The power ministry has laid out a plan to use more imported coal in the sector. The move is expected to fill in the demand-supply gap of domestic coal, bound to widen in the coming years.
In view of the government?s capacity addition programme, the power sector?s coal requirement would shoot up by at least 20-25% in the next 3-4 years, and it would be impossible for Coal India (CIL) to match that requirement, a power ministry official told FE. Running power plants with imported coal is the only way out, he points out, but admits that there are technical hurdles.
Boilers of Indian power plants are designed in such a way that that can either function with fully domestic coal or imported coal, blended with domestic coal at 15:85 ratio. So, even if a power producer is capable of importing coal at international rates, its boiler design would not permit it to do so and the pressure remains on CIL to meet the power sector?s demand.
Union power secretary P Umashankar said the ministry was looking at various options to facilitate more use of imported coal but nothing has been finalised as yet.
?Much of the country?s (power) capacity addition programme depends on the availability of coal and its supply has to be ensured on a long-term basis,? Umashankar said. The supply of domestic coal to the power sector in 2010-2011 is expected to fall short by 46 million tonne, which is likely to widen up to 100 mt in 2011-2012. Sources in the power ministry said while demand of coal in 2010-2011 had been estimated to be 512 mt, domestic supply would not exceed 410-412 mt. This gap can?t be met by imported coal since Indian boilers are not designed for it, according to the official.
The ministry has drawn up a strategy in which it would ask NTPC to examine whether the boilers of its existing power plants can be re-engineered. NTPC should check whether the boilers can run using a blend containing higher amount of coking coal. It should also examine whether some plants—being set up under the ministry?s capacity addition programme—can be designed to completely run on imported coal. The possibility of coal and the power ministries working together to facilitate re-engineering of existing boilers (other than NTPC?s) and design boilers, that can run with blended coal of flexible ratio, is also part of the plan.
Even as the ministry has drawn up such a plan, the NTPC board has not yet taken any call. ?There are no immediate plans of re- engineering boilers and NTPC has not conceived any plan of setting up plants to run on imported coal,? NTPC?s executive director Chandan Roy said.
A Bhel official said while designing a boiler, one of the major considerations was the lowest possible cost at which a power plant could run. Designing a boiler to run on fully-imported coal cannot have any cost consideration, which doesn?t suit the Indian economy.
Moreover, if power producers are capable of affording the cost of imported coal, there remains no logic for CIL to sell coal at a deeply discounted price or at half the price at which coal is sold in the international market, the official said.