Coal-As Fuel Option

1
Coal-As Fuel Option

• R.L. Mattoo
• GM (Fuel Management), NTPC

2
Synopsis

• Power sector scenario
• Fuel Options
• Coal as viable fuel
• Issues and way forward

3
Power Infrastructure In India
As on Dec .05
4
PRESENT CAPACITY MIX FUELWISE
5
INDIAN POWER SECTOR
By the year 2012, Indias peak demand would be
157,107 MW with energy requirement of 97500 MU
Capacity to increase to 2,12,000 MW by the year
2012 to meet the peak demand of 1,57,107 MW
6
11th Plan Capacity Addition Plan 11th Plan Capacity Addition Plan
Tentative/- type wise Tentative/- type wise
Type Total (MW)
Hydro 12,000
Thermal 46905
Indigenous Coal 28155
Imported Coal 10000
Lignite 1750
Gas/ LNG 7000
Nuclear 3160
Total 62065
7
Factors Affecting Choice of Fuels

• Fuel Options determinants
• Availability
• Affordability
• Reliability
• Environment friendliness

8
Major Options Available

• Coal
• Domestic
• Imported
• Blended
• Lignite
• Gas
• Domestic
• LNG
• Transnational piped gas
• Hydro
• Nuclear

9
COAL RESERVES IN INDIA (Billion Tes)
STATUS AS ON 1.1.05
At the present rate of extraction, coal and
lignite resources in India are expected to last
for about 140 years
10
EXTRACTABLE COAL RESERVES IN INDIA
FIG IN BILLION TONNES
11
LIGNITE

• Reserves
• Around 30,300 million tes
• Location
• About 88 of reserves located in state of Tamil
  Nadu
• Balance (about 12) located in Rajasthan,
  Gujarat, JK Kerala
• Limitation Suitable only for pit head
  generation

12
Coal Demand Scenario In India
13
Likely Coal Supply Scenario
Supply only from CIL sources
14
COAL SHORTAGE SCENARIO IN THE POWER SECTOR
Shortage to be addressed through import
15
COAL AVAILABILITY vis-à-vis SHORTAGE

• Coal shortage envisaged due to
• Long term linkage accorded on normative PLF of
  68.5 and 80 for stations coming after 1996,
  whereas the national average is 70 PLF. (some
  of the stations like those of NTPC operating at
  90 PLF)
• Delay in development of linked mines

RESULT - NEED TO AUGMENT COAL AVAILABILITY
16
INDIGENOUS FUEL RESOURCES GAS

• LOCATION BALANCE RECOVERABLE
  RESERVE (As of 1st April 2005)
• ONSHORE 340 BCM
• OFFSHORE 761 BCM
• GRAND TOTAL 1101 BCM
• (MOPNG Basic statistics)
• GAS RESERVES ARE ADEQUATE ONLY FOR ABOUT 34 YEARS
  AT PRESENT LEVEL OF GAS CONSUMPTION.

17
Future Gas Demand projection(Source Hydrocarbon
Vision 2025)

Against the current demand of about 150 MMSCMD,
supply is about 92 MMSCMD only. Gas/RLNG
availability and prices of available
Gas/RLNG/imported piped natural gas are two major
constraints for gas based power generation
18
Price Benchmark - Coal - the Competing Fuel
contd

• Fixed cost of Generation for coal based Gas
  Based Plants are comparable.
• Thus,for Gas/R LNG to compete it has to be on
  fuel cost component basis

19
OTHER INDIGENOUS FUEL RESOURCESLIMITATIONS

• Other resources like crude oil, coal bed methane,
  renewable energy sources etc. are meagre and not
  capable of catering to our energy requirements in
  the long run.
• Gas and crude oil prices are volatile in the
  international market and coal import is a much
  cheaper option than import of oil and gas
  especially at coastal locations.
• Conclusion - Coal is likely to remain our
  mainstay fuel for energy generation till 2031-32.
  However, current shortage is a cause of concern.

20
Coal Shortage The Way Forward

• Stepping up domestic coal production by
  allotting blocks to central and state public
  sector units and for captive mines to notified
  end users
• Coal Import needs creation of necessary
  infrastructure. Will also put pressure on
  domestic coal industry to be efficient. NTPC has
  imported about 3 million tes of coal in 2005-06.
• Amendment in Coal Mines Act to facilitate (a)
  private participation in coal mining for purposes
  other than those specified and (b) offering of
  future coal blocks to potential entrepreneurs.
• Technology for economic exploitation of coal
  lying at greater depths

21
Issues of concern with the coal sector

• Pricing
• 70 of the domestic coal is dedicated to power
  generation.
• Fuel cost constitutes about 65 of the total cost
  of generation
• Since the dismantling of APM, coal prices have
  been taken for arbitrary escalation with no
  transparency
• The opening of the sector to private players will
  bring in competition and prices will be
  determined by market dynamics
• Till such time, a regulatory mechanism needs to
  be put in place to put a check on arbitrary price
  hike.

22
Issues of concern with the coal sector Contd

• Infrastructural Limitations- Burdened
  transportation network - calls for following
  measures
• Transportation capacity to be increased.
• Rationalization of linkages to cut down on
  transportation distance and better utilization of
  existing infrastructure
• Cut down on criss-cross rail movement
• Coastal stations to be run on imported coal

23
Issues of concern with the coal sector Contd

• Environmental Issues
• More emphasis on use of washed coal
• Use of clean coal technology like IGCC
• Strict implementation of MOEF stipulations
• Proper restoration of degraded land due to open
  cast mining.

24
Conclusion Way Forward

• Coal shall remain mainstay for power generation
  in India.
• Allocation of captive blocks to end users.
• Allowing private participation
• This will also create a competitive environment
  and which will enable market driven pricing
  structure.
• Till such time, regulator to be put in place to
  ensure fair pricing of coal, proper development
  of infrastructure efficient utilisation of
  resources in the coal sector.
• Keeping in view the longer gestation period of
  coal mines, faster clearances of coal projects
  needs to be undertaken so as to be commensurate
  with the commissioning of power plants.
• Coal washing and use of clean coal technology to
  be promoted.
• Transportation network bottlenecks to be reduced
  by judicious rationalization of linkages.

25

• THANK YOU