NTPC blamed as coal stocks fall to critical levels, particularly at private companies

By: and | Published: September 4, 2017 5:01 AM

Coal stocks at thermal power plants across the country have dropped to alarmingly low levels.

coal stocks, NTPC, Coal India, CILAs on August 30, six pithead plants across the country had coal stocks of less than four days. (PTI)

Coal stocks at thermal power plants across the country have dropped to alarmingly low levels. Private power companies are the worst-hit, as state-run NTPC, under government patronage, is getting out-of-turn supplies.

According to sources from power companies, the shortage of fuel supply is primarily due to reduced production by Coal India (CIL) and its failure to open new mines and commission new railway sidings for seamlessly transporting the dual power plants. Adding to the woes is Jharia coalfield underground fire which led to closure of the critical Dhanbad-Chandrapura railway line in December 2016, badly affecting the railway’s network planning.

“While the private power generating companies are reeling under acute shortage of coal and shutting down units, NTPC is expanding its capacity without facing any competition, under patronage from ministries of power and coal,” a senior private power company executive told FE, on condition of anonymity.

“A lot of pit-head plants of NTPC which are not supposed to be served by the railways are being supplied coal because they are not getting enough coal from the ‘linked mines’,” a senior railway official who did not wish to be identified told FE. NTPC’s Korba, Sipat, Farakka, Kahalgaon, Kaniha units, despite being merry-go-round (MGR) plants, are being supplied coal in additional rakes deployed by the railways, depriving many private power plants of their due share of CIL’s stocks, the railway official confirmed. As on August 30, six pithead plants across the country had coal stocks of less than four days.

The coal ministry had said in May that NTPC’s Kahalgaon and Farakka plants (both pithead), which source coal from CIL’s Rajmahal open-cast mine, would not face any coal shortage issues after CIL reportedly faced troubles while acquiring land for the expansion of the mine. Recently, an official note sent by the Central Coalfield (CCL), a CIL subsidiary, to the railways urged the latter to prioritise six NTPC plants for coal supply. This led to coal stocks at some private thermal power plants which receive the fuel from CCL to reach precarious levels. As of now, 36 plants including GMR’s 1,050 MW Kamalanga unit, Hindustan Power’s 1,200 MW Anuppur unit and Reliance’s 1,200 Rosa plant have coal stock of less than 4 days.

“They (NTPC plants) are at a slightly better pedestal compared with other government utilities as well as private entities,” said the railway official cited above, adding that NTPC is getting around 92% of its ACQ (annual contracted quantity).

Unavailability of adequate coal in the sidings has increased the time taken to load railway rakes. As FE reported recently, some sidings of CIL subsidiaries are taking up to 7-8 hours to load coal instead of the standard 3 hours, due to lack of coal at loading sites. At one of the sites of the Bharat Coking Coal Ltd, which is affected by the closure of the Chandrapura rail line, it is taking up to 12 hours against 9 hours to load a rake.

In August, Uttar Pradesh’s energy minister Srikant Sharma sought coal minister Piyush Goyal help  rescue some private and state-owned power plants out of the critical-coal-stock scenario. Sharma requested Goyal to increase the quantum of coal supply to private power plants such as 1,980 Lalitpur plant and 1,200 MW Roja plant and state utility-owned generating stations such as 665 MW Harduaganj plant and 1,140 MW Parichha power plant.

With 155.5 MT produced in Q1, FY18, CIL’s coal production was 15% short of its target. Even as the government is taking steps to cut coal import for power generation, coal dispatch to the power sector by CIL fell 0.6% from last year in July to 31.1 MT. Overall domestic coal production growth slowed down to 5.1% during FY17. CIL produced 554.1 MT in the fiscal, much lower than the government’s target of 598.6 MT. According to research agency ICRA, the entry of renewable energy in power generation and plunging solar tariffs, has induced a structural shift in the coal demand-supply equation in the country.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition