- April 19, 2021
- Posted by:
- Category: Uncategorized
Thus, in case there are multiple owners of a captive plant (also called group captive), they should satisfy the above requirement of a minimum of 51% energy consumption from the captive and collective ownership of at least 26%. Increasing coal production has been one of the key policy objectives ever since India got freedom. Captive power plants have not only benefited the owners, but also the electricity utilities by supplying extra power when there has been a deficit in the power supply. The STU grid usually operates at 66 kV, 132 kV or sometimes 220 kV voltages. Coal is the major fuel for power generation in CPPs, followed by natural gas and bagasse. The coal or mineral produced from these mines is for the exclusive use of the owner company of the mines. the government of India for allocating 194 coal blocks to public and private enterprises for captive use in a flawed, between 2004 and 2009. India's biggest import partner Indonesia has also announced a After coal mining was nationalised in 1973, only state-owned Coal India Limited (CIL) was allowed to sell coal. Coal washery was also included as end use. It is said that if the coal is used for betterment of any inferior grade coal then the middling thus generated should only be used for power generation that to only in self owned power plant. While captive generation certainly has benefits, careful consideration of the various factors such as technology, fuel, nature of load and cost to benefits need to be assessed for evaluation and selection of power procurement option. While deciding to go for setting up a captive generation plant for a factory, the following aspects should be considered: The type of load depends on the purpose for which the industry is being set up. A few companies got more than required coal. NEW DELHI: The government on Wednesday lifted end-use restrictions for coal mines to end the captive mining regime, one of the last vestiges of the licence-quota raj, and opened the gates wider for private entry when the blocks are auctioned for commercial coal mining. Several industries are also using cogeneration plants in which the waste heat from the boiler is effectively utilized in heating applications, one example of such industry is Arvind Mills which is a textile industry. Otherwise, the In June 2013, the CBI registered an FIR against Congress MP Naveen Jindal and Dasari Narayana Rao, former Minister of State for coal. After the Supreme Court cancelled the allocations of 204 captive coal blocks in September 2014, the government responded swiftly. Via the 1993 amendment, the captive mines were allowed to be allocated to power producing companies too. Captive Coal Mining by formation of Joint Venture/Special Purpose Vehicle and applicability of Sales Tax/VAT on transfer of coal to Joint Venture Partners/coal block allocatees - Reg : Downloads File Size:247.87 KB File Type: PDF : 21 : Minutes of 36th Meeting of Screening Committee Held on 7-8 December 2007, 7-8 February, 2008 and 3 July, 2008 in New Delhi to consider Allocation of 23 Coal The wheeling charges are determined by the State Regulatory Commission in their tariff order. Industrial consumers who use the grid for consumption of power from their captive plants have to pay the open access charges. For one, it did not result in optimal utilisation of an important natural resource of the country given that the use was dependent on the industry for which a coal block was allotted. A generation plant is considered captive only if more than 51% of its electricity generated is used by the owner(s) for their own consumption and the minimum aggregate ownership (or individual ownership as the case may be) of the captive generating plant is at least 26%. A typical classification is shown in the figure below. of India (GOI) intends to offer coal blocks through bidding route for captive mining of coal for permitted end use i.e. Captive power reduces dependability on the grid, reduces the cost of electricity which is an input to production processes and surplus electricity can also be sold to the grid, thus bringing in multiple benefits. The goal for the financing of captive plants differs from the Independent Power Producers in the sense that the key objective is to lower the cost of generation and not higher rates of return9. the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner. The apex court agreed to hear the case while monitoring the CBI inquiry. and location of the plant. However, commercial The substantial difference between high market price of coal sold by CIL and lower cost of coal produced by captive blocks; was one of the criteria to ascertain the loss in the CAG report. Ministry of Coal (MoC), Govt. Since 1976, the captive mines were allocated to Iron and Steel companies only. Coal Nationalization, Captive Mining and Coal-Gate - GKToday Key trends. Similar to wheeling losses, STU losses are the losses of the state grid, which are approved by the State Regulatory Commission. In 2007, captive mining were allowed for coal gasification and liquefaction also. The captive coal block policy framed under the Act specifies that even coal rejects and middlings generated during coal washing cannot be sold by any captive coal block owner. for steel, power and cement sectors, notified by Govt. The judgment was a vindication for those who stand for transparency and probity in the process of commercial exploitation of natural resources. The captive mining concept was devised so that the Iron, Steel and Power producing units could get uninterrupted supply of coal. These charges are also determined by the State Regulatory Commission. NEW DELHI: The Centre plans to permit sale of 50 per cent of coal/lignite produced by captive blocks, a move aimed at augmenting the production and increasing the availability of dry fuel. Typically, the open access consumer is connected to the discom network at 33 kV or below. Initially, the rule change did not evoke much interest among private players. Development of coal blocks and end use projects would need to be synchronized so that the coal extracted from a captive block is consumed in the specified end use projects. First government organizations were National Coal Development Corporation (NCDC) and Singareni Collieries Company Ltd. (SCCL). Remaining coal comes from privately owned collieries and captive coal mines. Is it increasing or decreasing in difficulty? For solar rooftop systems, the capital subsidy of 30% on benchmark or project cost (whichever is lower) is provided by MNRE. But meanwhile, a PIL was filed in Supreme Court in September 2012. Recently, renewable sources of energy such as wind, solar and biomass are also being used as captive sources by many industries. Weekly Competition Week 4 September 2019, Weekly Competition Week 2 October 2019, Weekly Competition Week 3 October 2019, Weekly Competition Week 4 October 2019, Weekly Competition Week 1 November 2019, Weekly Competition Week 2 November 2019, Weekly Competition Week 3 November 2019, Weekly Competition Week 4 November 2019, Weekly Competition Week 1 December 2019, Certificate Course in Electricity and Renewable Energy Laws. Another benefit being provided to the solar rooftop systems is net-metering, in which a bidirectional energy meter is installed at the user end and the surplus energy generated can be fed into the grid resulting in further saving on costs. For instance, several textile manufacturers setup captive wind power plants under Ministry of Textiles Technology Upgradation Fund Scheme, wherein they were provided a capital subsidy for setting up the captive plants. The government on Tuesday asked companies having captive coal mines to provide by month end the latest details of coal use, including reasons for delay in developing allocated reserves. The company cannot sell coal or mineral outside. The balance is thermal coal used by power plants (50%), cement industry (17%) and other industries (33%). diesel is often expensive and polluting. These cases against these two was closed in 2014. Section 9(2) gives the right to open access to the captive generator and Sections 38, 39 and 42 provide that open access cross-subsidies and surcharge are not applicable to captive projects. These charges do not include the generation tariff which is payable to the generator or supplier. This decision allowed fresh, transparent means of apportioning finite natural resources. The Central Vigilance Commission (CVC) directed a CBI inquiry in May 2012 on the basis of compliant of two BJP MPs viz. Currently, the group has just one captive coal block with a capacity of 1.6 MT per annum, while its requirement is 25 MT. Issue: A registered person uses coal for the captive generation of electricity which is further used for the manufacture of goods (say aluminium) which are exported under Bond/Letter of Undertaking without payment of duty. Mar, 1999. Sugar factories typically use biomass or bagasse as fuel as it is the end product of sugar manufacturing process. Coal-based thermal captive plants are used for such industries. Sugar factories typically use biomass or bagasse as fuel as it is the end product of sugar manufacturing process. Employing skilled personnel can add extra costs to the tariff of electricity procured from such plants. Captive Coal Mining Issues The policy on captive use of coal blocks has had some major drawbacks. This report also said that the mines where production not started should be cancelled. Further, states have their own capital subsidy for the rooftop systems. Of this, around 25 million tons is metallurgical coking coal for the iron & steel industry. One, within India, the opening up of newer coal mines is facing stiff opposition from environmentalists and tribal groups. While coal based captive power is less expensive, with advancement in solar technology we are growing closer to putting the use of coal behind us once and for all. CAG Say- The premise of the CAGs argument was that the exchequer suffered a huge loss and public and private entities For connectivity, the captive owner has to comply with the rules and regulations of CTU/STU and adhere to the grid codes prescribed by the Central/State Regulatory Commissions. The Indian coal sector was thus dominated by Government and remains so even today. However, unlike the usual industrial consumers, who are supplied power by the distribution licensee, the captive consumers save on cross-subsidy charges and additional surcharges levied by distribution licensee. Captive generation can also play a supplementary role in supplying power to the grid and alleviating power shortages in the country. The losses are determined by the State Regulatory Commission and apportioned to the open access to consumers on the basis of their energy draw. India imports its coal mainly from Australia, Indonesia, New Zealand and South Africa. It has grown at a compound annual growth rate (CAGR) of 5.38 per cent between 2007-08 and 2016-17. From 1993 till 2011, the Coal Ministry under 6 years of NDA rule and rest 11 years under UPA rule had allocated 194 coal blocks for captive mining of which 142 were explored and balance 52 remained either partially explored or unexplored. for captive use. Due to such inefficiency, there could be fuel scarcity in the country if captive plants become mainstream sources of power. Typically, in banking arrangements, the surplus energy generated by a captive user is used by the distribution licensee and the same amount of energy can be used by the captive user at a later time when the energy generation from the captive plant is insufficient. In fact, the agency admitted that Ashwani Kumar and two government officials had changed some parts of its affidavit, though it also maintained that these parts related to preliminary enquiries and changes in these parts did not change the overall character of the report. Thus, this can be huge savings for the industries for which power is a major cost input. He says a captive block gives Now, even heavy power usage industries such as Delhi Metro are buying solar power. can benefit from captive renewable energy. Sugar industries typically setup bagasse based plants in order to optimally utilize the waste product from their factories. for captive use. Land requirements for various types of power plants are tabulated below: Typical financing options for captive plants include self-financing, loans and financing by equipment contractors. The country is plagued by a morally compromised system in which public policy is often overshadowed by power, influence and connections. According to a CIL official, coal that is produced from the blocks allocated by the coal ministry is for captive consumption for the designated power plants. The allotted block of coal can only be used for their own specific use i.e. Companies with political links got multiple blocks while more deserving candidates did not get any. Price hikes in domestic or imported fuel prices could also impact the cost of electricity generated by the captive plant. In 1993, this act was amended to allow for sub-leases to be granted if two conditions are satisfied: This implies that if the coal blocks had junk, it could be sub-leased and that the junk could not blacken our railroads. The adverse impact of the above mentioned scam was on the competitive advantage. The move is aimed at augmenting production and increasing availability of the fossil fuel, said the Union Ministry of Coal in a statement. Via this policy, government started giving coal blocks to companies for captive use. The concept of captive mining means that some mines are allocated to the companies for its own need. 1.86 lakh crore. In May 2013, the CBI submitted to the Court that law minister Ashwani Kumar had been vetting its responses and affidavits to the Court in this case. of India under Section (U/s) 3(3) of the Coal Mine (Nationalisation) Act, 1973. Coal ministry officials say coal banking may lead to hoarding and profiteering by captive power producers. The distribution licensees charge for banking facility. Private players resold the allocation and coal produced in the open market, Moher and Moher Amroli Extension (Sasan Power Ltd), Pakri Barwadih (National Thermal Power Corporation). Proposal to sell 50% of captive coal. The block was awarded to Balco, a subsidiary of Vedanta. For smaller plants, self-financing is the preferred option as depreciation on assets can be used in saving taxes. 10.6 lakh crore due to not auctioning these blocks. complete commissioning of the plant) and supply power to the captive consumer at negotiated rates. Adherence to the rules, regulations and safety measures specified by the Electrical Inspectorate must be complied with for getting clearance from the Electrical Inspector. Additionally, he has a MBA degree in Power Management. Cogeneration is another technology which can be used if steam is also required in the industrial processes apart from electricity. Electricity is one of the major inputs for any industry and industries require a consistent and reliable supply of electricity. In case the power from the captive generator flows through the state grid, STU charges are leviable to the captive consumer. These are the technical losses of the distribution network of 33 kV or below. What updates do you want to see in this article? In 1975, Coal India Limited was formed as a holding company with five subsidiaries namely Bharat Coking Coal Limited (BCCL), Central Coalfields Limited (CCL), Eastern Coalfields Limited ( ECL ), Western Coalfields Limited ( WCL ) and Central Mine Planning and Design Institute Limited ( CMPDIL ). NDA government led by BJP allowed captive coal mining companies to sell coal in the open market Further, reliable and quality supply at reasonable costs is another important factor for industries. The provisions stipulate conducting all future auctions of mineral mines without a captive use restriction and to also allow existing captive coal mines to sell up to half of their production. Also, a large part of non-performing assets (NPA) belong to iron & steel sector, so there was fear of rising NPAs in Public Sector banks. Captive power plants can be classified on the basis of various parameters. Copyright 2009-2019 GKToday|All Rights Reserved, Critical Analysis: Implications of Supreme Court Decision, Current Affairs [PDF] - March 16-31, 2021. Companies and violations The ministrys keenness to formulate a policy on use of surplus coal is also because some captive coal power companies have committed blatant violations and excesses. A grid-based coal capacity of 260 GW suffices across scenarios, with some adjustments required along the extreme scenarios to Some electricity generation companies used to have captive mines. Captive plants may have low efficiency due to smaller size9 and domestic coal. by the State authorities would be called for. Coal blocks were given free resulting in the block-owners making windfall gains. This petition sought cancellation of 194 coal blocks. Thermal plants are quite polluting and cause air, water, and land pollution. In October 2014, Supreme Court cancelled the allocation of 214 out of 218 coal blocks. The captive plant owner has to apply for connectivity to the grid to discom, STU or CTU as the case may be. Captive power is also beneficial for the grid, especially in a power deficit scenario. Captive power can also be used when there is no power supply from the distribution utilities. For a typical large captive power plant (above 25 MW), electricity generation cost is generally below INR 5.0/kWh depending on the type of fuel/technology (coal, gas, solar, wind, etc.) None of the natural resources, in fact, are priced in the country when handed out to private companies for development and production. The basic argument of CBI was that the government chose to NOT to allocate the coal blocks by process of competitive bidding. Charges and losses for the national grid are determined through a point of connection method. Despite private sector participation in a restricted manner, state run Coal India Ltd continued to dominate the market (but with inefficiency) These are charges and losses incurred if the power is being transmitted through the interstate grid. The condition was that these companies could only use the coal for their own use such as in power projects, steel mills, etc. The Coal Mines (Nationalisation) Act, 1973 (CMN Act) allows private Indian companies to mine coal only for captive use. The intent of the captive coal mining policy is to allocate a specific block to a specific need for the country. Heavy load intensive industries such as steel and aluminium have larger power requirements and already have access to coal. However, clearance from the environmental agencies such as MoEF, CPCB, and SPCB can result in higher costs and delays. Environment: The central government plans to permit the sale of 50 percent of coal and lignite produced by captive blocks and has invited comments from the state governments of coal-bearing states, stakeholders, and the general public on the same.. Upon allocation of captive coal block by the Screening Committee the applicant would submit an affidavit in the prescribed format to the effect that all coal mined from the captive block shall exclusively be used in the proposed end use project for which the said block has been allocated and that in case of any slippage in implementation of the end use project or the captive coal mine development Foreign Direct Investment: Pricing Strategy, Virtual currencies : can it be exploited to curb white-collar crimes, Remedies against child pornography in law, Key insights on legal framework of cryptocurrency in India. A few companies decided to petition the Supreme Court to review its order. This number was later revised in the final report to Rs. Via this policy, government started giving coal blocks to companies for captive use. In such cases, going for captive power is the more feasible option. Though the efficacy of such captive plants for energy-intensive processes may be questionable due to the variability of the power supply, many less intensive industries including food industries, textile, and commercial offices etc. Over the years, the governments grip on coal mining was loosened to the extent that private companies could mine coal for captive use. Sometimes, these requirements cannot be aptly fulfilled by the state utilities. Part of the commentariat said that government decision would loss to state in terms of royalty, cess and taxes. | Powered by. The importance of coal in the economy can be gauged from the fact that around 54 % of the current total installed electricity generation capacity and 70% of current electricity generation is coal based. For some industries, the quality of electricity (in terms of harmonics, voltage, and other technical parameters) is quite important. For instance, heavy industries such as steel, aluminium and smelting industries which are energy intensive, generally set up coal-based power plants. With RE, there are other associated benefits given by Central and State Governments which have made them an attractive option for investors. Diesel generators have the advantage of being able to operate without any auxiliary power supply and are very reliable as standalone power sources, however, the fuel, i.e. The Centre plans to permit sale of 50 per cent of coal/lignite produced by captive blocks, a move aimed at augmenting the production and increasing the availability of dry fuel. The ministry said that it has invited comments from the state governments of coal-bearing states and stakeholders/general public on the said proposals. Bid(s) are invited for development, operation & post operation activities of notified captive coal minin g block(s). Captive mining is the coal mined for a specific end-use by the mine owner, but not for open sale in the market. The UPA government refuted the CAG claims on the basis of argument that its a presumptive loss theory as no mining had taken place yet. What is the difficulty level of the All India Bar Examination? Coal-based thermal captive plants are used for such industries. For energy-intensive industries, captive power provides a cheaper option than power from discoms, since the discoms charge additional surcharges and cross-subsidies from industries. In a March 2012 draft report, the CAG accused Government of India of allocating coal blocks in inefficient manner during 2004-2009 period. For captive generators based on renewable sources, other benefits are also available such as Renewable Energy Certificates, discounted wheeling and banking charges, net metering and carbon credits under the CDM Mechanism. The usage of coal is not without its own problems. Post liberalisation reforms in 1993: Government decided to allocate coal mines to various players for captive consumption (in captive mining coal is taken out by a company for its own use and it wont be able to sell it in the market). Coal India Ltd (CIL) and Odisha government-owned Odisha Coal and Power Ltd (OCPL) have joined hands for sale of coal produced from OCPLs captive block at Manoharpur in Jharsuguda as a part of initiatives of the central government to produce more indigenous coal available to country beyond CILs production and cut imports. Arbitrary, non-transparent and ad hoc processes have eroded public faith in decision-making. The Electricity Act of 2003 is an enabler for a captive generation. The verdict, similar to the earlier one that cancelled 122 telecom licences allotted illegally, is an affirmation of the principle that the courts will not countenance the undesirable nexus between public office holders and big business, or anyone profiting from venality. The allotted block of coal can only be used for their own specific use i.e. The companies which relied on coal, could not compete with the companies which had captive coal blocks. As per India Infrastructure Research, the countrys total installed captive capacity is estimated at 80,160 MW as of 2016-17. PLF is the actual average The Coal Ministry had recently notified the mine with about 22 million tonnes (MT) of reserves and is spread across about 4 km as non-CIL block for allotment to private players for captive use. All these mines were nationalized under the Coal Mines (Nationalisation) Act, 1973. Mar, 1996. Nodal Authority, under the coal ministry, has invited applications seeking allotment of two coal mines to state public sector undertakings for the purpose of sale of coal. the coal produced by the sub-lessee will not be required to be transported by rail. Land requirement for setting up a power project varies from technology to technology, hence land availability is a critical parameter in deciding the type of captive project. Apart from the subsidies, easier financing, concessional import duties, excise duties and tax holidays are also provided for grid-connected solar systems. The law allows only captive use of coal in notified sectors such as iron and steel, power, cement, and coal to liquid projects. The country was already dependent on coal import and this dependence further increased. These charges are specified on a monthly basis by CERC and the losses are specified on a weekly basis. The supreme court decision was a logical outcome of the case. Many states have given waiver in banking facility for renewable energy projects. Different types of industries have different choices on the type of captive plant they choose to set up. Copyright 2016, All Rights Reserved. Hence, if both captive generation plant and load are connected to the same discom network of 33 kV or below, wheeling charges would be payable by the captive consumer. Govt to allot 9 coal blocks to PSUs for captive power generation & commercial use 11 Jun, 2018, 05.19 PM IST. The captive mining concept was devised so that the Iron, Steel and Power producing units could get uninterrupted supply of coal. Captive power plants may lack skilled and trained manpower for the day to day operations of the power plant9. Hence, in case of load shedding, backup diesel generators can be used to supply captive power. To manage the non-coking coal mines, the Coal Mines Authority Limited (CMAL) was set up and National Coal Development Corporation were brought under the Central Division of the CMAL. Written by Arun Mehta, pursuingCertificate Course in Electricity and Renewable Energy Laws offered by Lawsikho as part of his coursework. Fuel availability could be an issue for captive plants, especially if they do not have firm contracts or captive mines for sourcing coal, or have space constraints for fuel storage9. Under the Nationalisation Act, the allotment of coal mines for captive use was based on the recommendation of a high-powered committee chaired by the Secretary, Ministry of Coal. Ministers and CMs of the coal rich states lobbied for allotment to desired private players. Subsequent hearings in the case led to CBI filing affidavits on specific details of its demand for greater autonomy. The blocks were taken away from Coal India and were given for captive use. An example of such industry is the textile industry in which the waste heat from a steam boiler can be used for further industrial processes. The functioning of the screening committee which evaluated the coal applications was opaque. Private companies could not extract coal for sale to others, but they were allowed to own and mine blocks for captive useto feed their power, steel and cement plants, and for coal gasification. The four coal blocks which were exempted included two ultra mega power projects. Captive Mining Policy is there in place since 1970s but it became a major policy only after 1993. Cogeneration is another technology which can be used if steam is also required in the industrial processes apart from electricity. The major approvals required are environmental clearance and safety clearance from the Electrical Inspector. Coal blocks for captive use allotted by the earlier regime had been struck down by the Supreme Court on charges of illegality. amendments to the Coal Mines Nationalization Act, the Government progressively allowed coal mining for captive end-use by private companies engaged in specific priority sectors that included iron & steel, power, washing of coal, cement, and syn-gas (coal to liquid). The ordinance allows coal mining by any company present in sectors other than steel and power, and does away with the captive end-use criteria. but the sale of coal in open market was not permitted. In certain cases, the financing is done by the equipment supplier companies, who do turnkey contracts (i.e. Prakash Javedkar (currently Environment Minister) and Hansraj Ahir.
Bluff Master 2020 Imdb, The More You Ignore Me Trailer, Two Guys And A Girl, Sweet Chariot, Bannerghatta Road, Capiz Shell Cebu, Cancer Vessie Homme, Clozapine Monitoring Nice Guidelines, Agios Konstantinos To Skopelos, Fair Trade Coffee Beans 1kg, Law & Order: Special Victims Unit Season 8 Episode 18,