Coal news and updates

Coal supply map recast to power Rs 6k crore saving

The government has completed the first phase of redrawing the country's coal supply map for power stations, generating annual savings of Rs 1,000 crore in transportation costs, coal secretary Anil Swarup told TOI.

The savings are estimated to rise to Rs 6,000 crore a year once the entire plan to optimize coal supply chain for power stations across the country by swapping linkages - essentially quota of a power plant from a particular mine - is completed.

In the first phase, linkages of 19 units have been swapped involving 14 million tonnes of coal. In other words, this much coal is moving lesser distance on rail since the linkages have been swapped in a way that each power station is getting fuel from a nearer source.

Due to historical legacy, most of the power stations currently get supplies from mines located far away. For example, a power plant in the western region could be getting coal from a mine in the east, while a generation unit in the east could be getting fuel from central parts that are closer to the western region.

So there may be instances when freight trains carrying fuel for these stations actually cross each other, locking up track and wagons in unproductive transportation.

Since transportation forms part of the variable cost of power tariff that is passed on to consumers, any reduction automatically brings down the cost of power for consumers.

The reduced transit time also results in improved fuel stock, which allows generation stations to run at higher capacity and make more electricity available.

There is an environmental dividend too in rationalization of coal linkages. Coal is transported in open rail wagons releasing fine particles of coal into the air. Coal companies spray water on the stock to curb this. Obviously, lesser transportation distance results in savings in terms of lesser dust and reduced water usage.

A dozen of the 19 power plants that have gone for linkage swaps have already implemented the new supply arrangement. Five more FSAs (fuel supply agreements) for swapping linkages between GSECL and MahaGenco are ready for signing and two between generation utility NTPC and SCCL are in an advanced stage of negotiations.

But the second phase of the swaps poses a technical problem since it involves imported coal. Imported coal is high on heat and low on ash, while domestic coal is just the opposite. Power stations are designed to use a particular type of coal as fuel and changes in the coal quality may affect their operations.

source: http://timesofindia.indiatimes.com