New Delhi: The Orissa government has delayed water linkage to NTPC Ltd’s captive coal mining project at Talaipalli fearing protests from farmers in another demonstration of growing conflicts between companies, governments, and farmers over scarce resources.
The delay comes even as NTPC struggles to start production at the first captive coal blocks allotted to it at Pakhri Barwadih in Jharkhand because of procedural issues as reported by Mint on 11 October. Production at this block was expected to have begun in December.
“With the water clearance pending, we can’t go ahead. We are pursuing the matter with the state government, but there has been a delay due to pressure from the farmers,” said a senior NTPC executive, on condition of anonymity.
“There was a law and order problem in the Hirakund dam area last year on the water issue. We are trying to resolve the issue at the earliest,” said Suresh Mahapatra, Orissa’s energy secretary. The dam on the Mahanadi river in Orissa is the largest in the country.
State-owned NTPC, India’s largest power generator, has been allocated eight captive coal blocks by the government.
The problems it has faced at two blocks had led power sector analysts to fear changes in the company’s plans to achieve fuel security and reduce dependence on state-owned Coal India Ltd (CIL).
“With developments like these, not only the procedural delays, but also the social context of mining may need to be redefined. Delay in land acquisition authorization to NTPC is certain to disrupt the strategic plans for the power utility to secure coal supplies from captive mines,” said Dipesh Dipu, a manager with audit and consulting firm PricewaterhouseCoopers.
NTPC’s efforts to mine for coal from captive blocks was part of its effort to ensure a stable fuel source for its power plants. This would have also cushioned it against sudden spikes in the price of coal.
Coal is critical for NTPC as more than 80% of its installed capacity of 29,144MW is coal-based. NTPC currently requires 122.94 million tonnes per annum (mtpa) of coal, and it expects this to grow further as a substantial portion of the capacity it is adding will be based on coal. In order to meet this requirement, NTPC plans to double its imports of coal to 5mtpa in the current year and will soon float a global tender for the same. The rest of its coal requirements are met through supplies by CIL. The company plans to add 22,430MW of capacity by 2012.
NTPC plans to invest about Rs10,000 crore to produce 50mt of coal annually from its captive blocks by 2013. The company expects coal from these captive blocks to be 20% cheaper than what it pays CIL.
With around 67% of the total power generation currently based on coal, the power sector is the major consumer of coal in the country, absorbing nearly 78% of the country’s total coal production.