Coal shortage forces DVC to go slow on capacity expansion

Our Bureau Kolkata | Updated on March 12, 2018 Published on January 14, 2012


Coal shortage has forced Damodar Valley Corporation (DVC) to go slow on nearly 3,200 megawatt (MW) of capacity expansion, which was originally scheduled to be taken up in the next Plan period (2012-17).

While DVC hopes to complete the bulk of its ongoing 5,200-MW expansion programme – targeted for completion by March 2012 – in the next fiscal, commercial production from a major chunk of the added capacity will depend on availability of coal.

“The 2 X 800 MW stage-II expansion at Koderma (Jharkhand) and 2 X 800 MW expansion at Maithon will be taken up depending on availability of coal,” DVC Chairman Mr R. N. Sen told media persons. He, however, clarified that the already approved 2 X 660 MW expansion at Raghunathpur (West Bengal) will be taken up once the legal dispute (over bulk tendering of power gear by NTPC) is cleared.

Idle capacity

Addressing a press conference, Mr Sen said that a number of units already commissioned (under the ongoing expansion programme) are either lying idle or running at half their capacities due to non-availability of coal, either from Coal India or from own captive sources.

Out of two units of 500 MW each commissioned at Mejia thermal power station, only one unit is running. The other unit is ‘idle' for want of coal as CIL as denied a tapering linkage — a temporary window granted to captive block owners to meet end-use.

Out of two captive blocks (of a combined capacity to produce 6 million tonne (mt) of coal) granted to the company, one mine has just started operations and will take a year to reach peak production levels. The other one is in advanced level of development.

The coal shortage will be more acute in 2012 as nearly 2,200 MW in capacities will be added at Durgapur (1000 MW ), Raghunathpur (1,200 MW ) between January and October. “Commercial production from the units will depend on coal availability,” Mr Sen said, adding that CIL was yet to commit supply against the coal-linkage for the Raghunathpur project.

Since it's not clear how much of the 14 mt linkage will be converted into fuel supply agreements by CIL, DVC has been told by the Union Government to step up imports. “We will be importing 3 mt coal in 2012-13 as against our original plan to import 3.74 mt in 18 months,” Mr Sen said.

Bond Issue

Meanwhile, the Centre has allowed the statutory organisation to raise up to Rs 4,400 crore as debt to finance ongoing projects through the issue of institutional bonds. The issue is likely to hit the market in end-February or early-March. The corporation is expecting the bonds to be backed by a Government guarantee.

The company has also received expressions of interest from six global consultancy majors including McKinsey, Boston Consulting Group and Deloitte for drawing up a 15-year strategy plan. The appointment of a consultant is expected to be finalised by September.


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Published on January 14, 2012
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