Heat over coal shortage
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12/07/2008
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Business India (Mumbai)
It is difficult not to miss the irony. At a time when the upa government appears to be straining its nerve to push the India-US nuclear co-operation agreement, on the ground that it would help in augmenting the country's energy requirements, there appears to be a total lack of inter-ministerial co-ordination in smoothening the procedures for enhanced power generation through the traditional resource of coal. This has led ntpc, India's largest producer of coal-based power, to cry foul.
For some time now, a blame game has been going on between the Union power and coal ministries over the latter's policy of rationing out access to coal blocks and its inability to ensure regular supplies. In fact, the coal ministry had told its power counterpart to tell its psus to import coal to meet their requirements. This has peeved the power ministry, which feels it could crimp the plans to produce as much electricity in the country as possible. The country has an installed power generation capacity of 141,080 mw and plans to add 78,577 mw by 2012. Of this, some 46,600 mw will come from coal-based projects.
The latest saga in the face-off is ntpc's complaint that the coal ministry is holding up supplies to its various plants. Around 67 per cent of India's electricity production is based on coal. The power sector currently needs around 390 mtpa of the fuel. Though 78 per cent of the coal produced in the country is used to generate power, projected supply invariably falls short of demand.
ntpc has told the coal ministry that the dwindling trend of supplies and critical stock level at its various power stations has been affecting generation. The coal ministry has, in response, told the power psu major that in case of any shortages, it should
supplement additional requirement through imports. In a bid to turn the tables on the power psu, the coal ministry has slammed its tardy progress of exploiting the eight dedicated mines allotted to it. The coal ministry has also called for close monitoring of ntpc's efforts in this direction. ntpc says that delays in land acquisition and lack of infrastructure facilities have come in the way of achieving fuel security and reducing dependence on Coal India Ltd, leading to shifting of timelines for preparatory works for mine development, appointment of coal mining contractor, construction of mine and eventual production. This was particularly true of the Pakhri Barwadih mines in Jharkhand, touted as one of the largest mines in India. To make matters worse, the Railways has expressed its inability to provide a link before the end of this year.
As for imports, ntpc says this is easier said than done. Nearly one-third of the country's power stations are facing 'critical stocks', a position where stocks last barely seven days. (Thermal stations ate normally known to hold stocks for 15 days.) The import option is getting tougher as China, with low domestic reserves and power shortages, has stepped up international purchases. This has led to a rise in the global spot prices of coal. The price of South African and Australian coal is ruling at an all-time high.
Heavy demand
Ministry officials say that, while coal companies are committed to meet the normative requirements of ntpc plants, the psu should have made 'some' efforts to augment its requirement through imports, which it did not at all during the months of April and May. The ministry also wanted ntpc, which has 15 coal-fired stations, to expedite its production plan from captive mines to augment overall availability of coal for its plants. The charge of coal ministry is currently being held by the Prime Minister and those familiar with the developments say that power minister Sushil Kumar Shinde has not yet taken up ntpc's case with him.
In peak summer, there is heavy demand on ntpc's power stations to meet the grid demands. However, coal supplies off-late have shown a declining trend, as a result of which stocks at various stations have fallen in critical and super critical category. Officials say that the main reason for low supplies to ntpc's Farakka and Kahalgaon plants was the consistent break-down of the coal handling system at Rajmahal and non-operation of both the silos simultaneously. This was leading to low off-take, despite the fact that sufficient pithead stocks were available at the mine end. In case of the Ramagundam plant, the station has been operating with one-day stock level due to diminished supplies. The station has even been forced to regulate generation, based on day-to-day supplies.