Post-monsoon coal supply may trip power plants facing 175K-Mw daily demand

The power ministry has allowed all power producers to import coal as the domestic supply situation remains poor

As the monsoon comes to a close, coal-based power generators fear that the coal supply situation will be a repeat of last year's. In a month, hydropower generation will go down and pressure will mount on thermal power plants to meet the daily power demand of around 175,000 Mw.    

The average coal supply currently stands below optimal at 10 days on an average. In September last year, the coal supply at thermal stations was average 10 days, while the peak power demand was 160,000 Mw.

It is not that the power demand has grown suddenly since the six per cent annual growth is steady. India's national and largest thermal power producer, NTPC, has decided to import coal in the wake of unreliability in coal supply over the past two years. R K Singh, minister of state for power and new & renewable energy, recently said his ministry has allowed all power producers to import coal as the domestic situation would remain poor.  

In two tenders issued by the company, it has called for bids to supply 2.5 million tonnes of imported coal for its various plants situated across the country. NTPC had used imported coal last in 2013-14. Senior company officials said the current coal supply is mismatched to demand. "While some of the non-pithead (away from mines) plants have more than 25 days of coal, some of the pithead plants are struggling for optimal coal supply," said an executive requesting anonymity. 

NTPC is increasingly trying to move towards self-reliance. While a major chunk of its coal would continue to come from Coal India, it plans to increase its captive coal production. NTPC has a total of eight coal blocks -- Pakri-Barwadih, Chatti-Bariatu & Chatti-Bariatu (South), Kerandari, Dulanga, Talaipalli, Banai, Bhalumunda and Mandakini-B -- allotted to it. Of these, Pakri-Barwadih is operational and Talaipalli will become operational during the current financial year. 

NTPC plans to create a separate company to operate and manage its coal mines. "This subsidiary would function like any other coal company. If we have surplus coal, we will sell it too. We might also list it in the coming future," said an executive.

It also plans to set up conveyor belts at power plants to reduce its dependence on railway rakes. NTPC is setting up a 1,980-Mw power plant at North Karanpura, Jharkhand, and will install a pipe conveyor for the transportation of coal from Magadh coal mines of Central Coalfields Limited. Built at the cost of Rs 5.5 billion, the pipe conveyor is completely covered, thereby reducing coal transport losses and ensuring minimal ecological disturbances. It already has a pipe conveyor at Vellur to transport coal from the Ennore port to its power plants in that area.  

Last year, the number of railway rakes to the power sector reduced to 213 rakes per day in September. The power sector typically demands 288 rakes per day to supply 615 million tonnes of coal.

At the same time, private power producers are crying foul over coal supply. While they have alleged that the government is giving preferential supply to state-owned plants, they have also requested the government to look into flawed supply to the private sector.

In a representation to the power ministry, the private players said the price of coal offered under special forward e-auction (SFEA) by Coal India to privately-owned power generators has shot up, with the quantity reducing during the past two quarters. SFEA was started in 2016 to make available more coal in the open market for privately-run plants that don't have a long-term fuel supply agreement with Coal India.     

Thirty-one million tonnes was offered under SFEA in November 2017 but the quantity dropped to 3.5 million tonnes during May 2018. There was no coal offered during June 2018 -- the last available data on the coal ministry's website.
 

The power ministry has asked all thermal power producers to import coal to build the stock of coal if the domestic supply is not enough. "It is observed that during 2018-19, the coal stock at power plants has depleted to 15.3 million tonnes (in June 2018), which is sufficient to run the plants for an average of nine days," said a letter dated July 4, 2018, reviewed by this paper.

A decision was taken after a meeting in the ministry of power to make an assessment for import of coal by the power plants during the remaining part of 2018-19 for maintaining the normative coal stock at all power plants. 

Ironically, the price of imported coal has touched $110 per tonne, which is a five-year high. The normative import price for Indian power plants ranges between $45-60 per tonne. The assessment report is yet to be out.

The coal ministry, however, continues to maintain that the coal situation has improved. "Coal India Limited has dispatched 40.07 million tonnes (MT) of coal to power plants in the month of April 2018, which is an increase of about 14 per cent over the dispatch of 35.16 MT in April 2017. The coal stock at the thermal power plants has increased from a level of 7.3 MT on 19.10.2017 to 15.89 MT as on 30.04.2018," Piyush Goyal said in a written reply to a Rajya Sabha question on July 20.