The Hindu Business Line : Karnataka Power Corp begins blending Indonesian coal

Snapshot
Imported coal blending brought down fuel consumption as it had higher calorific value
Increasing imported coal content was difficult due to high international prices
Coal requirement likely to further rise in the coming months, when additional stations are added

C. Shivkumar

Bangalore, June 17 The State Government-owned power utility Karnataka Power Corporation Ltd has begun blending imported Indonesian coal for its thermal plants.

KPCL officials said up that the blending was up to 20 per cent of the coal consumption of the thermal plants. KPCL currently operates two thermal plants – the 1470-MW Raichur Thermal Power Station (RTPS) and the 500-MW Bellary Thermal Power station (BTPS).

The fuel needs of both these plants are estimated at about 12 million tonnes a year of domestic coal, assuming a plant load factor (PLF) of 85 per cent. This was on the basis of fuel consumption from domestic sources that are of inferior quality.

Domestic thermal coal has a calorific value of just 3,000 kilo calories (KCals) per kg. Consequently, the officials said that imported coal blending therefore brought down fuel consumption. This was because imported coal, mostly from Indonesia, has a calorific value of about 6,100 Kcals per kg.

However, the officials said, they were not in a position to increase the content of imported coal.

This was in view of the high international prices. KPCL’s current imports are entirely through the spot markets. Consequently, this made the power utility vulnerable to fuel price volatility.

International thermal coal is currently priced at about $70 a tonne (about Rs 3,300) on a cost insurance and freight basis.

Hedging not an option

The officials said that, given the current international price structure, there was little scope for hedging fuel prices.

This was because hedging would imply that the utility would get locked into high prices over a long period. The officials said that the best option, therefore, was to blend domestic coal with imported coal.

Besides, there was also little scope for increasing power tariffs. This was because the original tariffs were worked out on the assumption of usage of domestic coal. Therefore, the officials explained that higher coal imports would not be viable unless international coal prices dropped below current domestic prices.

Coal from Singareni Collieries, where KPCL has its fuel linkage, is currently priced at about Rs 900 a tonne. Inclusive of transportation costs, the landed costs were close to about Rs 1,400 a tonne, or less than half the price of Indonesian steam coal.

KPCL currently feeds about 36 million units a day into the State grid from its thermal stations. The officials said that to sustain this generation, they kept the stock yard position high. The power utility’s stock yard position is equivalent to about 29 days’ generation.

Coal requirement

The officials said that coal requirement was likely to further rise in the coming months, when additional stations are added.

The proposal was to add another 250 MW to the existing RTPS and increase the capacity of the BTPS by another 500 MW.

Accordingly coal requirements are likely to rise by another 4.5 million tonnes a year for sustaining a power production at 85 per cent PLF.

More Stories on : Power | Coal | Karnataka

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page