Captive power plants in Odisha in trouble over acute shortage of coal

Total need of Odisha is 80 million tonnes, of which captive power producers need only 40 million tonnes for the consumption

Captive power plants (CPPs) in Odisha are in a bind over acute shortage of coal which is affecting their operations.

Major coal-based industries which are facing a shortage of coal in the state are Vedanta, JSL, Hindalco, JK Paper and Facor Power.

These industries are dependent on Mahanadi Coalfields Ltd (MCL), a subsidiary of Coal India (CIL), for their coal requirement to run their CPPs.

Of the total, 40 million tonnes (MT) coal requirement by CPPs, supply by MCL stands as low as 15 MT forcing the companies operating in varied sectors either run their power plants by importing coal or at lower capacities. 

While independent power producers (IPPs) and government power plants are getting an adequate supply, homegrown captive power plants (CPPs) with an aggregate capacity of 7,800 Mw are saddled with acute coal shortage.  

“Due to coal scarcity, power plants are operating at 60-70 per cent of their installed capacity which is ultimately hampering the interests of the state and nation", said Abhijit Pati Chief Executive Officer- Aluminium Business at Vedanta Aluminium Ltd while addressing a workshop on ‘Dialogue for Coal Security for Odisha-based Industries', organised by Utkal Chamber of Commerce and Industries (UCCI). 

SS Upadhyaya from JSL also raised the issue linked with transportation of coal to the designated plants. 

“Non-materialization of rakes is worsening the coal crisis in the state. Imported coal often lies stagnant at Paradeep, Dhamra and other ports as there are no rakes to transport them. Industries in Odisha are operating with coal inventory as low as 3-4 days, which is extremely stressing for the operation. If bigger industries like JSL are facing huge losses because of this, the situation for MSMEs is dire. Coal security of industries native to the state needs to be the priority for the state” he pointed out.

Although Odisha is endowed with 24.52 per cent coal reserves and 15 per cent of coal production in India, the local industries have been striving for sustainability due to the acute shortage in coal supplies.

The total need of the state is 80 million tonnes, of which captive power producers in the state need only nearly 40 million tonnes for the consumption.

"MCL produces about 140 million tonnes and can easily cater to the needs of the local industry. Unfortunately, the entire industrial fraternity requiring coal reels are on the acute shortage as the supplies to CPPs by the Coal India arm is only 15 million tonnes which is about 30 per cent of the requirement", industry sources said.

MCL officials could not be reached for comments.

“We have already taken up the issue with the Chief Secretary of the state government and have sought their intervention for the larger benefit of our own industries if required, Utkal Chamber will take up the issue with Union coal minister", said Ramesh Mahapatra, president of UCCI.