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CPPs in Odisha look at imports as coal crunch worsens

Most CPPs are operating at half of their rated capacities as coal stocks at their plants have dwindled to two to three days

Jayajit Dash  |  Bhubaneswar 

CPPs in Odisha look at imports as coal crunch worsens

Stifled by the growing crunch in coal supplies, Captive Power Plants (CPPs) in Odisha are now being forced to operate at depleted capacities and are even looking at imports to overcome the deficit. Most of the CPPs are operating at about half of their rated capacities as coal stocks at their plants have dwindled to two to three days.

Coal meant to be supplied to CPPs through railway rakes are pending since March this year. The woes of CPPs are compounded by a preferential treatment meted out to the Independent Power Producers (IPPs), alleged an source. "Coal backlog is piling since the IPPs have always got preferential allotment. This has created a situation where the CPPs have been kept waiting for months together as rakes are not available. Since rakes are not available for linkage and washery rejects, non-core sectors including CPPs are forced to buy more through e- auctions where prices have surged 50 per cent from Rs 3,000 to Rs 4,500 per tonne," the source added.

The coal crunch abetted by lack of adequate rakes has impacted operations of Nalco, Vedanta, Ltd, Ltd (JSL), Arati Steel, Ltd (IMFA), (FACOR), Birla Tyres, Emami Paper, and to name a few.

As many as 223 rakes are pending for allotment to industries like Nalco, JSL, Arati Steel, Bhushan Steel, J K Paper and others.

Railway freight traffic officials denied a comment on the rake position.

The supply crisis in coal has particularly impacted the industries in steel, aluminium and ferro alloys sector who bank on their captive power supplies to ensure competitive pricing of products. The CPPs are mostly getting thermal coal from Ltd (CIL) subsidiary Ltd (MCL) and lesser quantities from the other subsidiary- South Eastern Coalfields Ltd (SECL).

For instance, Talcher Coalfields under MCL's command area needs 45 rakes each day for smooth evacuation of coal. Against this, only 30 rakes are made available. With IPPs getting precedence in coal supplies, the backlog for other categories of power consumers has built up.

MCL officials could not be reached for their comments.

For CPPs, importing costlier coal is not a viable or sustainable option.

"Despite several representations made to MCL and Railways, the coal supply position has not improved. Even after making timely payments against allotted quantities, coal delivery is still pending. This is not only blocking huge amount of our expensive working capital but has forced us to import equivalent quantity of coal to sustain our operations", said an official with a steel company.

For the power guzzling aluminium industry, opting for coal imports is even more unsettling. Power contributes around 40 per cent to the making cost of aluminium. is facing shutdown of some of its power units due to a pollution board order and the worsening coal supplies have dealt a blow.

"Unavailability of sufficient railway rakes has caused intermittent disruptions in our operations. If tis crisis deepens, we fear we may have to depend on imports", said a Ltd official.

runs 1215 Mw and also has 2400 Mw coal-fired station in the vicinity of its aluminium smelting complex at Jharsuguda. Of the 2400 Mw capacity, can use up to 1800 Mw for its captive consumption.

Even the government owned aluminium maker is not spared from coal supply bottlenecks.

"Against our daily requirement of 20,000 tonnes of coal per day, we are hardly getting 8000 tonnes. The rakes are not available. Also, we are not getting coal through the Merry Go Round system. Our coal stock is also rapidly exhausting", said a source.

Captive Generating Plants in Odisha have a combined installed capacity of 9760 Mw. Major generators are (1215 Mw), (1200 Mw), Aditya Aluminium (900 Mw), Jindal Steel & Power Ltd (810 Mw) and (740 Mw).



First Published: Mon, October 16 2017. 21:10 IST