The Impact Of Renewables On the Energy Basket & Coal

Transcription

1 The Impact Of Renewables On the Energy Basket & Coal Harsh Sachdev Managing Director S&T Mining (A SAIL-TATA Steel JV Co.) September 13, 2017 Kolkata

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3 Steel Authority of India Limited (SAIL) is the largest steel-making company in India and one of the seven Maharatna s of the country s Central Public Sector Enterprises.

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5 In a Free Enterprise the community is just not another stakeholder in business but in fact is the very purpose of its existence J N Tata, Founder Tata Group

6 Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise, headquartered in India, comprising over 100 independent operating companies. The group operates in more than 100 countries across six continents, with a mission 'To improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust'. Tata Sons is the principal investment holding company and promoter of Tata companies. Sixty-six percent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation and art and culture. In , the revenue of Tata companies, taken together, was $ billion. These companies collectively employ over 695,000 people. Each Tata company or enterprise operates independently under the guidance and supervision of its own board of directors and shareholders. There are 29 publicly-listed Tata enterprises with a combined market capitalisation of about $ billion (as on March 31, 2017). Tata companies with significant scale include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.

7 Group Today Revenue FY16: $ bn / 677,556 cr from 100+ operating companies Tata Voltas Motors Tata Steel Tata Motors Tata Steel Tata Consultancy Services Tata Power Tata Communications Tata Chemicals Tata Teleservices Tata International Titan Company Tata Global Beverages Largest Companies Tata Capital Taj Hotels Resorts and Palaces Tata Sky Tata Projects Tata AIG General Insurance Tata AIA Life Insurance Infiniti Retail Trent Tata AutoComp Systems Tata Housing Tata Elxsi Market Capitalisation (India) of 29 listed companies as on 31 st March ,774 cr / US$ bn Most valuable business group in India 6.9% of Bombay Stock Exchange's total market capitalisation (US$ 1,875 bn) 4.1 mn shareholders Exchange rate on 31 March 2017 $ = DRIVEN BY VALUES A GLOBAL ENTERPRISE IN PARTNERSHIP WITH SOCIETY GOING FORWARD

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10 S &T Mining Private Limited Background : Company formed as a 50:50 Joint Venture between Tata Steel Limited & SAIL. The company was formed in September 2008 to meet Raw material Requirements of its promoters. The company was formed to quote for captive Coking Coal blocks within India & acquire Coking Coal Blocks Internationally. The company is in the process of tendering a Wash Plant & pursuing a Coal Mine. Both Tata Steel & SAIL are undergoing major capacity expansions and are importing coking coal at present. The company has a services vertical. The company has offices at Kolkata and at Jharia which is the coking coal belt of India.

11 Contents 1. Global Energy Mix 2. Global Coal Scenario 3. Domestic Energy Mix- Present & Future 4. Domestic Coal Scenario 5. Imperatives & issues

12 Global Energy Mix Primary energy world consumption (million tonnes oil equivalent) Primary energy regional consumption by fuel 2016 (percentage) Primary Energy comprises commercially traded fuels, including renewables. World primary energy grew by 1 % in 2016, below the 10 year average of 1.8 %. This was the third consecutive year of growth at 1 % of below. Oil provided the largest increment to energy consumption at 77 million tonnes of oil equivalent (mtoe), followed by natural gas (57 mtoe) and renewable power (53 mtoe). Source : B P Global

13 Global Energy Mix Around 30% of world primary energy supply capacity is coal based and around 40% of electricity is generated using coal. Gradual Transition in the fuel mix continues with a movement away from the fossil fuels. The growth of Coal is set to decline % per annum, in contrast to the past. Oil, Gas & Coal remain dominant sources of energy accounting for more than three fourths of supply in 2035, but down from 85 % in Source : B P Global

14 Contents 1. Global Energy Mix 2. Global Coal Scenario 3. Domestic Energy Mix- Present & Future 4. Domestic Coal Scenario 5. Imperatives & issues

15 Global Coal Scenario Global Coal Production 8,200 8,000 7,800 7,600 7, % 7,200 7,000 6, Coal production by region (million tonnes oil equivalent) Total coal production stood at 7231 Mn T in 2016,a fall of 6.2% over that of 2015 the third consecutive year of decline. Production Mn T Source : BP Global Most of the slowdown is driven by China due to policies which move it towards lower carbon fuels.

16 Global Coal Scenario Source ; BP Global / US Energy China, alone, contributes almost 50% of the total thermal coal production and is the one of the major drivers of the dynamics of Coal Market. China s coal consumption is likely to plateau over the next 20 years. Of the total production of electricity, thermal coal has a major percentage share of about 76%, which has started to decline due to continuously increasing mix of Renewables. Growth in Global Coal has slowed but coal will continue to retain a significant share of electric power generation.

17 Contents 1. Global Energy Mix 2. Global Coal Scenario 3. Domestic Energy Mix- Present & Future 4. Domestic Coal Scenario 5. Imperatives & issues

18 Domestic Energy Mix- 12 th Five Year Plan (FY-12 to-17) Renewable Energy Breakup as on % 14% 22% 8% 56% Small Hydro Power Wind Power BM Power/ Cogen Waste to Energy Solar Power Installed capacity as on 30/04/2017 Source : Energy Planning Report, 2017 Around 60% of India s energy installed capacity is coal based i.e. 194GW of 329 GW. Target was 12 th plan was 88.5 GW Actual achieved 99.2 GW. To follow low carbon growth strategy, GOI is promoting Supercritical technology for coal based power plants, and renewable energy addition with a target of 175 GW by 2022 and GW for has already been installed in the 12 th Five year Plan. COP India is committed to reducing 35 % Energy Intensity Reduction from 2005 levels by 2030.

19 Domestic Energy Capacity Additions- Future Projections Source : Energy Planning Report, 2016 It may be seen that no additional coal based capacity is required during the years , as capacity addition of 50 GW is already under construction. Energy mix by 2022 and 2027 would contain 48% and 39%, respectively, coal based installed capacity. Still, coal based power plants constitute major % share and leads to opportunity for Clean Coal Technology to reduce the CO 2 emission. While Coal shall decline - It would still remain a dependable source of Power Supply Clean Coal Technology coupled with renewal power would be a right way forward.

20 Primary Energy Mix - Future Projections Primary Energy Supply Projections 823 2,602 Renewable Energy Source : NITI Udyog - Draft Energy Policy Ambitious Targets In FY 16 the per Capita Energy Consumption was Kgoe and the per Capita Electricity consumption was 1075 KWh /Year, both of which were one third of the Global Average , ,883 1,788 1, Coal Oil Gas Others Figs in Terwatt Hours 2022 Energy Mix Projections Coal based Power generation capacity is likely to up from the present 192 GW to GW from 2022 to This calls for a revaluation of Coal, its use, clean coal technologies in the energy mix. As per the above 1.1 to 1.4 Bn tonnes of coal would be required by 2040 to meet Domestic energy requirement. 9% 25% 10% Renewable Energy Oil Others 7% Coal Gas 49% 2040 Energy Mix Projections 25% 9% 8% Renewable Energy Oil Others 14% Coal Gas 44%

21 Contents 1. Global Energy Mix 2. Global Coal Scenario 3. Domestic Energy Mix- Present & Future 4. Domestic Coal Scenario 5. Imperatives & issues

22 FY 14. Overall coal consumption growh has started to slow down. Consumption ( MT) Domestic Coal Scenario Domestic Production, Import & consumption FY 13 FY14 FY15 FY 16 FY Domestic Coal Consumption Sectors FY-06Fy-07FY-08FY-09FY-10FY-11FY-12FY-13FY-14FY-15 FY FY-17 Prodn Import Consumption Electricity Steel and washery Cement Others India has a total resource of BT. Domestic Coal production is dominated by CIL, which has over 85 % of the domestic production. Coal is mainly used to produce power.about 3/4 th of total of power produced is through fossil fuels. Imports have declined after steady growth till FY 15. Domestic production has increased from

23 Thermal Coal- Production, Consumption Though the thermal power capacity has increased drastically, the PLF has not reached it peak level at 77.5 % but was at its lowest level at <60 % in FY Distressing the Mining Sector. Reforms are underway in the power distribution companies. The industrial demand has been below the estimated projection because of lower industrial growth. Although coal consumption is slowing down it will retain a major share in power generation till the foreseeable future.

24 Contents 1. Global Energy Mix 2. Global Coal Scenario 3. Domestic Energy Mix- Present & Future 4. Domestic Coal Scenario 5. Imperatives & issues

25 Imperatives & issues I Renewable Power Although Renewal Power is cleaner There are issues related to its storage. Although work is going on it is some distance away. Transmission Lines need to adapt to technology which has peak transmission requirements at certain times in case of Solar & wind Power. Apart from being carbon friendly availability, : reliability, consistency and feasibility are key determinants of 24X7 power for industry and consumers. Wind and solar both depend on weather conditions, and are both variable and uncertain. Solar plants run at 50 per cent effective capacity, since they cannot run at night.. A very large grid scale battery storage would have to be made available in the near future economically, or there will be a need to have backup capacity based on thermal power to augment the variability and uncertainty of renewables.

26 Imperatives & issues II Coal Related The GOI stipulates that coal with Ash > 34 % should not be transported more than 500 Kms form the place of extraction. In order that coal is environment friendly clean coal technologies need to be part of the mining infrastructure.pit Head Wash Pants / Merchant Wash Plants need to be in place. A process of defined time frames for clearances, / default clearances in case of delay s needs to be examined. A concept of a Single window Clearance wherein all clearances which are sought are applied for, in one place, within the various Government departments, Central and Sate. Use of digitisation. The Domestic Coking Coal reserve could be utilized fully, if the end users with wash Plants could be given the same, without disposal of middlings, rejects & tailings disposal restrictions. A long term pricing regime linked to international pricing would encourage setting up of infrastructure which could be used to meet the requirements of clean coal users like Steel Plants.

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