December 2022. aims to have 450 GW renewable energy capacity. However, a CRISIL report has warned that India’s Source: The Financial Express installed capacity in renewable energy could increase by Solar thermal players eye 10 percent growth after just 40 to 104 GW by fiscal 2022 from 64.4 GW in fiscal GST rate cut 2019, because of enduring policy uncertainty and tariff glitches. This means the sector will be 42 percent short 10 October. Solar thermal industry players are confident of target. of getting back into the boom trajectory and expect the sector to clock a growth of 10 percent after the reduction Source: The Hindu Business L ine of GST (Goods and Services Tax) rate on inputs for solar Assam steps up efforts for strategic lower Subansiri components from 18 percent to 5 percent. Solar Thermal hydro project in Arunachal Federation of India (STFI) secretary general Jaideep Malaviya said they approached GST directorate general 11 October. In an attempt to ensure that India’s efforts and the finance minister and convinced them to consider to revive work on the long-pending 2,000 MW Lower solar thermal components as part of solar energy and Subansiri project in Arunachal Pradesh doesn’t get apply 5 percent GST on them. Almost 1.5 mn evacuated derailed, Assam has constituted a high power state level tubes for solar water heater were imported during 2018, task force to facilitate work on the strategic project. Any Malaviya said. delay in building hydropower projects in Arunachal Pradesh on rivers originating in China will affect India’s Source: The Financial Express INTERNATIONAL: OIL

OPEC, allies to sustain oil market stability beyond Aramco for them to change grades. Saudi Aramco’s oil 2020: Barkindo processing facilities at Abqaiq and Khurais were attacked by missiles and drones on 14 September, shutting down 15 October. The Organization of the Petroleum 5.7 mn barrels per day (bpd) of its production, or more Exporting Countries (OPEC) and its allies are committed than 5 percent of global supplies. to sustaining oil market stability beyond 2020 with global physical supplies currently relatively tight, OPEC Source: Reuters Secretary-General Mohammad Barkindo said. He said South Sudan to launch auction of licenses for 8 oilfields that compliance with production quotas among OPEC and its allies was at 136 percent. 9 October. South Sudan will kick-start an auction of licenses to develop eight oilfields around the country, the Source: Reuters oil ministry said. South Sudan’s oil production has Shell consortium, Petronas win oil blocks off reached 178,000 barrels per day (bpd) and the country Brazilian coast aims for output to reach 200,000 bpd within the next two years, the ministry said. Long-term, South Sudan aims to 10 October. A consortium of Royal Dutch Shell Plc, ramp up production to 350,000 bpd, Arkangelo Okwang Chevron Corp and Qatar Petroleum won oil exploration Oler, director-general for planning, training and research and production rights in the C-M-713 block off the coast at South Sudan’s oil ministry, said. South Sudan made a of Brazil, paying the government a signing bonus of small oil discovery in Northern Upper Nile State in roughly 551 mn reais ($133 mn). Shortly before, Petronas August, its first since independence in 2011. Oler said Oil won a separate offshore block, C-M-661, with a signing Minister Awow Daniel Chuang would officially launch bonus of roughly 1.116 bn reais. the tender for the licenses at a conference in the capital Source: Reuters Juba on 29-30 October, and that South Sudan would Russian President to discuss stabilising oil prices declare the results in the first quarter of 2020. during Saudi visit Source: Reuters 10 October. Russian President Vladimir Putin plans to INTERNATIONAL: GAS discuss stabilising world oil prices when he visits Saudi Arabia for talks with Saudi King Salman and Crown Iran discovers gas field near Gulf Prince Mohammed bin Salman. Russia hopes to expand 14 October. Iran has discovered a gas field near the Gulf its joint investments with UAE (United Arab Emirates) with enough reserves to supply the capital for 16 years. to $7 bn from $2.3 bn. The Eram field contained 19 trillion cubic feet (538 Source: Reuters billion cubic meters) of natural gas, the National Iranian Oil Company said. The oil ministry said the field was Several Asian refiners to get full Saudi oil supplies located in Fars province, about 200 km (kilometre) south in November of Shiraz. 10 October. At least seven Asian refiners will receive the Source: The Economic Times full crude volumes they requested from Saudi Arabia for November loading, a sign that Saudi production has CNOOC looks to replace COSCO-linked LNG tankers after US sanctions stabilized after disruptions last month. Most of the refiners are getting the crude grades that they want, 11 October. China National Offshore Oil and Gas adding that there was no request from oil company Saudi Company (CNOOC) is on the hunt for liquefied natural gas (LNG) tankers to charter, looking to replace ships it Australian state water utility objects to South 32 had previously hired that are linked to a Chinese company coal mine extension sanctioned by the United States for allegedly transporting 11 October. Australia’s New South Wales water authority Iranian oil. Now, prompt demand by Chinese state giant has lodged a strong objection to a planned extension of CNOOC for LNG ships has caused freight rates for such the life of a coal mine operated by South 32 because of tankers to nearly double to $130,000-$150,000 a day from its predicted impact on water resources that support about $80,000 late, shipbrokers said. Sydney. The Dendrobium metallurgical coal mine is part Source: Reuters of South 32’s Illawarra metallurgical coal division in the Brazil’s Petrobras, Oslo-based Equinor tie up for southern coalfields of New South Wales, Australia’s most populous state, about 75 km (kilometre) south of Sydney. natural gas projects Source: Reuters 10 October. Brazil’s oil company Petroleo Brasileiro SA (Petrobras) said it has signed a Memorandum of Australia’s NAB trims coal price forecast for 2020 Understanding (MoU) with Oslo-based Equinor ASA 9 October. National Australia Bank (NAB) has trimmed focussed on the joint development of natural gas business its forecasts for metallurgical coal and thermal coal for projects. The companies aim to maximize downstream next year given weakening longer term demand prospects, value through thermoelectric generation as well as it said. It now sees thermal coal prices averaging at $70 a feasibility studies related to gas processing assets and tonne in 2020, from $76 previously, and hard coking coal pipelines owned by Petrobras in the Rio de Janeiro region averaging at $150 a tonne from an earlier forecast of $156 where a natural gas processing plant is being built in a tonne, it said. Australia is the world’s biggest coal Itaboraí. The companies intend to combine efforts in exporter. investment in the natural gas, liquefied natural gas (LNG) Source: Reuters and power generation segments. China completes major railway transporting coal Source: Reuters from north to south INTERNATIONAL: COAL 9 October. A major railway in China transporting coal from the country’s northern production hub to China’s September coal imports slip 8.1 percent consumers in the south has gone into operation. The from previous month Haoji railway, which links China’s biggest coal 14 October. China’s coal imports in September dropped production region Inner Mongolia to Jiangxi province in 8.1 percent from a month earlier, as traders held up the south via central provinces including Hubei and purchases amid an increase in domestic supply and Hunan, will significantly cut coal transportation times. slowing demand for the fuel from power generation Source: Reuters companies. Arrivals of coal, including thermal and coking coal, last month were 30.29 million tonnes (mt), the INTERNATIONAL: POWER General Administration of Customs data showed. South Africa’s Eskom challenges latest power tariff Shipments stood at 32.95 mt in August. Imports were up 20.5 percent from 25.14 mt in September last year. In the decision in court January to September period, China, the world’s top coal 11 October. South Africa’s struggling power utility consumer, took in 250.57 mt of coal, up 9.5 percent from Eskom said it was challenging in court the regulator’s the same period in 2018, the customs data showed. latest tariff decision, a move it said was necessary to avert Source: Reuters financial disaster. Eskom, which produces more than 90 percent of the country’s electricity, implemented some of in Myanmar and together with Zeya & Associates it most severe power cuts in several years this year and is started operating a 90 MW plant in Myingyan in March reliant on government bailouts to survive. In March, under a five-year contract. regulator Nersa granted Eskom tariff increases of 9.4 Source: Myanmar Times percent, 8.1 percent and 5.2 percent over the next three years, far below what the utility had sought. At the time Power cut to millions as California faces Eskom said the tariff awards left it with a projected heightened wildfire risks revenue shortfall of around 100 bn rand ($6.7 bn). Eskom 9 October. Electricity was shut off to nearly 750,000 said its board of directors had decided to challenge the California homes and workplaces as Pacific Gas and tariff awards after reviewing the reasons for Nersa’s Electric Co (PG&E) imposed a string of planned power decision. outages of unprecedented scale to reduce wildfire risks Source: Reuters posed by extremely windy, dry weather. The power cut knocked out traffic signals, forced school closures and VPower Group wins Myanmar’s emergency power shut businesses and government offices across northern tender and central California. Some of California’s most 11 October. Hong Kong-listed VPower Group said its devastating wildfires were sparked in recent years by consortium with Myanmar’s Zeya & Associates had been damage to electrical transmission lines from recurring provisionally awarded four of the five emergency power bouts of high winds that then spread the flames through projects tendered by the energy ministry in June. The tinder-dry vegetation into populated areas. consortium said it won three projects that would use Source: Reuters imported liquefied natural gas in Rakhine’s Kyaukphyu, Zimbabwe quadruples electricity prices, pummelling Yangon’s Thanlyin and Thaketa, totalling 900 MW. It impoverished consumers also secured a 20 MW project that would use gas supplied by the government in Kyun Chaung. Letters of 9 October. Zimbabwe hiked its average electricity tariff acceptance for each of the projects have been issued by by 320 percent to ramp up power supplies at a time of the Ministry of Electricity and Energy’s Electric Power daily blackouts, but the move will anger consumers Generation Enterprise, VPower said. The consortium already grappling with soaring inflation that is eroding still needs to negotiate terms of the contract - including their earnings. The southern African nation is the power purchase agreement - with the government. As experiencing its worst economic crisis in a decade, seen of 2018 Myanmar’s electricity generation capacity totalled in triple-digit inflation, 18-hour power cuts and shortages 3539 MW, according to ministry estimates, making of US (United States) dollars, medicines and fuel that VPower an important player in the power market. After have evoked the dark days of the 2008 hyperinflation failing to attract private investment in power generation under late President Robert Mugabe. The second increase over the past few years, the government tendered these in the price of electricity inside three months follows emergency projects to ensure Myanmar could avoid sharp rises in fuel and basic goods prices. The Zimbabwe serious power shortages next hot season, which would be Energy Regulatory Authority (ZERA) said it had some months before the 2020 general elections. Demand approved an application by Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to for power consumption in the country is increasing raise the tariff to 162.16 cents (10.61 US cents) from annually by 15-17 percent, while less than 40 percent of 38.61 cents. the national population has access to electricity. VPower has already completed several emergency power projects Source: Reuters INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

German renewable power levy to rise by 5.5 percent Russia ready to work with US to build Saudi in 2020 nuclear power plant: Rosatom

15 October. A fee levied on German consumers to 14 October. Russia’s state nuclear corporation Rosatom support renewable power will rise by 5.5 percent to 6.756 would be ready to cooperate with partners from the cents per kWh (kilowatt hour) in 2020. The levy is a key United States, Europe and Asia to build a nuclear power part of Germany’s policy to switch to lower carbon plant in Saudi Arabia, Rosatom’s CEO (Chief Executive sources of energy, known as Energiewende, but has Officer) Alexey Likhachev said. sparked criticism from consumers because it makes up 21 Source: Reuters percent of their final bills. Dubai utility gets record low bid to build solar Source: Reuters power plant

Climate change activists target BlackRock in 13 October. Dubai Electricity & Water Authority London (DEWA) selected a contractor that submitted a “record” 14 October. Climate activists targeted BlackRock, the low bid to build a 900 MW solar power plant in the world’s biggest asset manager, in London, demanding emirate, Chief Executive Officer Saeed Mohammed Al that major financial institutions starve fossil fuel Tayer said. The contractor bid 1.7 cents per kWh companies of the money they need to build new mines, (kilowatt hour) for the photovoltaic plant. The decision wells and pipelines. Extinction Rebellion, which uses civil requires a lengthy evaluation before DEWA can publicly disobedience to highlight the risks posed by climate announce the winner, he said. DEWA required offers of less than 2.4 cents per kWh. The plant will be the fifth change and the accelerating loss of plant and animal phase of a sprawling facility in in the desert outside Dubai species, is midway through a new two-week wave of -- the Mohammed bin Rashid Al Maktoum Solar Park, actions in cities around the world. Extinction Rebellion which will have 5 GW of installed capacity by 2030 if wants to cause enough disruption to force governments DEWA completes it as planned. The United Arab to rapidly cut carbon emissions and reverse the collapse Emirates, of which Dubai is the financial hub, had 594 of ecosystems to avert the worst of the devastation MW of installed solar capacity at the end of 2018 -- more scientists project if business as usual continues. than any other country in the Persian Gulf region, Source: Reuters according to the International Renewable Energy Agency. Dubai is on track to produce 7 percent of its electricity EDF Renewables commissions 130 MWp in solar from solar power by 2020 and targets meeting 75 percent energy capacity in Egypt of its needs from solar and other renewables by 2050, 14 October. EDF Renewables said it had commissioned according to the UAE (United Arab Emirates)’s clean 130 megawatt power (MWp) worth of solar energy energy strategy. capacity in Egypt, as it steps up the pace of its Source: Bloomberg development in North Africa. EDF said the latest plants moved it closer to meeting its goal of doubling its net China begins new environmental probe in smog- renewable energy capacity in France and worldwide to a prone Hebei province net amount of 50 GW between 2015-2030. 11 October. China has launched a new audit into Source: Reuters environmental compliance in the northern industrial province of Hebei surrounding Beijing, as it looks to next five years. IAG said the steps would help the airline ensure officials are not dodging efforts to combat contribute both to Britain’s goal for a net zero carbon pollution. China launched countrywide audits in 2015 to economy by 2050 and a United Nations objective to limit help ensure compliance with efforts to curb pollution, global warming to 1.5 degrees. IAG said that aviation with many local authorities accused of turning a blind eye represented only 2 percent of global CO2 (carbon dioxide) to pollution in order to guarantee growth and emissions, and that the airline group’s steps were one part employment. Hebei, which produces a quarter of China’s of a broader solution to make aviation less polluting. steel and is responsible for much of the smog drifting Source: Reuters over the capital, was the test site for the first probe. Hebei has already been under pressure to curb industrial output Indonesia launches agency to manage environment funds over the past month in order to reduce air pollution 9 October. Indonesia launched an agency to manage across China’s coastal regions. funds for climate change management as part of its Source: Reuters efforts to meet its climate goals. The new agency is expected to start operation on 1 January 2020 and will Equinor to invest nearly $550 mn in floating wind have an initial fund of around 2 tn rupiah ($141 mn). The power off Norway funds will come from land reclamation payments and 11 October. Equinor said it will invest nearly 5 bn fines the government collects from environment criminal Norwegian crowns ($549 mn) to build floating turbines cases, as well as from donors. Finance Minister Sri to supply power to several North Sea oil and gas Mulyani Indrawati said the agency could potentially raise platforms, in a move that will allow the Norwegian firm up to 800 tn rupiah ($56 bn) in environmental funds. to cut carbon emissions. The 88 MW capacity project, Indonesia aims to cut carbon emission by 29 percent by called Hywind Tampen, consisting of 11 turbines, would 2030 by its own efforts and 41 percent with international meet about 35 percent of electricity needs at the Gullfaks assistance. and Snorre fields, Equinor said. The project will allow Source: Reuters Equinor to reduce CO2 (carbon dioxide) emissions from Poland plans to triple solar energy capacity this year gas turbines on offshore installations by about 200,000 tonnes per year, an equivalent of emissions from 100,000 9 October. Poland, which generates most of its electricity cars every year, it said. from coal, is planning to triple its solar energy capacity this year, Prime Minister Mateusz Morawiecki said. Source: Reuters Morawiecki said that Silesia, which is still largely British Airways owner IAG commits to net zero dependent on coal despite a recent contraction in the carbon emissions by 2050 industry, will be one of the regions hardest hit by 10 October. British Airways owner IAG said it will measures taken to combat climate change. In June Poland achieve net zero carbon emissions by 2050, becoming the led a handful of eastern EU (European Union) states in first major airlines group to make such a commitment. blocking a push by France and others to commit the bloc The aviation industry is under intense pressure from to net zero emissions by mid-century. Morawiecki said at climate change activist such as Extinction Rebellion, that time that Warsaw wanted a strong compensation which is aiming to shut down London’s City Airport. package for its industrial sector in exchange for agreeing IAG said it would achieve its target with steps such as to commit the target. Earlier in October the Polish energy carbon offsetting for British Airways’ domestic flights minister put the cost of reaching a net zero emissions economy in Poland at €700-900 bn. from 2020, investing in sustainable aviation fuel and replacing older aircraft with more efficient jets over the Source: Reuters DATA INSIGHT Scenario of Coal Transportation through Railways

Coal Loading through Railways Year(s) Average number of rakes per day sourced from CIL

2016-17 253.1

2017-18 265.5

2018-19 280.7

Coal Loading through Railways for Power Sector

Average no. of rakes sourced from CIL 260 255.6

250

240

229.8 230

220 217.3

210

200

190 2016-17 2017-18 2018-19

Source: Compiled from Parliament Questions for Ministry of Coal This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and international information on energy categorised systematically to add value. The year 2019 is the sixteenth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485. Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Opinions are those of the authors (ORF Energy Team). Publisher: Baljit Kapoor Editorial Adviser: Lydia Powell Editor: Akhilesh Sati

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