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Weak monsoon, coal crunch hit power production

In Delhi alone, power demand touched a historic high of 5,925 Mw on Tuesday. This was two-and-a-half times the demand in Bihar (2,750 Mw)

With NTPC, India's largest thermal power producer, pressing the panic button on increasing power demand and dwindling coal supply, Coal India (CIL) has diverted half of its coal production for e-auctioning to thermal power producers.

"After the minister (Piyush Goyal, minister for coal, power and renewable energy) directed us to increase the coal supply to the thermal power plants, we have taken several steps. One being reducing the amount of coal to be sold through e-auction to 26 million tonnes from the usual 52 million tonnes, to be made available for coal-based power plants," said a senior CIL official.

Goyal had last week asked the coal producer to improve the quality of coal supplied to thermal power producers. He had also asked them to increase the quantum of the fuel being supplied.

Owing to weak rainfall during the ongoing monsoon season, there are apprehensions about the production of hydro-power plants. The power demand, as NTPC officials said, is on an upswing due to elongated summers and deficient rainfall.

Last month, the total power demand of the country was 142,647 Mw, of which 137,352 Mw was met. There was also a peak power deficit of 3.7 per cent during the same period. In Delhi alone, power demand touched a historic high of 5,925 Mw on Tuesday. This was two-and-a-half times the demand in Bihar (2,750 Mw).

"From mid-June to September, our power demand falls by at least 20 per cent as monsoon sets in and hydel units start ramping up their production. This year, however, the demand hasn't come down," said a senior executive at NTPC.

He said this is partly because of deficient monsoon and partly because of the issues being faced by subsidiaries of Coal India at several locations. "There is equipment breakdown at units of MCL (Mahanadi Coalfields), and then there are contractual issues in SECL (South Eastern Coalfields) while mines in Odisha are facing civil anarchy. All this led to apprehensions regarding coal supply not meeting the requirements," said the NTPC official quoted above.

According to CIL sources, supply of coal to thermal power units during April-June 2014 was 88.66 million tonnes against the annual action plan target of 101.61 million tonnes.

In a letter to the power ministry, NTPC said six of its power plants had reached a critical level of coal stock. These are Rihand, Vindhyachal, Sipat, Simhadri, Ramagundam and Singrauli with a combined capacity of 16, 840 Mw.

The official said the NTPC stations facing problems are near the pit-head of mines, which makes it difficult to transport imported coal there.

With 2014 being forecast as an El Niño year, rainfall during the monsoon period (June to September) would be below normal, according to the long range forecast of India Meteorological Department. El Niño is a weather phenomenon that reduces monsoon rains.

Meanwhile, NHPC has said its production would be almost similar to last year's. Compared to 2,576 million units produced in June 2013, NHPC produced 2,941 million units in June this year.

"We are meeting our quarterly targets. There is no panic from our end," said an NHPC official who did not want to be named.

Among the private players, Reliance Power with a capacity of close to 4,525 Mw denied facing any coal-supply issue, a statement echoed by another major private player, which is into coal-based power production.

During 2014-15, against the domestic coal requirement of 527 million tonnes, the availability of domestic coal is 473 million tonnes, leaving a shortfall of 54 million tonnes.

Source: Business Standard