India: Power Sector’s Dark Days

Coal shortage has brought down the capacity utilisation of plants below average

Business Standard Reporter / New Delhi Jul 22, 2012

The plants that are unable to run at full capacity include state-owned and largest power generator NTPC which has a 26,000 Mw generation capacity. NTPC plants that failed to live up to their planned PLF in June include Badarpur, Farakka, Kahalgaon, Rihand, Talcher and Simhadri, according to Central Electricity Authority data.

The unprecedented shortage of coal has created a crisis-like situation for the power sector with plants of 30,000 Mw capacity lying idle. Also, the number of power units that failed to meet their targeted plant load factor (PLF) jumped sharply from 10 in January to 25 last month. Insufficient coal stocks at power stations to tide over the crisis has only added to the problem.

In the state sector, plants owned by generating utilities of Haryana, Uttar Pradesh, Gujarat, Punjab and Kerala are running at low PLF.

While, power plants in India rarely operate at 100 per cent PLF, the current capacity utilisation by many has gone below average levels. The Badarpur plant’s PLF in June came down to 62 per cent against 85 per cent planned for. Similarly, Farakka’s PLF came down to 74 against 82 per cent planned. Also, Haryana Power Generation Corp (HPGCL) recorded low PLF of 54 per cent against 66 per cent planned. PLF of Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL) dipped to 47 per cent from 53 per cent planned in June.

The stranded capacity includes 6,000 Mw plants of NTPC Ltd. Reliance Power Ltd’s 1,200 Mw Rosa plant and Gurgaon-based Lanco’s 1,200 Mw Anpara C plant are also among those that are lying idle, according to a presentation on the developing crisis sent to Prime Minister Manmohan Singh by industry body Assocam.

What is worrisome is coal availability with 30 of the 89 power stations being critical, meaning they are left with stocks sufficient to maintain operations for less than seven days. Another 15 of the plants fall in the supercritical category with stocks sufficient for less than four days. These include Koradi power station in Maharashtra, Tata Rao station in Andhra, Kahalgaon in Bihar and Bakreshwar in West Bengal. This is despite the coal ministry’s claim that all the issues impacting availability at power plants, including production and logistics, have been taken care of.

The private industry says the impending crisis could be avoided if concerted efforts are made. “If domestic coal availability is falling short, coal has to be imported. It only requires the coordinated efforts of the three ministries – power, coal and petroleum and natural gas,” said Ashok Khurana, director general of Association of Power Producers. He said the projects lying idle include 9,000 Mw of gas-based capacity.

Experts believe the issues of clearances and land acquisition impacting coal availability need urgent attention to check the impending crisis.

“At the moment, there is complete confusion on land acquisition, especially regarding compensation. Also, the entire process of environmental clearances has to be made time-bound and objective if production from mining projects is to be improved,” said Dipesh Dipu, director, Energy and Resources at Deloitte Touche Tohmatsu India.

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