New Delhi: The nation’s largest power producer, state-run NTPC Ltd, is facing acute shortage of coal at its 1,000MW Simhadri project in coastal Andhra Pradesh. The plant has coal stock to generate power only for the next four days, a company official said.
The project has two units of 500MW capacity, of which one is closed temporarily for maintenance. “Had the plant’s other 500MW unit been operational, the stock would have been sufficient to support only two days of generation,” he said, asking not to be named.
As per norms, a power plant that is dependent on coal linkage such as the Simhadri project should have a minimum coal stock to support production for 25 days.
Crippling power: NTPC’s Singrauli super thermal power station at Shaktinagar, Uttar Pradesh. Shortage of coal, the fuel for most NTPC plants, at the Simhadri project is part of the larger problem that it is facing. Photograph: Harikrishna Katragadda / Mint
“We are monitoring the issue on a day-to-day basis with the Indian Railways (which transports the fuel from coal mines to the plant) and the coal ministry. We expect the situation to only improve by November this year,” he said.
Shortage of coal, the fuel for most of NTPC’s power plants, at the Simhadri project is part of the larger problem that the company is facing.
Some coal suppliers are reneging on their commitments because they have not commenced production—in some cases because their coal mines haven’t received environmental clearances. Procedural and infrastructure delays have already upset the captive coal mining plans of NTPC, as reported by Mint on 11 October.
R.S. Sharma, NTPC’s chairman and managing director, has already sought the Union power ministry’s help in meeting the coal demand.
NTPC has a total coal requirement of 125 million tonnes (mt) per annum and plans to meet the unmet demand by importing 8mt in the current fiscal year.
Simhadri project is NTPC’s first coal-based project from which the entire production is supplied to the home state (Andhra Pradesh). The fuel situation at the project is expected to worsen with the additional 1,000MW capacity coming online as part of its expansion by 2011.
Andhra Pradesh has a power requirement of 7,500MW and buys 1,500MW from other states to meet its growing electricity demand.
India has 256 billion tonnes of coal reserves of which around 455mt is mined a year.
Coal shortages have become a cause of worry as they might impact the Indian economy, which grew by 9.6% last fiscal year and is expected to grow at more than 8% this fiscal year.
According to the government’s Economic Survey 2007-08, coal production has decelerated from a high of 6.2% in 2005-06 (April-December) to 4.9% in the corresponding period in 2007-08.
The Indian power sector has a current annual coal demand of around 390mt.
“Shortage in coal stocks at power projects is likely to get worse if the coal production and transportation planning are not effectively managed,” said Dipesh Dipu, principal mining consultant with audit and consulting firm PricewaterhouseCoopers. “New project implementations in coal mining have suffered substantial delays and have led to demand and supply mismatch.”
According to Dipu, the high costs of imported coal have also enhanced the demand for domestic coal by altering the economics of power generation. “Also, the capacity constraints in transportation, added with seasonal disruptions, have led to critical levels of coal inventories at power projects,” he added.