INTERNATIONAL O&M CONFERENCE COAL SUPPLY CHALLENGES & WAY FORWARD 14 TH FEB 2012 - BY DK SAHA, DGM(FM) & JANARTHAN C. DGM(FM)
Electricity Per Capita consumption India Egypt China Brazil World Average Russia Germany Japan USA 730 1,465 2,000 2,340 2,701 6,425 7,442 8,459 13,990 Figures in kwh Electricity per capita consumption need to increase.
A deficit scenario persists 950 900 850 800 750 700 650 600 550 500 450 Line 1 REQUIREMENT AVAILABILITY Billion Units 691 631 9.6% 591 8.3% 559 8.8% 624 7.3% 579 548 519 900 831 8.5% 774 10.1% 737 11.1% 831 9.9% 747 665 689 2004 2005 2006 2007 2008 2009 2010 2011 DURING 20010-11, PEAKING SHORTAGES WERE 9.8%
Power Sector Overview Installed Capacity Fuel wise Nuclear 2% Diesel 1% Gas 10% Renewable 10% Hydro 20% Coal 54% (102 GW) Year Installed Capacity [GW] 2007 124 By 2012 190 By 2017 290 By 2022 425 By 2027 575 By 2032 800 Generation Installed Capacity (as on 30.11.2011) : 185 GW If Indian Economy has to grow at the rate of 9%, Power Sector also has to grow at the rate of 9%. There is a need for large capacity addition to meet the unmet demand
Coal - Only proven source of Thermal Power Generation Reserves Proven category COAL : 276 Billion Tonnes : 114 Billion Tonnes At present rate of production of 532 Million Ton/Year Proven reserves will last for 200 Years. India has large reserves. Nearly 87% of the total reserves are thermal coal. 78% domestic coal production is used for power generation Coal is going to be the main source of power generation in the country for at least next 25-30 years
MILLION TONNES RAW COAL PRODUCTION IN INDIA 600 500 400 300 200 100 0 361 383 407 431 460 490 526 03-04 04-05 05-06 06-07- 07 08 YEAR 08-09 09-10 532 10-11 Growth of coal production is 6-7% whereas demand for electricity has been growing at an average growth rate of 7% to 8% and demand supply gap has widened over the years.
Coal Demand-Supply Scenario in the [XI Plan] (Fig in Million Tonnes) Sl. Details 2011-12 2016-17 a) Indigenous coal requirement 455 802 b) Indigenous coal availability from:- i) CIL 347 415 ii) SCCL 32 35 iii) Captive mines 23 100 c) Total availability of indigenous coal 402 550 d) Shortfall in indigenous coal availability (a-c) 53.0 252 e) Requirement of imported coal to meet the shortfall in indigenous coal availability 35.0 168 f) Requirement of imported coal for imported coal based projects 20.0 40 g) Total requirement of imported coal (e+f) 55.0 208
Existing Strategy to Mitigate Coal Shortage. At present coal shortage is mitigated thru Import coal. But Cost of imported coal is very high leading to increased Cost of power generation. Imported coal is almost 2.5 to 3 times costlier than the domestic coal on heat value basis. During the year 2010-11 about 25 Million Tons of coal was imported for the power sector. Additional financial burden on DISCOMS on this account itself was more than 12000 Crores. If we have to import 200 Million Tons of coal in the year 2017 extra financial burden on this would be more than Rs. 1,00,000 crores.
Coal Scenario in NTPC BY 2016-17 By end of XII plan, NTPCs coal based installed capacity is expected to be around 50705 MW (JV not included) and coal requirement would be 277 MTPA @90% PLF. YEAR Demand Coal Supply Captive Supply thro E- Deficit Import( (MMT) thru ACQ/ Supply Auction/ MoU (MMT) MMT) Linkage (MMT) (MMT) (MMT) 2012-13 172 144 2 4 22 15 2013-14 201 159 11 5 26 17 2014-15 215 169 22 7 17 11 2015-16 231 174 33 8 16 10 2016-17 277 183 48 9 37 25 * CIL 114.7 + SCCL 10.2 **Assuming coal availability through LOA at 65% PLF level.
Challenges for Power Producers QUANTITY Shortage of domestic coal has resulted in availability of coal only for a PLF of 60-65% for the Units commissioned after 1.4.2009. With the commissioning of more no. of Units, PLF achieved with domestic coal could be even lower. Imported coal can be blended only up to 10-15%. This will result in a PLF of 70-75%. At such low PLF, generating companies will not be able to recover their fixed charges. Bankers have already taken a serious note of this issue. Investors are shying away from Power Sector Low Availability of domestic coal could result in low capacity addition in Power Sector. There is an urgent need to improve domestic coal production to meet requirement up to 80-85% PLF.
Challenges for Power Producers QUALITY There is no consistency in the quality of coal being supplied by Coal Companies Boulders, Stones, have become a cause of concern. These are creating coal unloading problems and large retention time of railway rakes resulting in availability of less number of rakes for coal movement, Adequate crushing facilities at mines need to be created. WASHED COAL As per MoEF stipulations, Power Stations in Urban areas and the Power Stations located 1000 KM away from mines are to be supplied with washed coal We do not have adequate coal washing facilities. Many of the Plants at load centre are not getting washed coal. There is an urgent need for creating additional coal washery capacity.
Challenges for Power Producers FUEL SUPPLY AGREEMENTS FSA signed earlier are valid for a period of 20 years with commitment of supply up to 90% of ACQ with the provision of incentive and disincentive Coal companies are now asking for FSA for a period of only 5 years with a commitment level of only 50% of ACQ. The ACQ quantity itself is for 85% PLF and in some cases 90% of 85% i.e., 77% PLF. In the FSA, if the commitment is only for 50% quantity, it will result in supply of coal only for about 40% PLF. With such provisions of FSA, no bank will provide loan and investors will not be willing to make investment. We need to have long term FSAs with 90% commitment level. COAL PRICING AND COAL REGULATOR There are frequent increases in coal prices without any transparency In the Power Sector, tariffs are regulated by Regulatory Commission where they decide tariff based on a transparent mechanism of public hearing and after interacting with Generator, Purchaser and other stake-holders. There is an urgent need to have coal regulator
Negative Coal Balance at Various coal companies Coal company wise details of the projected negative coal balance by CIL upto 2016-17 is placed below: FY 2011-12 ECL BCCL CCL NCL WCL SECL MCL NEC CIL 2012-13 2013-14 2014-15 2015-16 2016-17 -6.56-5.4-27.97-6.86-11.51-92.16-84.32 0.65-234.13-5.06-7.39-37.42-23.15-15.16-96.46-120.03-0.69-305.36-4.07-5.59-32.02-21.35-15.61-87.46-113.73-0.33-280.16-3.26-4.69-24.82-19.55-15.61-73.96-109.23 0.21-250.91-0.56-4.24-22.32-17.75-15.61-62.26-98.43 0.44-220.73 3.04-3.34-13.12-15.05-15.61-60.46-82.23 0.89-185.88
The Way Forward Speed up domestic coal production including captive coal mining. Domestic coal procurement at premium price. Long term agreement for import coal to contain volatile market price Demand side management of coal at stations for economic use of coal.
Measures to improve Domestic coal production Detail exploration needs to be enhanced to bring more coal reserves under the proven category for further mining. Environment clearance, Forest clearance, Land acquisition are the most time taking activities. In most of the cases these Environment and Forest clearance takes about 3-4 year and thereafter land acquisition another 3-4 years. There is a need to have uniform land compensation and R&R provisions across the country. These provisions should provide adequate incentive to the locals to give their land. World over mining is totally mechanised with the use of high capacity Shovels, Dumpers and other mining equipments. There is a need to upgrade mining methodology in India. To extract more coal from under ground mine latest technology like Long Wall technology needs to be considered.
DEMAND SIDE COAL MANGEMENT Scarcity of Domestic Coal. Why it is required? Emerging competition among the power utilities Increase in cost of Generation leading to low merit order rating and consequent backing down generation. Migration of coal pricing from UHV to GCV Based Coal quality deviation between mine and power station end. Higher loss in transit High detention of rakes leading to high demurrage charges due to ingress of big boulders and stones. Continuous increase in specific coal consumption in spite of import coal blending.
DEMAND SIDE COAL MANGEMENT Coal supply chain right from Mine end to Boiler can be divided into the following four areas. Mine end coal loading, Weighment and Sampling. Transportation and Unloading Stacking and Handling Milling and Boiler Combustion
DEMAND SIDE COAL MANGEMENT Mine end coal loading, Weighment & Sampling. Contract for Coal Crushing Ensure proper Weighment Installation of AMS for proper coal sampling Coal Washeries as per MOEF stipulations
DEMAND SIDE COAL MANGEMENT Transportation and Unloading Installation of Wagon Tipplers at all stations Healthy MGR Track & Signaling system Yard lay-out improvement Mechanised tools for faster removal of big boulders Proper CHP coal evacuation
DEMAND SIDE COAL MANGEMENT Stacking and Handling Good Stack yard management Proper system for Import coal blending Stacker- Reclaimer Healthiness Dust Suppression and minimisation of coal leakage
DEMAND SIDE COAL MANGEMENT Milling and Boiler Combustion Recycling of Mill Reject Reduction of unburnt carbon in Bottom Ash Minimisation of coal leakage Coal Recoupment from Coal Slurry Pit
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