NTPC designs new projects on increased imported blend

Shortage in supply of domestic coal has forced state-run power producer NTPC to design its projects for future capacity addition with a blending 30 per cent of imported coal. This might raise the cost of power by 30 paise for the end users.

Currently, the company blends 10-15 per cent of imported coal. This move is bound to increase the cost of power as imported coal has a higher calorific value as compared to domestic coal.

“We have already issued coal-based tender for nine units of 660 Mw and nine units of 800 Mw with these specifications. The boilers for these projects will be designed to blend 30 per cent of imported coal,” a senior NTPC official told Business Standard.

Both the tenders are estimated close to Rs 34,000 crore and were issued before April, when the government notification for blending of imported coal came.

In April this year, Central Electricity Authority (CEA) had issued an advisory asking all power utilities and equipment manufacturers to ensure that in future projects boilers and auxiliaries should be designed for blending at least 30 per cent or more imported coal.

As now, only 10-15 per cent of imported coal is blended as equipment are not designed for higher blending. Moreover, it leads to pollution and corrosion of boilers. NTPC plans to import 16 mt of coal in the current financial year. Out of this, 12 mt have already been arranged by STC and remaining we will do directly. The imports will fill a shortfall in supplies from Coal India Ltd.

For 2010-11, the domestic coal production target was 423 mt but only 377 could be achieved. Out of this total production, Coal India Ltd had to supply 335 mt of coal but actual realization was 302 mt. Even the plants commissioned during the year 2009-10 would operate at lower PLF and the plants commissioned in 2010-11 would not operate at all as they have no coal supply.

Coal supply shortage has also forced the government to plan a capacity addition of only 7675 Mw for the year 2011-12, which is the last year of ongoing 11th Five-Year Plan. With this target, the capacity addition for the 11th Plan will be little over 42,000 Mw, as against a target of 62,374 Mw.