CEE Jul-Sep-2012

. . News Brief Energy . • I POWER PRODUCED WITH GOVT COAL CN'l.'f)T Bl= SOLD IN MI=R\.H/1fUT MJ\PLCET Private power producers using coal from government mines cannot sell electricity in the merchant market. The Coal Ministry is insisting that power companies sell electricity through competitive bidding . According to a source, "the Ministry has written to independent power producers to participate in the bids for sale of power or face cancellation of coal block allocation. This would be included as a condition in the allocation process retrospectively." The Ministry has issued the directive after it came to light that some power producers were selling electricity at a much higher rate and were not participating in the bidding. This, the source said, means "the power producers will have to participate in competitive bidding for sale of electric. The firms cannot quote a price higher than that set for projects based on linkage coal." But power producers said the Ministry must look at operational issues when enforcing the order. Mr. Ashok Khurana, Director General, Association of Power Producers, said, "A power producer cannot change from a merchant to regulated model overnight. Moreover, it takes nearly a year to finalize a power purchase bid . At present, no such bid has been issued." Industry experts feel these steps are to check windfall gains to companies that have bagged captive mines. "In a way, this would offer guarantee of power offtake. There is always risk of offtake and fluctuations in a merchant model," said an industry official . However, there is no clarity on operational plants that are selling electricity in merchant markets. "Will they be shut till they finalize a power purchase agreement?" the industry official wondered. The Government is of the view that benefits of electricity produced from cheaper coal sourced from captive mines must be passed on to the consumer. At present, distribution companies seal power purchase agreements with producers selected after tariff-based competitive bidding . Courtesy: The Hindu Business Line, New Delhi, 07. 07. 2012. PAKISTAN: 500 MILLION TONNES COAL RI=SERVI=~ FOUfUD IN PUNJAB The Chief Minister of Punjab, Mian Shahbaz Sharif said that he would prefer to be killed but would not allow opening of fire at people protesting against load shedding. Shahbaz said people are highly enraged over the excessive load shedding in Punjab which is being given a step motherly treatment. He said the provincial government would take steps to generate electricity. He disclosed that as many as 500 millions tonnes of coal reserves coal have been found in Punjab that would help stir the country out of energy crisis. The chief minister said an Australian company was assigned to carry out a survey in Jehlum. "Now, by the grace of Allah the company has presented its report that confirms coal reserves in the region. He questioned as to why the previous government didn't carry out survey in Punjab. He said had it been done in the past, the precious resource could have been exploited for generation of energy. Courtesy: London Commodity News, London - 21.6.2012. INDIAN CEMENl COMPANIES LOOK TO HIGH– ~U• PHUR r.oAL IN US As the Indian cement sector seeks a cheaper alternative to the increasingly scarce pet coke, two companies-Shree Cement and Ultratech have taken one cargo of US high-sulphur coal, with others set to follow suit. India's coal imports are set to grow rapidly to over 100 mt of thermal coal this year, most of it from Indonesia and South Africa destined for power generators. Some Indian end-users are likely to turn to the very high-sulphur Illinois Basin coals to take advantage. Illinois Basin thermal coal of 3.5 per cent sulphur, with a similar energy value, has been trading at a discount of $25/t to European delivered prices or roughly $70/t FOB. US petcoke with 6.5 per cent sulphur and energy content of around 7,000 kc/kg was sold in February at $120/t CIF. Courtesy: Indian Cement Review, June 2012, P14. 25