Future Challenges in Coal Based Power Plants

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India’s power market is the fifth largest in the world. Coal fuels about 55 % of India’s power generation, and if current positions are accurate, the proportion will grow substantially in the next 20 years. To this point, India has met its burgeoning demand for electricity primarily with the development of conventional thermal power generation with coal representing the lion’s share of generating fuel. The power sector is high on India’s priority as it offers tremendous potential for investing companies based on the sheer size of the market and the returns available on investment capital. But of late Coal based Power Projects are facing various challenges or threats in order to get accomplished and commissioned in due time.

If we arrange the challenges as well as problems faced by a coal based Thermal Power Project (TPP) in a descending order, it would be like – (1) Shortage of coal
(2) Problems regarding land acquisition
(3) Water allocation problem
(4) Environmental problem regarding emission standards of the criteria pollutants (5) Problem in transportation of coal
(6) Transmission & Distribution Problem
(7) Power Trading Issues
(8) Availability of power equipment / EPC players
(9) Lean focus on BoP-Civil & Structural issues
(10) Investment & Financial Risk Issues

(1) In India there are three major suppliers of coal namely Coal India Limited (CIL), Singareni Collieries Company Limited (SCCL), Neyveli Lignite Corporation (NLC) and among them CIL contributes 81.1% of India's overall coal production (Feeds 82 out of 86 coal based thermal power plants in India). But the production is not enough to meet the demand of the power sector. Fuel (Coal) Demand- Supply gap during 12th Plan is as below – Installed Capacity by 2016-17: 167 GW

Domestic coal required: 842 MT
Expected domestic coal production: 550 MT
Demand supply gap: 292 MT
Equivalent imported coal requirement to domestic coal: 54 MT (Considering 82.5 % PLF for greater than 200 MW units). So there is a huge amount of coal shortage which has to be cover up either by imported coal or my increasing mining capacity. But use of imported coal will lead to the high generation cost (coal cost+ customs duty+ transportation cost of coal from port to plant) again in India sufficient infrastructure is not available i.e. port, railways to take care of the imported coal. In case of indigenous coal ash content is quite high so we are already unwillingly transporting a huge amount of ash when we transporting the coal. Regarding coal mining CIL has shown a decline in its production rate and increasing the coal cost. NTPC CMD has said that CIL is the only company whose production is decreased but net profit is increased. Again due to this decline in production existing Thermal Power Plants are running shortage of coal. The main reasons behind the reduce in productions are – (i) Environmental issues – coal mines are not properly filled with sand after the evacuation of coal so MOEF restricting the coal mining. Again a huge amount of coal reserve is underneath the forest again we are unable to dig out the coal without MOEF’s clearance. (ii) Coal storage & evacuation problem i.e. unavailability of ample Coal Handling Plant/Coal Washeries in the mines. Coal crushing capacity is not developed due to facilitate more storage. (iii) Coal mines are not distributed in India they are confined to Eastern & Northern Eastern zone so it is problematic with respect to coal linkage for plants located on Southern/Western zones. (iv) Sector wise priority and allocation is not done (v) Surplus coal distribution policy is not been regarded (vi) No up gradation in the coal mine equipments especially in case of the open cut mines. The requirement of coal also necessitates introduction of higher size equipment to work at a larger stripping ratio. Again captive coal blocks are been allocated previously to both PSU and private developer but they have failed to develop the mines due to land...
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