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Thursday, 4 September 2014

Better Coal Management: Derailed Generation Sector’s prime requirement

Last updated: Feb 05, 2017 

Significant Generation Capacity Addition:

India has achieved significant generation capacity addition in the last 50 years. The current installed capacity of Indian power system is 305.5 GW (as on Aug 2016) with coal based power plants having a share of nearly 61 percent. Thus, coal based thermal power plants dominate the current Indian generation scenario and in the future also.

India to be among the most rapidly growing countries:

Recent studies by the US department of energy indicate that China, India and Brazil will be the most rapidly growing countries in terms of electrical demand. This is clearly echoed in the report of the “Working Group on Power”, Government of India, Ministry of Power, 2012, in which the additional generation capacity to be added in the 12th Five Year Plan is stated as 76 GW. It needs to add another 170 GW of installed generation capacity in the next decade to get the desired 9% growth in GDP and this can be achieved only through large capacity power projects. 

Concept of Ultra Mega Power Project:

In view of this, the Government of India has come up with the concept of Ultra Mega Power Project (UMPP). These coal powered, super-critical technology based power projects, each with a capacity of 4 GW or more is a series of ambitious power projects planned by the Government of India.

Various Issues in Coal Management Activities:

The various coal management activities such as planning, contracting, procurement, logistics and delivery are managed by different agencies. Thermal power plants, other than pit-head plants, rely on ship, rail or road transportation services to deliver coal from the sources to their plant location. Coal inventory management at the thermal power plant involves accounting of received and consumed coal. 

Many thermal plants have in-adequate automation and management system, often leading to inaccurate coal requirement forecasting. Tracking of coal transportation is also not very advanced. All this lead to inefficiencies and uncertain conditions causing either power plant outage due to lack of coal or un-necessary piling up of coal inventory and blocking of resources. 

Generating companies typically stock up coal for nearly 10 days of operation. The financial loss on account of power plant shut down because of non-availability of coal can be as much as 2 million USD per day for a thermal power plant of 1000 MW.

Therefore, the performance of Indian generation sector is going to be greatly affected by the coal supply management to its coal based thermal power plants. Officials say that the coal production is the same since the last 5 years and the credit goes to improper planning, policies and prevailing corrupt practices. Adding to the wound is the recent declaration of Supreme Court of India which states that the entire allocation of coal blocks from 1993 to 2010 was illegal, arbitrary and non-transparent.

There are situations when majority of coal based power plant in India have left with less than 7 days of coal stock. Many coal based power plants of the Central, State and private sector have been shut down in the past on account of in-adequate coal supply. This also increases the spot price of electricity at the Indian Energy Exchange (IEX). Same situation has aroused in year 2012 also.

Properly Integrated and Automated Coal Management System is required:

The message is loud and clear that the country’s power sector and hence the growth is dependent largely on the coal supply to the thermal power plants. A properly integrated and automated coal management system is required to keep the coal inventory to a minimum, at the same time ensuring un-interrupted power generation.

A better and efficient coal management system has to be derived keeping in view the various Ultra Mega Power Projects coming up in the 12th and 13th FYP. Special attention has to be given for demand side management so that the load can be properly managed during such a crisis.


Hindustan Times, 4th sep. 2014