Fuel shortage versus govt efforts

Time has come to reduce the dependence on imported coal. Significant reforms from govt side are needed in the coal sector to minimise the demand-supply gap
Fuel shortageFuel shortage in the country is something that does not need any introduction. It is forcing the government to face many challenges. Scarcity of fuel is taking a toll in meeting the countrys power requirement. It has been reported that out of the total capacity addition in the 12th Five-Year plan (2012-17), a huge 76000 MW is impacted somehow due to shortage in fuel supply. More than 50000 MW of coal-fired power generation capacity and 24000 MW of gasgrid connected power generation capacity are facing challenges due to nonavailability of fuel.
A shortage of fuel needed to fire power plants and expectations of a deficient monsoon leading to lower hydro electricity generation are some of the major issues. If there happens a lower rainfall, it would also cause a drop in hydel generation, resulting in higher demand for thermal power. This would increase the requirement of coal, which fires most generation plants and is not produced in enough quantities to meet demand in the country. According to official data, Indias coal imports rose to 82.5 million tonnes till September end of the previous financial year from 69 million tonnes in 2010-11.
Coal sector reforms which will lower the need for imported fuel and reduce cost of generation for the power sector are needed. Distribution reforms are another key concern for the sector. The government is supposed to take some fundamental steps to improve the distribution side of business.
Importing liquefied natural gas is also not always a viable option. The shortage of natural gas in the country, caused by lower output at the KG-D6 block in the Bay of Bengal, has left plants with a combined capacity of 8000 MW without fuel. The government will also have to deal with stranded gas projects that are stuck for lack of gas supply.
Its criticalRecently it is also found that at least three state-owned thermal power plants in Uttar Pradesh have been running short of coal supply. The condition is so critical that the power plants may be forced to shut down if not replenished with a fresh stock. In search of solution to overcome the issue, state government had asked the central government to provide coal for a backup of coal.
Currently around 20 coal-fired plants in the country are running low on fuel stock and are practically making do with daily supplies. The CEA, which monitors the power sector, has said 38 power stations have less than a weeks stock and 20 units less than four days. But the plants are getting daily fuel supplies. CEA stipulates power plants to stock coal for seven days. Any stock less than this is categorises as critical.
Power plants have traditionally faced this problem and only some units are able to maintain adequate stocks. The problem arises due to Coal Indias inability to meet the targets for loading rail wagons, poor quality of coal and unavailability of wagons or locomotives as well as traffic congestion in key routes.
The power ministry has asked coal-fired plants to defer any maintenance shutdown till October to meet an anticipated rise in demand due to poor monsoon. It has also made plans to ensure the units have adequate coal to keep spinning.
The ministry has also asked Coal India to identify alternative sources, such as mines that have substantial stockpile from where coal can be supplied to power plants facing critical stock position. Similarly, NTPC has been asked to look into diverting coal from its Farakka and Kahalgaon plants, which have adequate stockpile, to units running low on fuel.
Need “sweeping reforms” The World Bank in its latest report “More Power to India The Challenge of Distribution” has said electricity distribution to the end consumer in India needs urgent reform if India is to scale back to high economic growth.
“Power distribution in India needs sweeping reforms if it is to bring back the country to a high growth trajectory and meet its goal of expanding access to electricity to all by 2019, the Bank report said.
To address the fuel shortage issues, government is definitely taking some steps. It has asked Coal India Ltd. (CIL), the worlds largest coal company, to improve efficiency to avoid restructuring. The power and coal minister Piyush Goyal has asked the company to improve the quality of its coal by 31st December. The minister has also said that the coal major should pull up its socks and perform in order to avoid restructuring.
Experts feel, coal grade slippage has an adverse impact on power generation. Keeping the same in mind, Mr Goyal has told CIL that coal supplied to the power companies should not comprise stones or boulders and it should work towards arresting coal grade slippage. According to the minister, the power generation companies should have the right to appoint neutral quality samplers.
Mr Goyal has also asked CIL to reduce the quantity of coal sold through e-auction and make that portion of the fuel available to power plants. CIL has been directed to limit e-auctioning of coal to 25 mt this year from 57 mt.
The coal ministry had earlier planned to restructure CIL to improve its operational efficiency. Coal India which accounts for over 80 per cent of the domestic coal production, missed its output target of 482 million tonnes (mt) in 2013-14 and produced only 462 mt of coal. The companys seven subsidiaries include Eastern Coalfields Ltd (ECL), Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd (CCL) and South Eastern Coalfields Ltd (SECL).
Moreover, recently at a meeting with private power developers, coal ministry and CIL officials, Mr Goyal asked the company to make efforts to raise production from its existing mines. Mr Goyal met top power leaders, including Anil Ambani, Chairman, Reliance Power Ltd, Gautam Adani, Chairman, Adani Group, Vineet Mittal, Managing Director, Welspun Energy, and Naveen Jindal, Chairman,
Jindal Steel and Power Ltd., to look for solutions to address the countrys electricity shortage, which was as high as 7000 MW in May.
 The government is hopeful for the promising future and believes that the stress in the electricity sector is not as severe as it was being made out to be. Hope the burning issues may get the appropriate solutions as soon as possible.

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