Coal news and updates

Punjab coal shortage dampens power surplus hype

The initiative of Punjab to set up power generation units has hit a roadblock with massive shortfall in supply of coal due to cut in allocations by Coal India. But the silver lining is that consumers will still pay much less for power from imported coal than what they would have shelled out for electricity bought by Punjab from other generation units or through sharing agreements. This was pointed out by entrepreneurs at the Progressive Punjab Investors' summit 2013 while discussing the power scenario in the state.

It was pointed out that despite the 'super critical' fuel efficient power plants being set up in the state, the new system brought in by Coal India means that the balance coal will have to be imported from as far as Orissa. About 55 % of the total coal requirement is presently being met with this. The balance coal will have to be transported to the power plants in the state.

The cost of power would definitely be lower for Punjab and this can be passed on to the industry. However, the rider is that transmission and distribution losses should be controlled while effectively utilizing the large existing transmission network in the state. Rs 6.50 to 7 per unit is competitive pricing of power and this can be brought down in the future.

"Unforeseen situations like what Coal India did after getting an assurance for fulfillment of coal demand should be dealt with swiftly and systems should be put in place in the government for this," highlighted experts.

The need for tackling two key issues plaguing the sector - land acquisition and shortage of fuel -- was discussed in detail in view of the state government's claim to become power surplus by2014.

Last year, Punjab chief minister Parkash Singh Badal had met Union coal minister Sriprakash Jaiswal, seeking dedicated coal linkage for the upcoming thermal plants at Goindwal Sahib, Rajpura and Talwandi Sabo.

The state has been dealing with the issue of coal shortage for a while. Two months back, Panem Power Energy had threatened to curtail the coal supply to the thermal plants in Punjab as an arm twisting measure. Panem had informed PSPCL also claimed that company has been raising various issues regarding financial constraints since December 2012. The company claimed that coal quality being supplied to thermal plants in Punjab is superior to what is being declared by PSPCL testing laboratories.

Chief Engineer Fuel in its memorandum has anticipated nil stock at Lehra Mohabbat and Bathinda thermal plants by the end of October and at Ropar thermal plant the stock will be just sufficient to run the plant for 7.7 days. PSPCL plants can generate 750 MW only from coal supplies made by Coal India.

Six power plants in the western region -- Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra -- had less seven days stock on the same day. And five power stations in the southern region - Andhra Pradesh, Karnataka, Tamil Nadu -- had less than seven days of fuel stock on the same day. The government has also proposed to add 1 lakh MW of electricity in the next five years, from all sources of energy.

According to Planning Commission estimates, the country's energy supply needs to grow at 6.5% annually if the nation has to achieve annual economic growth of 9% during the current plan period (2012-17).