Based on an illuminating public discussion conducted by Moneylife Foundation with AK...
As many as 61 thermal power stations out of 103 are grappling with critical coal shortage with less than a week’s stock at their disposal. Even NTPC, the country’s largest thermal power producer is battling with 0-1 day of stocks at some of its plants
Fuel stockpiles at all the thermal power stations across the country hit a new low in 25 years at 7.2 million tonnes, as Coal India and its subsidiaries failed to meet their production targets, say official data.
According to latest data, released by the Central Electricity Authority (CEA), total fuel stocks at 103 coal-based stations have come down to 7.2 million tonnes.
This 7.2 million tonnes comprise 6.58 million tonnes of indigenous coal and 706 tonnes of imported fuel.
“This is the lowest in 25 years. The last time it hit a low was in 2010 when it was 7.8 million tonnes,” an official in the Ministry of Power said.
“Coal India’s production is not in line with the demand of the power sector and its subsidiaries Northern Coalfields Ltd (NCL) and Central Coalfields Ltd (CCL) are not producing coal as per their respective targets,” the official said when asked about the reason for low stock piles.
As many as 61 thermal power stations are grappling with critical coal shortage with less than a week’s stock at their disposal. The country’s largest thermal power producer NTPC is battling with 0-1 day of stocks at some of its plants.
The company’s generating stations with nil stocks include Indira Gandhi thermal plant in Haryana, Rihand, Singrauli and Tanda in Uttar Pradesh and Vindhayachal in Madhya Pradesh, CEA data said.
According to the official, NTPC is generating lesser than full capacity at some of these power plants.
Of the 61 plants with less than seven days of fuel stocks left, 36 stations are reeling under acute shortage with less than four days of stockpiles at their disposal.
Asked when the situation will improve, the official said that it could be in a couple of weeks because of improvement in weather. The power demand will come down as winters are approaching and this will reduce the impact of low stocks.
He added that the real solution lay with the Coal India which will have to meet its production targets and increase its capacity.
CEA, the techno-economic clearance body under the Ministry of Power, is also engaged in setting generation targets and other milestones for the power utilities.
Prequalified bidders, practically all of them, withdrew and left the field open for only NTPC to secure these contracts for setting up ultra-mega power plants in Odisha and Tamil Nadu
From the press reports, it is now certain that the two 2x4,000 MW ultra-mega power plants (UMPPs), to be located in Odisha and Tamil Nadu, will now be further delayed, simply because the prequalified bidders, practically all of them, withdrew and left the field open for only NTPC to secure these contracts.
It may be recalled that apart from NTPC, others in the race, which were prequalified, for the Odisha UMPP were NHPC, Tatas, Adani, JSW Energy, Jindal Power, Sterlite, CLP and Larsen & Toubro.
For the Cheyyur project, also 4,000 MW, in addition to NTPC, others who were prequalified, included Adani, CLP, GMR, Jindal, JSW Energy, Sterlite and Larsen & Toubro (L&T).
In order to facilitate the work and based on past experience, the government revised the existing standard bidding forms a year ago, and preliminary bids were invited. While revising the bidding forms, the government it seems, took care to make a provision that, in case of any increase in fuel costs, this could be passed on to the consumer as "higher tariff".
However, it would appear that the fly in the ointment was the provision that the successful bidder had to source the equipment from domestic manufacturers.
But it is an entirely different story that the domestic manufacturers have protracted delays in supplies and more expensive than imported counterparts; most of which, in any case, in recent times, have come from China which have been found to be "inferior". In fact, to protect the indigenous suppliers, the import duty element was also revised upwards.
In the case of Cheyyur Plant in Tamil Nadu, the entire project was to be based on the assumption that the entire coal requirement would be imported, while, in the case of Odisha, it was designed to source its own coal from captive coal blocks allotted for this purpose.
There was also the issue of inordinate delays associated with the forest and other clearances in such projects, particularly, in case of coal blocks. In a strategic move, MoEF had decided that the go-ahead for power stations of such projects will no longer be linked to clearance of their captive blocks.
For the UMPP at Bedabahal in Odisha, Ministry of Coal had allocated three coal blocks, viz, Meenakshi, Meenakshi B and dip side of Meenakshi. These were in fact allocated in September 2006. In the changed circumstances, where there is only one bidder, NTPC, we do not know what steps the government may propose to take so that these two projects do not get delayed further.
At the same time, it is necessary for the Power Minister to have an open discussion with the prequalified bidders as to what made them withdraw their interest in bidding.
So far, three UMPPs are with Reliance, partly operational and only one with Tatas at Mundhra, Gujarat, which is fully functional.
Urgent steps are needed to settle this matter.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)