Coal news and updates

Power minister Piyush Goyal on Wednesday approved swapping of coal between state-run generation utility NTPC and power plants operated by Gujarat government utility with a view to rationalizing railway freight and cut transportation delays. 

 

The move signals the way forward for Goyal's big-ticket plan to redraw the country's coal supply map by swapping coal supply linkages - allotment of coal supply from mines to power plants. 

 

The scheme envisages changing the allocations to mines nearer to power plants. Present linkages see coal hauled from eastern region to power plants in the west, while generation units in the east get fuel from mines in central and western regions. 

 

Besides increasing freight charge, this system also delays delivery of coal due to bottlenecks in the railway network — ranging from congestion on tracks to shortage of locomotives and wagons. 

 

Rationalizing the supply chain has the potential to save Rs 500 crore annually, Goyal had told TOI in an interview on June 25. "You will be amazed that the country has a situation where departments work in silos, so we have coal which is imported into Gujarat for a power plant in Korba, run by NTPC. And Coal India has given linkage to a power plant of the Gujarat government from Korba. The train may be crossing the line at the same time, going up and down. Rejigging this could save Rs 400-500 crore and the benefit will pass on to the consumer. It will also unclog the over burdened railway network. Help me push out more coal from the mines to its final destination." 

 

The NTPC-Gujarat swap would remove the anomaly. NTPC now imports coal at Gujarat port and wheels it all the way to Chhattisgarh to bridge shortfall. In contrast, Gujarat power plants get coal from Korea-Rewa mines of South Eastern Coalfields Ltd. 

 

But there could be a fly in the ointment. After the coal price revision in 2012, differential between the cost of higher grades and E/F grade of coal — which are normally supplied to power plants — widened significantly. As a result, utilities are reluctant to take coal from Korea-Rewa mines of SECL and Raniganj mines of Eastern Coalfields Ltd. 

 

NTPC operates two projects — Korba with a capacity of 2,600 mw and Sipat with 2,980 mw — in Chhattisgarh. Gujarat has a total installed capacity of 27,647 mw. 

 

Gujarat has been pushing for the swap for nearly a decade and the state's present energy minister Saurabh Patel had raised the issue with the power minister in June.

 

 

Source: ToI