The Centre has stepped in to supply critical coal stocks to Rajasthan as the desert State stares at a severe supply crunch in FY24 due to a delay in handing over of mining land under the Parsa East Kente Basin (PEKB) block by Chhattisgarh.

The delay in allotting forest land for mining not just threatens supply of about 9 million tonnes (mt) of coal to Rajasthan’s thermal power plants (TPPs) in FY24, but also investments of around ₹29,000 crore.

The delay in coal supply to Rajasthan has led to power shortage in the State, which coupled with extreme heat and humidity in past few months and maintenance and technical issues at TPPS, has forced the provincial government to ration electricity in some cases.

The coal supply is estimated to produce 4,300 MW electricity at the TPPs. businessline spoke to Central and State officials regarding the current supply scenario.

Land troubles

A senior Rajasthan government official said the PEKB block, with a peak rated capacity of 15 mt per annum (MTPA), is situated in Chhattisgarh’s Surguja and Surajpur districts. It is allotted to Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL).

In February 2022, Union Environment Ministry approved non-forestry use of 1,898.328 hectares land, for PEKB phase-2 operations. Under this, handover and tree felling exercise in 141 hectares is required to continue mining operations in FY24. “Of this, tree felling was completed on 43.63 hectares and 91.21 hectares is yet to be handed over by Chhattisgarh. If tree felling is not done immediately, it could result in an estimated loss of around 9 mt of coal production in FY24,” the official explained.

The forest clearance of 1,136 hectares was granted by Chhattisgarh in March 2022 and permission to carry tree felling in 131.884 hectares was given by Surguja district administration in May the same year. Tree felling and handing over of 43.63 hectares was completed in September 2022. The activity had to be stopped due to protests by locals at the site.

The Centre had to allocate additional coal from Coal India (CIL) subsidiary Bharat Coking Coal (BCCL) as an extreme special measure, leading to higher power generation costs for Rajasthan.

Inordinate delays

Top sources in the State government said that repeated requests have been made by Rajasthan government and the Centre to Chhattisgarh, but it has not yielded desired results.

Rajasthan Chief Minister Ashok Gehlot has been constantly following up on the issue with his Chhattisgarh counterpart Bhupesh Baghel since 2021. In 2023 itself, Gehlot wrote as many as four letters highlighting the power crisis and the need to urgently commence operations at PEKB. The latest letter was written in August, which was reviewed by businessline.

Rajasthan has also been continuously communicating with the Centre, including the PMO, Coal Ministry and the Power Ministry regarding the supply scenario.

Coal reserves at PEKB Phase-1 have been exhausted and the delay in handing over of the remaining land is leading to a shortfall of 8-10 rakes per day to the power plants in the State. The production target of the PEKB block (Phase-2) is 18 mt in FY24.

Rationale

The urgency is due to Rajasthan’s peak tourist season from September to March. Lack of electricity leads not just to power cuts, impacting tourism, but also increases the cost for both hoteliers as they have to shell out more for operating gensets. In 2022, tourist-centric districts such as Udaipur, Jodhpur and Bikaner faced several power cuts impacting business. Another issue is that these regions are home to several medium and small scale industries such as pottery making and ceramic units.

A State government official explained that RRVUNL has a cumulative thermal power capacity of 7,580 MW. Of this, around 4,340 MW is dependent on the PEKB coal block, which includes TPPs at Suratgarh, Chhabra and Kalisindh.

As recently as August 2023, Rajasthan witnessed a maximum demand of about 16,000 megawatts (MW) with a shortfall of 2,000 MW. However, the deficit was also due to maintenance shutdown and technical issues at some generating units. The average power consumption has crossed around 340 million units per day.

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