Plantbee Blog | Industry News

Stocks pile up with Coal India as 15 power plants didn't lift fuel

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As many as 15 power plants did not lift any coal from Coal India in September, foregoing the 2.6 million tonnes of stock they were supposed to lift from the state-run monopoly miner and resulting in thermal power plants across the country receiving delivery of only 80% of the coal allotted to them during the month.

This in turn reduced stocks at various power plants, specially the ones near coal mines. A number of them did not lift their full quota of coal despite stocks falling down to five days, or critical stock position, according to Central Electricity Authority’s definition.

Plants in Gujarat, Rajasthan, Madhya Pradesh, Haryana and Punjab have not been lifting their full quota for several months in a row although their stocks have dwindled to five days in some cases.

Coal IndiaBSE 3.93 % officials said power producers, both near and away from coal mines, are not lifting their full quota of coal each month because they are now assured of railway rakes and coal availability whenever required, unlike in the past when availability of both were uncertain for major part of the year. “While coal can be available on credit from Coal India, power producers need to pay upfront to the railways.

With assured supply of coal whenever required, power producers are not interested in blocking their money by way of stocking large volumes of coal as stipulated by the Central Electricity Authority,” a senior coal ministry official said.

At the time when coal and rakes were not available freely, the Central Electricity Authority had stipulated that all power stations stock coal that would support generation for 15 days in a row. ‘Critical’ and ‘super critical’ stocks were also defined at that time.

As per the definition a pit head plant would be marked with critical stock position if its stocks fell below five days and less than three days would be super critical. For non-pit head plants, critical stocks would be less than seven days and super critical would be less than four days.

Source: economictimes.indiatimes.com

Telangana set to build power plants against Centre's advice

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Telangana, which had proposed to aggressively add power generation capacities towards self-sufficiency, has turned down the advice of Union power ministry against new capacities and is now determined to go ahead with imported coal-fired and inefficient sub critical thermal plants.

The state has a capacity of 4,365 MW and has proposed to achieve 25,000 MW by the end of 2018, which includes fresh thermal power generation capacity of 4,000 MW that the Union government promise under the AP State Reorganisation Act, 2014.

Besides entering into a contentious power purchase agreement (PPA) with the Chhattisgarh government to procure 1,000 MW of power for 12 years, Telangana has awarded contracts for a 1,080 MW project at Manugur in Khammam district and a 4,000 MW plant at Damaracherla in Nalgonda district. Both are coal-fired thermal power projects, each depending on imported coal for at least half of its fuel requirement.

The plant at Manugur also relies on subcritical equipment of 280 MW each, which environmentalists say will add to pollution while activists say its expensive operations and maintenance costs will be a burden on the exchequer.

Union power minister Piyush Goyal recently asked Telangana Chief Minister K Chandrasekhar Rao to either downsize or drop the state's proposed power plants, given the surplus power capacities and cheaper availability in the domestic market.

Goyal on Wednesday repeated his advice to the Telangana government while assuring that state-run thermal power generator NTPC was ready to set up the projects promised under the Act.

Of the promised 4,000 MW, NTPC is setting up two units of 800 MW each at Ramagundam and is in talks with the Telangana government for the required land to set up the remaining capacities.

But Telangana power and industries secretary Arvind Kumar said the state was neither in favour of trimming down capacities nor dropping the projects.

"Keeping in view the projected increase in power consumption by the proposed industrial corridors, the proposed large lift irrigation projects and anticipated increase in agricultural consumption under these irrigation projects, the Telangana government has decided to go ahead with its power capacity additions," he told ET.

"Aimed at uninterrupted power supply for agriculture, industry and domestic consumption, Telangana wants to rely on own and cheaper power generation resources." However, civil society groups and power consumer forums are crying foul over the alleged arbitrary decisions of the state government on selection of power generation technologies and contractors for new power plants.

They have also criticised the PPAs, saying the government has signed them at high costs. They had also challenged these decisions before the state electricity regulatory commission.

They point out that the government was not taking advantage of the coal mines in the state for new projects. Though the project at Manugur is a pit-head project, it is using subcritical technology and is also 50 per cent dependent on imported coal, while Damaracherla plant is far away from coal mines, they said.

"Given serious rethinking going on across the globe towards adding alternative and sustainable power generation capacities and also given the availability of cheaper electricity, the Telangana government should have a fresh look at its power strategy," said M Kodandaram, chairman of Telangana Joint Action Committee, an umbrella body of dozens of civil society groups.

M Thimma Reddy, convenor of People's Monitoring Group on Electricity Regulation, accused the Telangana government of resorting to imprudent strategies to address the power deficits.

Pointing out that Telangana's strategy on capacity additions was not matching its power consumption patterns, he said that the power consumption by the agriculture sector in the newly-formed state over the past two years crashed owing to back-to-back droughts and a steep fall in groundwater levels.

"The government went ahead with awarding contracts of power plants without adopting the open competitive bidding route and entered into PPAs with various private and public entities without calling for competitive bids, thereby losing on the advantage of procuring power at low tariffs," said Reddy. "Instead of lowering power purchases from private players when the demand fell significantly during droughts, Telangana had resorted to backing down (lowering plant load factor) at own power generation stations, thereby adversely affecting the finances of state-owned power utilities and burdening the power consumers with high-cost power."

Source: economictimes

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