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Power projects in coastal areas to drive jetty construction

Power projects in coastal areas to drive jetty construction
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First Published: Thu, Feb 14 2008. 12 27 AM IST
Updated: Thu, Feb 14 2008. 12 27 AM IST
The increase in the number of power projects based on imported coal will result in a corresponding rise in the construction of jetties required to unload the coal, which will be shipped in from countries such as Indonesia and Australia.
“Of the 78,577MW (of power generation capacity) that we plan to add by 2012, around 4,000MW will be from imported coal-based projects on the coasts. This will require construction of captive jetties to make coal offtake economical and easier,” said a senior power ministry official who did not wish to be identified.
The jetties are seen by some analysts as a cost-effective alternative to ports. Companies building such jetties currently include Dubai’s ETA Star Group, Coal and Oil Group Llc. and Aarkey International.
Although 78% of India’s coal production is dedicated to power generation, demand for the fuel still exceeds supplies, making imports imperative. The power sector, excluding the planned ultra mega power projects, will likely need 545 million tonnes (mt) of coal by 2012, compared with domestic coal supplies of around 482mt.
The easiest and least expensive way of getting this coal to India is by ship. Around 95% of India’s trade by volume and 70% in terms of value is transported by sea.
“This captive jetty model is bound to work, given the lack of port infrastructure in the country. Having a captive jetty makes operation much easier as the ports are choking. This is the need of the hour. We are planning to construct a jetty near our proposed 1200MW project in Tamil Nadu,” said M. Tariq Raza, resident director of ETA Star India Projects Pvt. Ltd, the group’s Indian subsidiary.
The company’s jetty will have a capacity of six million tonnes per annum (mtpa) and will involve an investment of around Rs50 crore.
“An imported coal based power project having a generation capacity of more than 1,000MW ideally needs a dedicated jetty” said Y. Harish Chandra Prasad, chairman, Malaxmi Infra Ventures (India) Pvt. Ltd, which is setting up a 540MW coastal thermal power project through its group firm Simhapuri Energy Pvt. Ltd and in association with another Hyderabad-based infrastructure firm, Madhucon Projects Ltd.
“More jetties will start being constructed as companies, which are looking at importing coal from Indonesia and Africa, start bringing in the coal. If they do not have a port location, they will set up a jetty. Having a jetty will help them in controlling the user charges, which might not be the case with ports,” said Arvind Mahajan, executive director at audit firm KPMG.
Even NTPC Ltd, India’s largest electricity generation company, plans to set up power projects based on imported coal along the country’s coast, for which it will construct dedicated jetties.
Imported coal typically has a higher calorific value, which reduces wastage and also improves the efficiency of power plants. Analysts estimate that one tonne of imported coal is equivalent to 1.56 tonnes of domestic coal.
India’s coal imports, currently estimated at 20mtpa, are expected to double in the next five years as more thermal power projects become operational.
Prices of imported coal—including freight—average around 90 per tonne.
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First Published: Thu, Feb 14 2008. 12 27 AM IST
More Topics: Power Project | Construction | Ports | Sea Route | Coal |