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Coal Shortage Bites – China forced to raise Electricity Prices,Coal Pricing in India might be pooled as 40 GW Thermal Plants without Coal Linkages – Future Dark with India,China to Double Coal Imports

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Coal has become the hottest energy topic in the world’s fastest growing economies India and China which depend on Coal for a majority of their Energy Needs.Despite Coal having many dangerous disadvantages,its Advantages of cheapness and abundance have made it the Fossil Fuel of choice..China consumes almost 45% of the global coal production while Indian demand is growing by leaps and demands as well.Indian Power Utilities are grabbing up Coal Mines in Africa,Australia and Asia to secure feedstock for their gigawatt thermal power plants.Coal as an investment is almost a no brainer with its demand surging and with little alternatives.Here is a list of Coal Companies in India which form a great investment option.Though strange for a Green Investment Blog to recommend Investing in  Coal , the Dirtiest form of Energy,the fact remains that Coal is going to be the hottest investment in the next decade though Media remains focused on Oil and Gas.

China hikes electricity rates to counter shortage

China has raised electricity rates for some industrial users as parts of the country face severe power shortages.The brief Xinhua News Agency report Monday said residential rates were unchanged. It gave no details about where the changes would be imposed.The increase of about 20 yuan (about $3) per 1,000 kilowatt hour presumably is meant to encourage conservation and motivate utilities to produce more electricity though they are payinig more for coal and oil.

China is going to double its imports of Coal to 200 million tons while India too is expected to reach 100 million tons if not more.This has led to a massive increase in the price of coal even as major producers of coal like Bayan Resources,Bhakti Energi ramp up production in Indonesia.India is already suffering major shortages of coal with only 40 GW of the projected 80 GW of new thermal capacity having coal linkages.There are already reports that newly commissioned thermal power plants in India don’t have access to Coal.The government in India is thinking of pooling the prices of imported and domestic coal to lessen the impact of high prices of imported coal on Indian consumers.This has already drawn flak from Indian power companies who have in the recent past invested billions in acquiring foreign coal assets and who would not want to waste this advantage with smaller electricity producers without access to coal.

China coal imports to double in 2015, India close behind

Top coal consumer China should see import demand more than double in the next four years and India will be close behind as both hoover up supplies on international markets to feed rapidly growing power industries, industry executives said on Monday.China’s thermal coal imports could rise to 200 million tonnes in 2015 from around 90 million tonnes in 2011, Neil Dhar, executive vice president of trading house Noble Group, told the Coaltrans Asia conference.At 90 million tonnes, China’s 2011 imports would be steady from 2010, he said. That would indicate shipments would rise for the rest of the year, as China’s imports in the first four months of 2011 were down a quarter on 2010.

Govt to pool coal prices: Power cos worried

Power generation companies have expressed concern over the government’s proposal of “pooling” international and domestic coal prices, which is aimed at selling the raw material at a uniform price to the customers.Pooling refers to the process in which domestic and international prices of material are averaged out to enable uniformity of rates for all consumers, irrespective of where they are sourcing the material from.The pooling of coal prices is likely to be based on the same price pooling principle adopted by the government for LNG (Liquified Natural Gas).The Power Ministry is exploring every opportunity possible to make coal available to companies at a low price so that electricity generation does not suffer and power tariffs are not driven up.

India facing huge shortages with power and coal ministries in tussle

India is facing shortages of coal even as huge thermal power plants are being set up each day.The Power Ministry wants Coal India to sell coal at cheap prices to companies and stop the mechanism of selling coal through market prices.However the Coal Ministry is naturally opposed to this.Coal India sells coal at absurdly low prices which makes no sense and results in high profits for power companies and sets a bad scheme where excess power is consumed and inefficiency.The Power Ministry is using the bogey of power blackouts saying Coal shortage could force the power plants commissioned during 2009-10 to run at a plant load factor (PLF) of as low as 40%.compared to the normal 80%.

Note the National Coal Distribution Policy (NCDP) has been abused as selling cheap coal by Coal India leads to massive corruption as it is sold to sectors like cement and steel for higher prices leading to a windfall for companies which manage to get cheap coal.Only a market driven mechanism for coal will lead to efficiency and easy availability as the current system is hugely abused.

‘Coal linkages for 40,000-MW power projects yet to be obtained’

Power projects of 80,000-MW generation capacity are under construction in the country, with targeted commissioning by 2017, but the government has warned that coal linkages for plants with a combined capacity of 40,000 MW are yet to be obtained.“Coal linkages for 40,000-45,000 MW power projects for the 12th Plan are yet to be tied up,” a Power Ministry official told PTI.In this regard, the Power Ministry has been interfacing with the Coal Ministry regarding the availability of coal, which is a primary ingredient in thermal power generation.“The Coal Ministry has said that it would ask Coal India to evaluate the fuel availability,” the official said.


Abhishek Shah

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