CERC allows pass-through of imported coal cost, could shore up 15GW of stressed assets

India’s Central Electricity Regulatory Commission (CERC) has allowed coal plants struggling with poor domestic coal supplies to import the raw material and pass on the higher costs to their customers (DISCOMS) by raising their tariffs. The decision constitutes a “change in law” under provisions of the National Coal Distribution Policy (NCDP) and could offer a lifeline to as many as 15GW worth of stranded coal plants. These plants have struggled to return operational profits because of poor demand for their expensive tariffs, which is further worsened by costlier imports.

BHP loses interest in thermal coal

Global mining giant BHP has signalled its loss of interest in thermal coal, warning investors that the fuel could be phased out as early as within 10 to 20 years. The statement comes amidst developing economies steadily expanding their renewable energy capacities. BHP will instead focus investments in copper, nickel, metallurgical coal and oil. The first two are heavily in demand for use in EVs.

Australia: Carmichael approvals by mid-June despite warnings of huge losses

The newly re-elected liberal government in Australia could sanction pending approvals for Adani Group’s controversial Carmichael coalmine by mid-June this year. The government is known to be close to the country’s coal lobby and is keen to develop the Carmichael coalmine to boost the country’s coal export revenues.

However, Bloomberg has calculated that the mine would lose about $220 million a year over low market prices for thermal coal (at around $66/tonne) – where the cost of production would be around $88/tonne. Several investors and insurers have deserted the Group over the mine’s poor financials and it’s now likely to be financed by Adani itself.

Japan’s MUFG “ends” coal finance, India’s ONGC to boost oil & gas output

Japan’s largest coal power financier, the Mitsubishi UFG Group (MUFG), has announced its exit from new coal power – unless host country conditions demand otherwise. MUFG bankrolled $3.5 billion in coal power projects from 2016-2018 and had 5.2GW of potential projects lined up for finance at the beginning of 2019.

Meanwhile, despite global calls to urgently slash oil and gas production, India’s largest oil & gas developer, ONGC, will boost output from 16 of its projects by 2022-2023. ONGC will increase its natural gas output to 114 billion cubic meter (bcm) and its crude oil output to 54.6 million tonnes. The expansion is likely to call for investments worth over Rs65,000 crore ($9.2 billion).

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