Coal India may limit supply to power plants with large stock

30th july 2018

State-owned Coal India is exploring the possibility of restricting fuel supplies to power plants saddled with large stocks but operating at low capacity utilisation. The plan is to divert supplies from these plants to the ones running at higher capacity but faced with low stocks, a Coal India executive said.

“If practised, it will ensure equitable distribution of coal in the country, reduce congestion on railway tracks, and the issue of coal scarcity can be solved in a month. However, the power ministry has to take a call on the issue along with state and central generating companies,” the executive said.

At present, 117-odd power plants in the country have a supply agreement with Coal India. These plants have a cumulative stock of 15.36 million tonnes which is good enough for generating power for 10 days, and ideally no plant should be facing critical stock positions. Yet, 18 plants are running with critically low fuel stocks, and some with stocks that aren’t even enough for generating power for a full day.

In contrast, 16 power stations have stocks beyond their normal levels, varying between 16 and 58 days of usage levels. An analysis reveals that these plants, holding high levels of stocks, operated at low capacity utilization, anywhere between 32% and 75% in June this year.

Coal India executives’ are blaming the coal scarcity situation on skewed coal distribution, resulting in many power stations to face critical coal stocks while others have more than they require.

These 16 power stations are saddled with five million tonnes of extra coal than their seven days consumption requirement, whereas just less than a million tonne of coal stock is required to be built up at the 18 critical power stations to bring them out of criticality.

A power company is free to divert coal from one of its plants to another provided the total receipt of coal remains the same. Generating companies such as NTPC and state generators can avail of the facility.

“Along with diversion of coal, pit head plants operating at low utilisation levels can also be asked by the power ministry to jack up generation since transporting power is easier than transporting coal,” the executive said.

Citing an example, he said, NTPC’s thermal stations at Korba and Sipat are running at 95% capacity while power stations at Vindhyachal, Rihand and Singrauli are running at less than 90% utilisation yet they have adequate stocks. Tweaking generation plan in favour of the ones that have large stocks can also help solve the issue.

“We can supply additional coal through dedicated tracks or conveyors to pit head plants if they generate additional power while the ones far off can be asked to scale down generation. It will free up railways’ capacity too,” the Coal India executive said.

In fact, all power stations holding more than normal stocks are either central or state government entities, and the thrust to increase generation from these plants is likely to reduce pressure on plants that are facing critical stocks.

An NTPC executive, however, said we need to take into account power transmission capability of the gird at each of these stations. There are pockets of grid congestion which may act against the plan.

Source: THE ECONOMIC TIMES