The Hindu Business Line : Fuel woes may dampen NTPC's new projects

FUEL management woes are likely to besiege the commissioning of several of the Rs 26,000-crore National Thermal Power Corporation's gas and coal-based power projects coming up over the next two years.

While uncertainties over the proposed gas supply deal with Reliance Industries has forced the utility to try and work out alternative fuel arrangements for its 1,300-MW Kawas and Gandhar expansion plans, the continuing coal shortage is likely to bog down fresh coal-fired projects coming up over the next fiscal, including the 1,500-MW Kahalgaon, 1,000- MW Vindhyachal and 500-MW Rihand projects.

With the signing of the Reliance gas supply deal for NTPC's Kawas and Gandhar, which is already one year behind schedule, still under cloud, RIL gas for the two expansion projects coming up around March 2007 would not be available for an year after the projects go on stream. RIL has now raised a slew of preconditions before the final gas supply and purchase agreement can be signed with NTPC.

To make matters worse, the domestic coal supply situation is not expected to improve significantly by next year, with shortages expected to touch 30 million tonnes. NTPC's coal-based expansion projects slated to come up next year, starting with the 1,500-MW Kahalgaon station, would force the country's largest power producer to depend on imports.

There is also the logistical nightmare of ensuring that the available domestic coal is blended with the imported coal across NTPC plants, since the boilers of most of these projects are not designed to run entirely on the high-calorific-value imported coal alone.

The NTPC management is working on short-term arrangements to tide over the near certain fuel problem at the Kawas and Gandhar expansion plans, with RIL gas nowhere in sight.

"We are making arrangement on a short-term basis for Kawas and Gandhar, and, hopefully, by that time, Reliance gas will be in place. We are working on the possibility of combining naphtha and gas and use that for commissioning... We will also arrange for some gas once the plant is commissioned and by the time the Reliance gas should come," an NTPC official said.

According to analysts, however, running the stations on liquid fuel for an extended period of time could have obvious price implications, especially, since RIL has stated at a recent analysts' meet that production from KG Basin might happen only in 2009-10, way beyond the Kawas-Gandhar commissioning in March-April 2007.

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