Panel asks CEA to prepare report on allocation of coal rejects

The move is part of an effort to frame a policy for allocation of rejects amid reports some of this low-grade coal is being sold in violation of norms

An inter-ministerial panel has asked the Central Electricity Authority (CEA), the power ministry’s technical and planning wing, to prepare a report specifying technical standards and overall demand for coal rejects, the low calorific value by-product of the coal washing process.

The move is part of an effort to frame a policy for allocation of rejects amid reports some of this low-grade coal, generated in privately-held washeries, is being sold in violation of norms. The policy will come as a breather for companies having invested close to Rs 2,700 crore in reject-based power plants across three states.

The panel, headed by the coal ministry’s additional secretary A K Dubey, in its meeting on December 6, has asked the CEA to report within a week on the Gross Calorific Value (GCV) of such coal required for firing plants set up exclusively on rejects.

State-owned miner Coal India (CIL) operates 17 washeries with an installed capacity of 37 million tonnes (MT), generating 1.4 MT rejects annually. Washing improves calorific value and fetches a 15-20 per cent premium for CIL. The rejects are sold through e-auction. Washeries run by CIL’s consumers generate an additional 6.5 MT rejects – a major grey area.

According to CIL, it has no control over the quantity of these privately-held rejects or their utilisation. Also, the Coal Controller’s Office, the coal ministry’s technical wing, says there is no data available on rejects. The new policy will result in a shift from selling rejects through e-auction to allocation of rejects through linkage.

The coal ministry is also trying to redefine the concept of rejects in view of the changed coal grading and pricing system of GCV of January 2012. According to the environment ministry, the new policy should also cover rejects generated in captive coal blocks. The rejects-based power plants need to be run on coal with a GCV of 2,800 Kilo Calorie Per Kilogram.

Between 2007 and 2012, five washery reject-based projects of 518 Mw capacity have been commissioned. This includes two projects of 300 Mw capacity by Aryan Coal Beneficiations and a 63 Mw project by SV Power Ltd in Chhattisgarh, apart from a 120 Mw project of Gupta Energy in Maharashtra. A 30 Mw project by Maadurga Thermal Power is also likely to come on stream this year in Odisha.

A separate inter-ministerial committee on coal linkages had held in January this year that despite the inability of CIL to meet the existing gap in the demand and supply of coal, washery-reject based plants may be supplied linkages as these plants have already been commissioned. Besides, the coal requirement of such plants is only to the tune of 500,000  tonnes annually.