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Captive coal, cash reserves and customers assure NTPC success ahead

History was made by exporting 250 MW of electricity to Bangladesh and it has the option to buy 250 MW more from the open market in India, if it needs the same

National Thermal Power Corporation (NTPC) has an installed power generating capacity of 41,684 MW, for which 160 million tonnes of coal is required. Around 90% of this requirement is being obtained from Coal India Ltd and Singareni Collieries. The power generated in NTPC plants are based on coal, gas and hydro supplies. The balance 16 million tonnes of coal are imported from three main suppliers: Indonesia, Mozambique and Australia.

 

It may be recalled there were serious problems in regard to quality of coal supplied by Coal India due to dispute on caloric values, for which payments were withheld by NTPC. These issues have been fortunately resolved.

 

After resolving the quality issues, the FSAs (fuel supply agreement) have been signed between NTPC and Coal India. There were other relatively smaller problems such as delays in transporting coal from pitheads to NTPC sites, shortage of rakes etc. In any case, many of the NTPC power generating units are located close to mining centres so as to avoid these headaches.

 

As a matter of interest, it may be noted that in the case of imported coal, price of which is higher than its indigenous coal, the new and unexpected development has been the depreciating value of the rupee, resulting in higher landed cost. The dollar-rupee ratio had almost touched the psychological barrier of Rs70 before rebounding to Rs61 now.

 

In case of imported coal, however, no quality issues, such as the thermal caloric value, have been noticed, except for the negative aspect of the price due further to depreciation, as mentioned above.

 

To overcome a large number of such problems NTPC wants to investigate the prospects and develop the coal mine blocks allotted to it. It has received 10 coal blocks, six of which have a total of 53 million tonnes per annum (mtpa), and four with an estimated capacity of 45 mtpa. Work on some of these has been in progress for sometime now.

 

At the moment, however, none of these 10 captive coal blocks are operational. It will take a few more years before these become operational so as to ensure fuel security. Also, the Ministry of Environment and Forests (MoEF) has given clearance and work has begun at Talaipalli, Chatti Bariatu, Kerendari and Pakri Barwadih.

 

This will reduce the dependence on imported coal at a high price and NTPC has now  planned to set up its own coal mining units to ensure fuel security, and gradually eliminate the imports.

 

It may be recalled that NTPC did not utilise its full power generating capacity and about 5,000 MW of power generation remained idle, as the consumers were unwilling to pay higher tariff, caused by the high priced imported coal. While the capacity was idle along with adequate coal supplies on hand, some parts of the country remained starved for power.

 

Two important developments have taken place in the meanwhile. The first refers to the successful export of power to Bangladesh. History was made by exporting 250 MW of electricity to Bangladesh and it has the option to buy 250 MW more from the open market in India, if it needs the same. This power supply was followed by the signing of a contract between NTPC and the Bangladesh Power Development Board to set up a 1,320 MW thermal power unit in Khulna.

 

The second major development relates to the final touches being made to the grid work in the form of Raichur-Sholapur single circuit line (765 kV), which will interlink the

western grid to the southern grid, when it becomes operational in January 2014.

This will facilitate NTPC to ensure that the full installed capacity of its plants is used and supply of power effected to rest of the country as well.

 

NTPC's plans to add 14,038 MW capacity by 2017 are likely to be met because of its high cash reserves (Rs18,738 crore), duly supported by its captive coal blocks, which would be fully operative by then, supported by its own fully trained technical teams.

 

(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.)

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