India?s largest power producer NTPC’s plan to reduce dependence on expensive imported coal by operationalising its captive coal mines this fiscal has gone awry, with the company now revising the production schedule hoping to get some fuel from its own mines sometime later in FY15.
NTPC was hoping to operationalise its Pakri-Barwadih captive coal block, which has already reached an advanced stage of development, by December with an annual production capacity of 3 million tonne (mt) per annum. However, work at the mining site, suspended since February 2012 , has failed to start even now on account of law and order issues, even though both the company and power ministry have put all their weight behind the project.
?We do not see an early resolution of the problem. The hope now is that things may move forward after the general elections if the right candidate comes to power to push the project,? said an official in the power ministry dealing with issues related to NTPC.
After numerous delays with regard to all its captive coal blocks, which also attracted the wrath of the coal ministry and the Prime Minister?s Office, NTPC expedited work and and intended to reach 3 mt per annum of coal production this fiscal from its first block. But with the fiscal coming to end, there is still no clarity on resumption of work at Pakri-Barwadih. The work has remained suspended because an organisation supported by local MLAs for project-affected persons (PAP) has damaged the mining machinery.
?We can start mining activities at Pakri Barwadih coal mine within 48 hours of receiving the requisite support from the Jharkhand government in resolving the law and order problem at the mine site. But the problem has dragged on for months and we are keeping our fingers crossed,? said an NTPC official asking not to be named.
NTPC was allotted six coal blocks (with 3 billion tonne of coal reserves) earlier and all these mines have been facing delays due to lack of statutory clearances and other land-related issues. Recently, the government allocated another four blocks with 2 billion tonne of reserves to the company. The Barwadih block was supposed to reach an annual production of 15 mt in two years. The company has assessed that all six blocks will produce about 53 mt of coal, which will cater to around 10,840 MW of NTPC?s coal-based generation capacity.
The setback in operationalising captive blocks could cost NTPC dear as the company planned to increase production from these mines by 12 mt each year to reach 40 mt over the next four years. This would have helped the company get 25% of fuel requirement through its own mines by 2017. This, officials now say, would have to be reworked owing to ground conditions.
NTPC currently needs 160 mt coal to run its coal-based capacity of about 35,000 MW. About 16 mt of this coal is imported at prices that are almost two-and-a-half times the average coal price of R1,400 per tonne offered by Coal India. As the company’s coal-based capacity is expected to rise to 52,000 MW by 2017, production from captive blocks is important to maintain a competitive edge.
For NTPC, restarting operations at the Pakri-Barwadih block will be a major breakthrough as it has been been facing law and order problems at all its blocks in Jharkhand. The public sector producer has been allocated four blocks ? Pakri Barwadih, Kerandari, Chhatti Bariatu and Chhatti Bariatu-II ? in Jharkhand to feed its power stations.
Apart from law and order issues and delays in clearances, NTPC?s captive blocks are also facing problems in getting the requisite infrastructure such as railway siding in place to evacuate coal once production starts at the mines. A power ministry official said the company would now do good if it gets even half of the 50 mt captive coal by the end of the 12th Five-Year Plan.