Coal news and updates

Coal supply turns worse, 100 power plants face crisis

Industry, govt officials blame it on problems in evacuation


Coal shortage at India’s thermal power plants deteriorated further this week, with the number of units with less than seven days’ coal stock rising to 56.

The central electricity authority said 100 thermal power plants had enough coal overall to last just six days as of September 1.

The stock levels were the lowest since mid-2012, when the nation witnessed one of the world’s worst blackouts.

Industry experts and government officials said problems in coal evacuation from the fields led to this situation. The coalfields still have sufficient coal to meet the requirement, they claimed.

Officials at Tata Power, Reliance Power and L&T Power — three of the major private power producers – did not respond to calls seeking comment for this report.

According to a senior industry official, who did not want to be named or his company identified, coal companies have sufficient coal with them (at the coal fields) but there is not enough inventory at the po­wer generation un­its, since the infrastructu­re to evacuate the same is insufficient.

“We need a strong infrastructure of rail links along with policy support on four major issues – forest clearance, environment clearance, land acquisition and rehabilitation and resettlement of displaced people. These issues have held up efforts to increase production,” he said.

The government’s land bill has failed to address these issues, and resettlement and rehabilitation remain a major challenge to land acquisition for expansion of coal blocks. “A drastic change in policies is needed for both the existing mines and also for awarding new blocks,” the official said.

Former power secretary Anil Razdan cited two immediate reasons for the crisis; first, it’s a drought year for a number of states, leading to higher power consumption for irrigation and lower output at the hydro-power plants.

“Thermal power plants have to go for annual maintenance, which they have not done, thus overstretching themselves in Punjab, Haryana and western Uttar Pradesh. Simultaneously, coal production and dispatches have gone down at the coal fields due to monsoon rains and also due to lack of critical infrastructure like rail links.”

There has been good rainfall in north India over the past four days, which may reduce power consumption. “Going ahead, the growth of the industry will depend on energy conservation and creating a multi-dimensional mode to take care of production, usage and right pricing. Power tariff has to take into account the cost of production along with excise and other duty benefits for production of star-graded products that improved energy efficiency,” Razdan said.

However, Salil Garg, director of corporate at India Ratings, said having inventory for less than seven days was not a serious problem.

“As long as it is not a zero-day inventory, it can be replenished. In our discussions with power generation companies in the past, they have told us that even two days’ inventory is not a problem since the rakes are expected to arrive within the said timeline. This time, the drought-like situation in a few areas and lower production from Coal India due to monsoon rains have impacted the overall situation. This kind of situations have emerged in the past as well. The only way out is to award more coal blocks for commercial development and improve the overall output,” he said.

Industry experts believe the coal shortage can be resolved only through an emphasis on evacuation through rail links and dedicated freight corridors. An additional 100-150 million tonnes can be added to existing supplies with the help of new rail links.

Source: www.mydigitalfc.com