coal-senario for power plant

8/8/2019 Coal-senario for Power Plant

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MAYTAS INFRA ASSETS LIMITED

Coal Scenario


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More than 70% of Coal Mining is utilized for Power Generation

More than 25% of world Bulk cargo is used for Coal Transportation

More than 60% of Annual Revenue will be spent towards purchase of

coal in any Thermal Power Project.

1000 MW Thermal Plant generates a revenue of approx Rs. 1350 Crs

per annum @ Rs.2.5 per Unit. Out of this, cost of coal would be Rs

900 Crores.

Control on Coal Value chain will improve the business process of

Power Plant tremendously.

Coal in the context of a Power ProjectCoal in the context of a Power Project


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Coal Scenario

Coal Quality

Coal Cost

Fuel Agreement

Escalation on coal

Other Important Aspects

In this PresentationIn this Presentation


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Major Coal Mining Countries.Major Coal Mining Countries.

USA

South Africa

India

Indonesia

Vietnam

China

Australia

New Zealand


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Coal Resources inIndia are inEastern India


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Quantity of Coal Reserves in IndiaQuantity of Coal Reserves in India

S.no Resource TotalAccess + Inferred

+ProvedIn Million MT

ProvedIn Million MT

1. Chattisgarh 17145 8403

2. Jharkand 41442 9570

3. MP 73898 36148

4. Orissa 61999 16911

5. West Bengal 27815 11383

6. Other states 31002 13451

TOTAL 253301 95866


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Domestic Coal requirement per Year / MW of Power Generation- 6000 MT

Total Coal Availability in India : 95,866 Mill MT ( Proved )

Considering exploitation of 50% of resources, would provide fuel forgeneration of 80,000 MW for 100 Years.

However production of coal (non coking + lignite) is approx. 380 Mill MTduring the year 2004-05. If increasing the production at 7% per annum for next10 years, mining can generate approx. 747 Mill MT.

This would provide fuel to only 85,000 MW.

D

omestic Coal alone cannot support the Growth. Imported Coal will help support the Growth.


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Coal- BasicFuel For

Steel

cement

Power(Electricitygeneration)

Coal is the most important fuel for India 's power sector.

source of more than 70 per cent of power generating capacity.

Characteristics of CoalCharacteristics of Coal


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Indonesian Coal ( example )Indonesian Coal ( example )


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Coal Potential in Indonesia

Reserves 6.8 Bn Tons

Potential Resources 61.3 Bn Tons

Low/Mid CV Coal 80.00% App.

Largest Coal Exporters since 2005

Production -07 198 Mn Tons

Export -07 160 Mn Tons

Share of Product 80.81%

World Export 25 %


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Ratio of FC to VM is important todetermine the quality of coal

More Moisture content will increase thecost of transportation

More ash content will reduce

productivity and also increase ashhandling cost at Plant site. However coalwith ash content > 34% is to be washed& then transported

Sulfur content can be controlled at plant

Moisture can be controlled at Pitheadwith chemical treatment. This will savecost in transportation cost by 20%

Typical Test report for Indonesian CoalTypical Test report for Indonesian Coal


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ExampleExample


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Characteristics ofD

omestic Coal Chatisgarh, Jharkand, Madhya Pradesh are front runners in Coal Production/

availability.

Most of domestic coal are in Grade F & G

Contains High As content ( up-to 35 40% ) & disposal plan to be made.

Contains Low moisture content ( up-to 5% )

Low Calorific Value ranging from 2000 - 3000 Kcal / Kg

Characteristics of Imported Coal Indonesia, Australia, New Zealand, are important sources of coal

Ash content varies from 5 % to 12 %

Moisture Content varies from 12% to 35%.

Moisture Content can be reduced by chemical treatment at source, which also providessavings in transportation.

High Calorific Value ranging from 5500 - 7500 Kcal / Kg


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Costing of Domestic CoalCosting of Domestic Coal

Approx. Cost of Coal per MT

Cost at Pit head Ranging Rs. 500 to Rs. 1000 for GradeD/E. ( consider average of 750 PMt)

Handling Charges to Loading point From 3km to 10km Rs. 20 PMt / From10 to 20 km Rs. 40 PMt / For distances> 20 Km actual cost. Can beconsidered as Rs. 50 PMt.( on average)

Charges for size restriction Ranging from Rs. 35 to 70 per MT.Consider Rs. 50 PMt.

Charges for loading rate > 3500 mt /hr Rs 18 per MT

Royalty Rs. 115 per MT

Transportation to Plant ( Avg 200 Kms) Rs 350 per MT

Taxes / Cess / Misc etc. Rs 167 per MT

Total Rs. 1500 Per MT


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Coal Block YieldCoal Block Yield


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Costing of Imported CoalCosting of Imported Coal

Cost at Mine incl. Royalty etc.. FromUsd 25 to Usd 35 per MT

(consider average of Usd 30 PMt)Loading Charges at Jetty & againUnLoading & Loading charges at Port

Usd 2 per MT

Transportation Charges from Pit Headto Jetty by Tippers

Usd 3 per MT ( considering 15C perKm / MT)

Transportation Charges from Jetty toPort

Usd 7 per MT for approx.160 Kmsdistance. If it increases, the rate shallbe more say Usd 10 per MT

FOB Charges Usd. 15 to Usd 18 per MT

C, I & F Charges Usd 10 per MT

Handling Charges at Indian Port Rs. 100 per MT

Transportation Charges to Plant Rs. 100 Per MT ( say for 50 kms )

Tax @ 5% + Misc Rs. 150 per MT

Total Usd 70 + Rs 250 = Rs. 3500 per MT


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Photo of a typical barge 5000 MTPhoto of a typical barge 5000 MT


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Coal outcrops & test pitsCoal outcrops & test pits


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Model Fuel Supply agreement

with Coal India 31st May 2008

Model Fuel Supply agreement

with Coal India 31st May 2008

Fuel supply Agreement will be in Force for Minimum 5 Years Agreement can be reviewed after 3 years

BG for 6% of the supply amount shall be deposited to CIL

50% should be deposited before signing the agreement & balance50% after signing ( valid for 3 months after expiry of agreement

period)

Alternative sources should be indicated

Buyer should make arrangements for lifting the scheduled monthsquantities with variations more than 10% per Quarter

No Compensation for Short Supply for upto 60%. Compensation below 60% of quantity shall be as below.


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Compensation below 60% of delivery0.1 x P x (( 100 LD or LL) 40 /100) x ACQ

Level ofDelivery (LD) / Level of Lifting (LL) is calculated as below

LD =DQ+DDQ+FM+RF x 100 / ACQ

DQ -Delivery Quantity

DDQ -DeemedDelivered Quantity - Quantity unable to be delivereddue to failure on the part of Purchaser not deploying adequateresources for lifting such as Rail-wagons / Tippers. Also quality ofcoal not acceptable by Purchaser.

Force Majeure ACQ x Nos of days lost due to Force Majeure/365

RF Quantity no able to be supplied because of rail wagons withreference of agreement between Seller & Railways.


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Performance Incentive to be paid by Purchaser in case CIL suppliesmore than 90% of ACQ in a Year.

Quality to be assessed by the Seller and supplied. Samples shall becollected by Purchase at loading point for quality testing

Purchaser shall install & maintain weigh bridge at Loading point

Purchaser to submit programe for Railwagons / Tippers

Payment shall be by means of Irrecoverable LC


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Escalation Calculation as per CERCEscalation Calculation as per CERC

Annual Escalation Rates for payment purpose as per PPA

Escalation rates for Coal subcomponent in Energy Charge 115.13%

Escalation rate for coal transportation in Energy Charge 66.14%

Escalation rate for inland handling of Coal in Energy Charge 8.86%

Escalation rate for captive Coal mine 8.16%

In case of Imported Fuel, escalation rates applicable for bid evaluationshall be applicable

Escalation rates for Coal subcomponent in Energy Charge 7.61%

Escalation rate for coal transportation in Energy Charge 14.79%

Escalation rate for inland handling of Coal in Energy Charge 4.98%


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The ratio of Minimum & Maximum Energy Charges should not bemore than 0.5 ( to avoid front loading)

For projects based on Imported fuel component, the bids shouldindicate the Usd component for Coal/Transportation/Handling

Each will have separate escalable & Non esclable sub components

Dollar Exchange Rate is based on 3 years Moving Avg Rate ( 0.22)

Imported Coal is based on Barlow Jonkar Index for last 12 yearsPeriod data ( 7.61%)

Coal Transportation is based on Singapore 380 CST Bunker Fuelindex for last 12 years data (14.79%)

Inland Coal Handling is based on Mean of WPI & CPI Series for forlast 12 years data ( 4.98%)


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The above indicate that effective 25% of tariff will be subjected toescalation rates fixed by CERC.

So effectively the tariff would increase by not more than 3% every

year.

This do not fully compensate the actual increase in Cost ( both

domestic & imported coal )


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Other Important AspectsOther Important Aspects

Coal Block allotment ( for domestic coal )

Coal Mine Lease / development / Imported Coal

Technical Parameters of Coal / Yield / Type of Mine

Means of Transportation from Loading Point to plant site

Global Bulk Freight capacity needs careful watch . For increase & decrease of

freight prices.

Global Coal Prices are subjected to variation up-to 200% on demand &Supply

Availability of Mining equipment

Productivity at Mines ( Surface /UG )

Relationship at Production / Mine Company

Environmental & other Cess which may operate because of pollution factors


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THANK YOUTHANK YOU

coal-senario for power plant

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