Factopedia

Energy Industry
 Coal in Power
Coal-fired plants account for about 195 GW of India's 330 GW of installed power capacity.
Around 78 percent of generated power in India still comes from coal-fired plants.
NTPC still plans to invest $10 billion in coal fired power stations over the next 5 years despite the CEAs assessment that the
power plants under construction at present will be able to meet demands till 2027.
India has identified 5.5 gigawatts (GW) of inefficient coal-fired power plants to be retired.
India, which is also undergoing a programme to retrofit several coal-fired plants to reduce emissions, has retired about 4 GW
of coal-fired power plants over the last two years.

21 July 2017
 Coal Imports
India imported coal worth over Rs 1 lakh crore last financial year (2016-17). India is the third largest coal producer in the
world.
Average Coal Import Prices (INDIA)
Coal imports (year wise): Quantity (million Cost Avg (crore/million
Year tonnes) (crores) tonne)
2013-14 : 166.8 MT (million Tonnes) worth Rs. 92,329 crores.
2013-14 166.8 92329 553.53
2014-15 : 217.7 MT worth Rs. 1,04,506.6 crores. 2014-15 217.7 104506 480.05

2015-16 : 203.9 MT worth Rs. 86,033.8 crores. 2015-16 203.9 86033.8 421.94

2016-17 : 190.95 MT worth Rs 1,00,231.3 crores. 2016-17 190.95 100231.3 524.91

The demand of coal is higher than the current level of supply in the country. During 2016-17, as against the total demand of
838.6 MT (provisional), the domestic supply was 647.7 MT. The production target for Coal India in the present fiscal is 600MT.
Average price of imported coal was around Rs. 525 crores per million tonne.

21 July 2017
 Coal Auction to IPPs
Coal India will conduct auctions under governments Shakti scheme for entering into long term coal supply contract with
some 12,000 MW of independent power producers that have long term power purchase agreements with state
distribution companies but does not have coal supply contract.
According to coal sector experts, 1,000 mw of power capacity requires around 4.5 million tonnes of coal. Going by that
calculation Coal India may offer upwards of 50 million in the auction.
The tenure of the coal supply contract would be equal to the tenure of the long term power purchase agreement.
This will help Coal India sell 50 million tonnes of additional coal each year for the next 20-25 years, which is generally the
tenure of the power purchase agreement.
This will also allow these power producers to ensure a steady flow of revenue a large number of which were languishing due
to want to coal.
This will also help banks, in that, coal supply would ensure their loans are serviced regularly

21 July 2017
 HPCL - ONGC
Union cabinet approved the plan to sell governments 51% stake in state-refiner HPCL to explorer ONGC.
This is a step towards creating an oil behemoth which could compete with other major international oil players. This is just the
first step, the government may ask IOCL to acquire smaller Oil India.
State-run oil PSUs consolidated into a single major company will create economies of scale and have higher capacity to bear
risks, improved margins and more efficiency.
Consolidation in oil sector is a globally acknowledged practice. International oil giants such as ExxonMobil and Royal Dutch
Shell too have consolidated exploration, refining and retail operations.
HPCL is a refining company while ONGC is an oil explorer. Consolidation of different operations will give ONGC control over
value chain leading to strengthening of balance sheets.
This deal will also help government meet its disinvestment target by more than one third. The disinvestment target is of Rs
72,500 crore and the deal is valued at nearly Rs 28,000 crore.

21 July 2017
 HPCL ONGC critic
Critics say that the deal will not provide the required synergy to the two companies, but instead, will weaken HPCLs high
credibility. ONGCs parentage can involve interference, participation in upstream, and dilution of a high-performance culture.
HPCL cannot gain much as in this era, oil subsidies have vanished and crude oil prices are unlikely to cross $60 a barrel in
near future.
At current prices, the government stake in HPCL would cost ONGC about $4.5 billion and would raise the acquirers debt-
equity ratio to 0.4 from 0.2 now, according to the report.

21 July 2017