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To avoid summer coal crunch, NTPC looks to build buffer stock

🔴 Floats tenders to procure over 14 mt of imported coal

Written by Karunjit Singh | New Delhi |
January 22, 2022 3:50:40 am
coal supply, thermal power, NTPC Ltd, NTPC Farakka, coal production, Power Ministry, Coal Ministry, Business news, Indian express business news, Indian express, Indian express news, Current AffairsNTPC Farakka, West Bengal. Thermal power producers have raised the issue of uncertainty of delivery of coal. File

One of India’s largest thermal power producers, state-owned NTPC has floated tenders to procure over 14 million tonnes of imported coal despite elevated international prices as producers expect a potential shortage of domestic coal in the summer. Thermal power producers have consistently raised the issue of uncertainty of delivery of coal and are unlikely to be able to build up stocks to normative levels by March according to government officials.

Low coal stocks at thermal power plants had forced many states including Uttar Pradesh, Rajasthan and Punjab to impose load shedding in October, as states rushed to power exchanges paying three-four times normal rates for power due to inadequate supply.

NTPC has floated tenders to procure 14.5 million tonnes of imported coal for various thermal power stations expecting a shortfall in supply of domestic coal.

“We expect that there may be a shortfall (of domestic coal) and we need to keep a buffer stock of coal,” said an NTPC official who did not wish to be named. The official added that issues around availability of domestic coal for the summer season had cropped up as early as March in 2021.

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The government had in October permitted power generation companies that use domestic coal to import upto 10 per cent of their coal requirements amid the coal shortage The price of Indonesian coal is currently about $160 per tonne up from about $75 per tonne in January 2021.

While the ministry for power has asked the Indian railways to prioritise coal deliveries to thermal power plants to build up coal inventory, they are still unlikely to be able to build up stock to reach a targeted level of 58 million tonnes by March, according to government officials. Post the coal shortage at thermal power plants in October, the centre revised stocking norms upwards to require thermal plants to maintain higher stocks between February and June prior to the monsoon period when coal stocks tend to fall.

About 58 of 180 thermal power plants that are monitored daily had critical levels of stock on January 20, according to data from the national power portal. The total stock of coal at these thermal power plants stood at 24.6 million tonnes.

Power producers note that timely availability of coal is still uncertain despite assurances from Coal India and the coal ministry and have called for greater accountability for non-delivery of coal.

“The key issue is the uncertainty that power producers face on the quantum and timing of coal availability and its transportation through rail. We have been asking for accountability in the supply of coal and its transportation through tripartite agreements between power producers, Coal India and the Indian Railways,” said Ashok Khurana, Director General of the Association of Power Producers.

Khurana added that the system of supply on a “best efforts basis without any accountability has not proved effective” and that a “blame game starts up” between the Indian railways and Coal India when coal shortages occur.

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