1. INTERNATIONAL COAL PRICES AND
ITS EFFECTS ON POWER GENERATION
Asok Dasgupta
President- Independent Power
Producers Association of India (IPPAI)
Sri Lanka, Colombo: 1st March, 2012

2. COST OF GENERATION OF ELECTRIC
POWER THROUGH THERMAL(COAL)
GENERATION
UNIT COST OF
ELECTRICITY=FIXED
FIXED COST IS DEPENDENT ON
COST+VARIABLE
COST
COST OF INSURANCE
CAPITAL COST O&M COST DEPRECIATION
MONEY COST
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3. These Costs Depend On:
Demand
Financial
and Supply Inflation
Market
Position
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4. Variable Cost Varies as per
Cost of Consumables and
Cost of Coal
Spares
THESE COSTS DEPEND ON DEMAND AND
SUPPLY SITUATION OF COAL WHICH IN TURN
DEPEND ON DEMAND AND SUPPLY OF
OTHER FUELS LIKE OIL,GAS AND NUCLEAR
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5. Characteristics
of Coal Thermal
Properties
of Coal
Composition
Calorific
Non Coking Value
Coking Coal
Coal
Carbon
Ash
Sulfur
For Steel For Power
Making Generation Moisture
Volatile
Matter
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6. • Heat Rate for Thermal Generation
• Heat Input/Electricity Output
• KCAL/KWH
• Calorific Value
• Heat Content Per Kg
• KCAL/Kg
• VARIABLE COST=HEAT RATE/CALORIFIC VALUE
=KG/KWH
– HIGHER THE CALORIFIC VALUE
– LOWER THE INPUT OF COAL
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7. World Production of Coal
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8. DEPENDENCE ON COAL FOR POWER
GENERATION
South Africa 93 % Israel 65%
Poland 90% Czech Republic 56%
China 79% Morocco 55%
Australia 76% Greece 55%
Kazakhstan 70% USA 45%
India 69% Germany 44%
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9. Coal: Proved Reserves 2010
Coal: Proved Reserves at end 2010 (Million Tonnes)
Anthracite Sub-bituminous
COUNTRIES and bituminus and lignite Total Share of Total R/P ratio
Australia 37100 39300 76400 8.9% 180
China 62200 52300 114500 13.3% 35
Czech Republic 192 908 1100 0.1% 22
Greece - 3020 3020 0.4% 44
India 56100 4500 60600 7.0% 106
Indonesia 1520 4009 5529 0.6% 18
Kazakhstan 21500 12100 33600 3.9% 303
Poland 4338 1371 5709 0.7% 43
South Africa 30156 - 30156 3.5% 119
US 108501 128794 237295 27.6% 241
Total World 404762 456176 860938 100.0% 118
of which: OECD 155926 222603 378529 44.0% 184
Non-OECD 248836 233573 482409 56.0% 92
European Union # 5101 51047 56148 6.5% 105
Former Soviet Union 86725 141309 228034 26.5% 452
Source of reserves data: Survey of Energy Resources, World Energy Council 2010.
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10. World Coal Production by Region 2008-2035 (Quadrillion Btu)
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15. • It was forecasted that Coal, Natural Gas and Nuclear power will continue
to hold their importance as a primary energy sources for electricity
generation till 2015.
• Total world power generation demand(P) – 24980 TWh (2015)
• A growth from 18,920 TWh in 2006.
• Coal-fired power stations increasing their share in total generation from
40% in 2006 to 44% in 2015.
• Gas-fired generation dropping marginally from 20% to 19% in 2015, as a
result of higher prices.
• Oil use in power generation continuing to decline from 6% to 4%
• Nuclear power suffering a fall in market share from 15% to 13% in 2015.
• Conversely renewable generation (including hydro) is expected to rise
from 18% in 2006 to 20% in 2015
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16. Reasons for Continuation of Coal Use Despite Existing and
Future Policies to Mitigate Greenhouse Gas Emission
Coal is plentiful, widely distributed and likely to be available
Coal has consistently outperformed oil and gas on an equivalent-
energy basis, and despite a potential cost of carbon, coal is likely to
remain the most affordable fuel for power generation in many
developing and industrialised countries for several decades.
Coal is considered relatively affordable and has less price volatility
compared to oil and gas.
The use of indigenous reserves or the ability to access a well-
provided and affordable international market can enhance a
country’s energy security and provide affordable reliable power to
drive economies and development.
The greatest increase in the demand for coal will be in the
developing countries, especially in developing Asia, where reserves
are large and low-cost. OECD coal use is likely to grow modestly.
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17. World Coal Consumption
increases by 50 per cent
(2008- 139 Quadrillion Btu
2035 – 209 Quadrillion Btu)
As per
International
Energy
Outlook
(IEO), 2011
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18. World Coal Consumption by Region
(1980-2035)
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19. In 2008, Coal accounted for 28 per cent of world
energy consumption
60% shipped to
Electricity
Producers
World
production
of Coal in 4% shipped to
36% shipped 2008 Residential &
to Industrial Commercial
consumers Sector
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20. IEO projected that Electric
Power Sector will witness a
decline in Coal’s share of total
energy consumption for Power
Generation
From 43 per
cent in 2008
To 37 per cent
in 2010
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21. International Coal Trade Growth :
21.2 quadrillion Btu in 2009 to
35.2 quadrillion Btu in 2035.
The share of total world coal consumption
accounted for by internationally traded coal
has increased from 15 percent in 2009 to a
steady rate of 17 percent as per IEO
projection.
Stability on share of coal trade primarily
reflects the ability of the world’s largest coal
consumers, China and India, to meet
substantial portions of their future coal
demand with domestic production.
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22. COAL SHARE OF WORLD ENERGY CONSUMPTION BY SECTOR
2008, 2020 AND 2035 (PERCENT)
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23. OECD COAL CONSUMPTION BY REGION
1980, 2008, 2020 & 2035
(Quadrillion Btu)
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24. NON-OECD COAL CONSUMPTION BY REGION
1980, 2008, 2020 & 2035
(Quadrillion Btu)
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25. International Coal Price
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27. AFTER THAT THE RISE
WILL DEPEND ON
POPULATION GROWTH
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28. International Coal Prices- Past & Present
Coal Prices in USD Per Metric Ton (Approx)
Countries 2009 2010 2011 2012
Imp Exp Imp Exp Imp Exp Imp Exp
Australia -- $78.65 -- $78.8- -- $117- -- $115.14
$115 $141
China $73 -- -- -- $130 -- $120 --
India $38 -- $110 - -- $98- -- $79- --
$114 $128.5 $119
Indonesia -- $66.46 -- $75 -- $ 119.03 -- $111.58
South Africa -- -- -- $105.78 -- $106.3 -- $104.83
USA $63.91 $101.44 $71.77 $120.41 $86- $139- -- --
$112 $155.8
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29. AUSTRALIAN COAL INDEX
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30. AUSTRALIA Coal Price Change in 2011
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31. INDONESIAN COAL INDEX
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