Fuel Supply & Price UncertaintyCheaper Power Demand by Consumer

1. JSW Energy
Fuel Supply & Price Uncertainty
Cheaper Power Demand by Consumer
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2. JSW Energy
Coal
- The Mainstay for Power Generation In India
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3. High Dependence on Coal
70%
60%
50%
40%
30%
20%
10%
300
250
200
150
100
50
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14 62%
65% 65%
63%
59%
54%
56%
58% 60%
0%
0
End of 6th
Plan
End of 7th
Plan
End of 2
year Plan
End of 8th
Plan
End of 9th
Plan
End of
10th Plan
End of
11th Plan
31-03-13 30-06-14
Nuclear Diesel RES Gas Hydro Coal/Lignite % share of Coal
Installed Capacity in GW
Approx. 60% share of Coal Based capacity – Continuous disproportionate use of
resources - Depletion of Coal reserves
Source-CEA

4. Increasing reliance on imported coal
18
16
14
12
10
8
6
4
2
70
60
50
40
30
20
10
Imported Coal Supply rise from 10 MT to 63 MT (almost 6 times)
Generation loss due to shortage of Coal still persists whereas generation loss due to poor quality
coal has higher share.
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4
14 10
16
23
31
45
63
11
15
8
12
16
0
0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Metric Ton
Imported Coal and Generation Loss due to Coal Shortage
Imported Coal Supply (MT) Loss of BUs
Loss in BUs
Source-CEA

5. Challenges in Domestic Coal Production
• Delay in Environmental Clearances
• Land Acquisition, Rehabilitation & Resettlement
• Transportation
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- Overloaded Railway Infrastructure,
- Distance of Railway Network to Mines
• Quality of Coal – High Ash Content
• Pilferage – Illegal Mining
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6. Challenges in Imported Coal
• Uncertainties:
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- Imported Coal Prices
- Currency Exchange
- Import Duty
- Shipping Costs
• Change in Foreign Law
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7. Summary – Coal Dependent Indian Power Sector
1. India’s dependence on coal for power generation will continue to be
significant.
2. Domestic reserves are large but face serious issues in exploitation for
various reasons
3. Need to introduce commercial mining to improve domestic coal
availability, sooner rather than later.
4. Imported Coal based plant suffering losses on account of under recovery
of energy charges
5. Coal India unable to provide 100% Coal under linkage, however on the
other end we are exporting power generated on domestic coal to
neighbouring countries.
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8. JSW Energy
Gas
- Peaking Power Fuel
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9. Gas Based Idle Capacity
20
18
16
14
12
10
8
6
4
2
40
35
30
25
20
15
10
5
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14 8 9
12
3 6
10
34
12
13 14
16
17 17
18
0
0
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Generation loss due to Shortage of Gas (BUs) Capacity (GW)
Generration Loss (BUs)
Capacity (GW)
Gas supplies increased with the KG‐D6 basin production starting in FY10, but fell in
FY12 and FY13 due to the D6 production falling below anticipated levels

10. Summary - Gas
• Gas availability to the power sector has been uncertain.
• Poor financial health of power distribution companies does not support the
gas based generation.
• Implementation challenges in gas pooling: seems unviable
• Power Sector : priority in gas allocation ? Government intervention required to
maintain availability of gas to the power sector.
• Options for supporting gas based generation :
– gas based generation for peaking power requirements.
– Use of natural gas over coal to reduce environmental/socio‐economic
impacts of coal based generation, etc.
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11. Consumer demands cheaper power
• State Discoms (major buyers of power) are in dire financial crisis.
• Increasing gap between procurement cost and retail tariff.
• Few Discoms preferring load shedding instead of procuring power even at
reasonable tariff.
• Electricity tariff has not been rising with pace of other basic commodities
(petrol, diesel, milk, food items)
• Change in consumers attitude is also required. – Consumers are willing to pay
for high cost diesel generated power but resist tariff increase by Discoms.
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12. How to make power affordable?
• Optimum fuel mix.
• Rationalising the domestic coal prices.
- Prices of indigenously mined coal needs to be aligned to global market to
prevent distortion in the energy market in India. (
• Reduction in AT &C Losses.
• Reforms in Distribution Sector.
• Improved Transmission Infrastructure.
• Renovation and Modernisation of the old power plants for improved efficiency.
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13. 25-Sep-
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14 Thank You