Coal news and updates

Successful third-party sampling likely to reduce import of coal

After third-party sampling of coal led to delivery of better quality dry fuel and, consequently, to enhanced power generation, the state electricity generation utility is planning to reduce its imports of coal from other countries. This reduction in costly coal imports will lead to a marginal fall in power tariffs for consumers in Maharashtra.

"Third-party sampling of coal has led to better quality coal being delivered. This rise in the gross calorific value (GCV) of coal has led to better generation efficiencies. Hence, we are planning to reduce our use of costly imported coal," a senior MahaGenco official told dna.
He added that the imported coal was used as a "sweetener" to fire two generating sets — a 210MW unit in Nashik and a 500MW plant in Bhusawal. MahaGenco imports coal from Australia and Indonesia.

 "This reduction in imports will lead to tariffs coming down... also, an increase in GCV due to delivery of better grade coal will lead to consumption of coal coming down, thus holding a positive tariff impact," the official said.
MahaGenco is planning to import 2.7MMT imported coal this year. While it has about 46MMT coal linkage, it gets around 35MMT (around 76%) realisation. It also meets some of its demand through e-auctions and imports.

While imported coal has a GCV of 5,000 to 7,000, local coal lags behind at just 3,000 to 3,500. However, while domestic coal cost just around Rs2,607.98 per ton in 2013-14 and Rs2,723.17 in 2014-15, imported coal is much costlier at an average of Rs5,189.99 in 2013-14 and Rs6,221.53 in 2014-15.
"Though imported coal is costly, we were using it for its quality and quantity," said another MahaGenco official, adding that while local coal cost around 0.60 to 0.80 per GCV, imported coal cost double at Rs1.2 per GCV.

He added that after the union ministry of coal allowed third-party sampling by agencies at the loading end to assess the quality of coal supplied by the subsidiaries of the coal sector behemoth Coal India Limited, coal quality had improved by around two grades.
"Earlier, coal quality was down by around four to five grades... however, despite the improvement in quality, further improvement by around two grades is still essential," the official said.

Poor quality of coal affects generation as lower quality coal has a lower GCV, which leads to boilers of thermal power plants operating at lower efficiency and generating lesser steam, affecting power generation.
The official added that the realisation of coal had improved over the last few years due to enhanced production. For instance, in 2013-14, just 68.9% of the coal quantity contracted for had been delivered.

"As the quality and quantity of coal supplied to us by the public sector coal mining companies improve, we will be able to reduce our imports... this will lead to tariffs consequently coming down," he explained.
Third-party sampling will also help save costs. The price of coal is based on its grade and a slip-up in quality, which will be detected by third-party sampling, will lead to difference in prices being adjusted in subsequent bills, he said, adding that the measure will save the utility around Rs500 crore annually.

source: http://www.dnaindia.com