Private power producers in Tamil Nadu are worried as lack of coal handling capacity at Ennore Port is likely to hamper their production plans in a couple of years. The situation could also affect the State’s efforts to attract new private power producers to set up units in North Chennai. As such the State is facing severe power shortage.

Till two years ago, private power producers were happy as the facility at Chennai port fully served their purpose. However, in October 2011, the Madras High Court ordered shifting of dirty cargoes of coal and iron ore from Chennai Port to Ennore, following complaints about pollution.

This shifting is now having a detrimental effect on many industries, including private power producers, who are dependent on private coal. Things are likely to become worse in two years, unless an additional berth is provided at Ennore to handle non-Tamil Nadu Electricity Board coal, officials of private power companies said.

No space to spare

However, the problem is that at Ennore port there is no berth to spare for the next two to three years. The port has allotted two berths (12 million tonnes per annum capacity) exclusively to handle coal for the Tamil Nadu Electricity Board. The one common user coal terminal of eight million tonne per annum (mtpa) capacity is run by Chettinad International Coal Terminal. This coal capacity is shared almost equally between private power producers and cement manufacturers.

The Tamil Nadu Generation and Distributing Company (Tangedco) is expanding its capacity. Also, as there is expansion of NTECL, a joint venture between Tangedco and National Thermal Power Corporation, the former has requested the Ennore Port to establish two additional coal berths.

In the first phase, a dedicated third coal berth has been approved for Tangedco with a capacity to handle 9 mtpa, to be built at a cost of Rs 137 crore. The construction of the berth is expected to begin in 2013-14 and it will take two years to complete. The port also plans to develop an LNG import terminal and a container terminal.

“What will happen to us? How will we meet our input requirement?” asked M.N. Janardhan, Vice-President, OPG Power Generation, a leading private power producer. New private power projects that are set up in North Chennai region will require a further 10 mtpa by end of 2014, he said. Even if the port plans to start to construct a berth tomorrow, it will take two years to finish. “How can we wait till then?” questions Parvin Kumar, Chief Executive Officer (CEO) of Kamachi group.

No go for private coal

The private birth allotted to Sical to handle iron ore remains unused since the allotment two years ago due to a ban on the export of the cargo. This berth cannot handle private coal as there is a parallel facility run by Chettinad International Coal Terminal Ltd, which is objecting to Sical handling coal.“Thus, even the level of expansion possible at Ennore is locked in litigation,” he said. Ennore has no plans to expand coal handling facilities but is proceeding to build container berths and will utilise the limited space available for that.

Chettinad terminal alone cannot meet the non-TNEB coal demand as the coal handling capacity is only eight million tonnes. Bottlenecks will develop in handling of coal and power production from existing plants will suffer.

While Krishnapatnam port in Andhra Pradesh is an option, but it is nearly 100 km from Chennai and will be a costly proposition to move coal by road or rail from there, said Janardhan.

Senthil Kumar, General Manager, Ennore Port Ltd, agrees that the port is unable to meet the demand of so many players, including the private power producers. However, he has a plan. For five years, the Sical terminal is locked-in and cannot handle anything other than iron ore. But, after that the terminal can be used for other cargoes. While Kumar’s plans sounds good, it will be too late for the private power producers.

The private power producers are pushing hard to go back to Chennai port, which has its 27 mtpa coal handling berth unused since October 2011. This facility can be easily brought to service by taking steps to control coal dust. In fact, such measures have been implemented successfully in other Indian and international ports, says Janardhan. He warned that due to the logistics problem, the State may not get power from private producers and that the power shortage could continue.

raja.simhan@thehindu.co.in

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