Anil Sasi

New Delhi, Aug. 3

SHORTAGE of coal has forced the Centre to rethink its thermal generation strategy in favour of locating future coal-fired projects near the coastline and using a blend of imported and domestic coal as feedstock.

Hitherto, the Central power utilities such as NTPC and State sector projects have focussed on setting up pithead-based plants and using only domestic coal as fuel.

According to Government officials, the move is aimed at the twin-pronged benefits of extending the life span of the country's coal reserve, expected to last another 50 years or so, while also optimising the generation efficiency of thermal stations by mixing high-calorific imported coal with the low grade domestic coal.

Also, mixing domestic coal with the more expensive imported coal would ensure that the generation tariffs are kept under check, officials said.

"We are discussing the issue with Central utilities as well as State Electricity Boards (SEBs). The strategy of locating stations near the ports and using a mix of imported and domestic coal would help tide over the ongoing coal shortages as well as improve generation efficiency through the use of high-quality imported coal. In the medium to long-term, the move would have an impact on the country's energy security, since our coal reserves are limited," a Government official said.

The move to shift to a mix of domestic and imported coal comes in the wake of the ongoing coal shortage projected to continue till 2008-09.

Coal import opportunities are being explored in South Africa, Indonesia, Australia and China, where the coal quality is better with gross calorific value generally around 5,300-6,000 kilo calories/kg, while the calorific value of domestic coal is only around 3,000 kcal/kg, officials said. The calorific value of blended coal is higher at 4,500-4,800 kcal/kg. Besides the higher calorific value, the blended coal is superior due to its lower ash content as compared to domestic fuel, officials said.

According to Government data, this fiscal alone, power majors including NTPC, Reliance Energy, several of the SEBs and private generators will import over 13.45 million tonnes of coal to tide over the shortages.

NTPC will import 3.98 million tonnes (mt) of coal and has already mandated MMTC to import the fuel.

(This article was published in the Business Line print edition dated August 4, 2005)
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