This is the age of energy transition, de-carbonisation is the buzz word, the demolition of coal-based pants in Europe is not a distant memory, India isn’t far behind, and we have our commitment under the panchamrit to deal with this challenge. But the narrative is not simple without a twist. India imports 70% of its petroleum requirement, which is less GHG intensive than coal that India has in abundance. Coal meets our energy security needs but contributes to global warming more. Under the situation, RE has been the focus and coal based capacity addition has taken a back seat. The intent is to go for EVs drawing power from a grid dominated by RE, meeting twin requirements of energy security and climate change mitigation. Further, vehicle to grid integration of EVs can provide backup obviating diesel requirement for electricity generation.
RE availability is of intermittent nature and with storage can be very costly since lithium requirement for battery has to be imported. Efforts for Green Hydrogen may improve the situation further but still in a very nascent stage. So, we must accept that coal-based generation in India is here to stay for the next two decades – though the percentage of coal-based power would be reduced substantially. Before we jump into any conclusion on coal we must take into cognizance the fact that EU with all its commitment for climate change mitigation with a history of EUETS dating back to 2003 is reviving coal based plants in view of the disruption of Gas supply from Russia following the Russo-Ukranian war.
Panchamrit Climate Commitment
- First – India will reach its non-fossil energy capacity to 500 GW by 2030.
- Second – India will meet 50% of its energy requirements from renewable energy by 2030.
- Third – India will reduce the total projected carbon emissions by one billion tonnes from now onwards till 2030.
- Fourth – By 2030, India will reduce the carbon intensity of its economy by less than 45%.
- Fifth – by the year 2070, India will achieve the target of Net Zero. These panchamrits will be an unprecedented contribution of India to climate action.
The supply of domestic coal increased from 2018-19 to 2022-23 with a CAGR of 6% but lagged behind coal consumption in domestic coal based plants that increased at the rate of 6.2% in the corresponding period. The import for blending with domestic coal for 2018-19, 2019-20, 2020-21, 2021-22 was 21.4 MT, 23.8 MT, 10.4 MT and 8.1 MT. We can clearly see that import requirements are going down every year but must keep in mind the disruption of the economy due to COVID. As the economy revives, the power demands would expectedly go up. The domestic coal stock is strategic because plants designed on domestic coal cannot utilize imported coal in large quantities beyond 10-15% because a furnace designed for a certain heat release and a matching heat absorption rate cannot absorb large heat release without slagging and clinkering due to ash fusion.
During April-September 2021 the domestic coal stock in the country declined from 28.8 MT to 8.1 MT by about 21 MT. To avoid a power crisis and a possible fall back on costly diesel based generation the coal stocking norms were revised on 06.12.21. As per the revised coal stocking norms, coal-based pit-head thermal power plants are required to maintain coal stock in the range of 12 to 17 days, depending on the month of the year, as against prevailing coal stock norm of 15 days. Power plants situated away from the mines i.e., the non-pit head plants are required to maintain coal stock in the range of 20 to 26 days compared to the prevailing coal stock norms of 20 to 30 days.
Further, in a calibrated mode, on 07.12.21 State GENCOs and IPPs were advised to import coal @4% of their requirement for blending in 2022-23. Subsequently, during the month of April 2022 the coal consumption in power plants grew by 12% over April 2021 leading to depletion in coal stock in domestic coal based plants by 4 MT. On 28.04.22 GENCOs were advised to blend coal by 10% to maintain sufficient stock for the monsoon months. While domestic coal supply for 2022-23 has increased the demand for coal based power has outpaced coal supply particularly in the monsoon months. The efforts to deliver domestic coal in large quantities through railways involved cancellation of railways trips and passenger trains since rail logistics too is limited. With 10% blending of imported coal the price rise per unit is estimated at 80 paise. The timely imports ensured coal stock in the country didn’t go alarmingly low during the monsoon months when production of coal dwindle because of water ingress in mines. The limited railways rakes were better utilized to carry coal from ports to generating stations. The coal stock position was further reviewed on 1st of August’22 – and as the coal stock had shown signs of recovery, Power Ministry directive to blend had been withdrawn and GENCOs were asked to decide on their own based on domestic coal availability to them.
Reliable coal supply to thermal power plants involves coal supply, automated loading-unloading and transport without bottlenecks. Ministry of Power is continuously engaged with Ministry of Coal, Railways and Shipping to ensure availability of sized coal, quick loading and unloading systems and rapid transport. Growth of coal mining and improvement in logistics of loading-unloading and transport look promising to obviate the need for costly coal imports in future.
Conditioned Coal Availability at Mine End
- Crushed coal 100 mm size in high percentage.
- Availability of Railways siding and high capacity silos providing vertical storage without coal burnout with automated loading.
- RCR or Road mode of coal transport to be minimized.
Under construction Rail lines to facilitate Rail transport linking mines
- NCL Area:
ii. Doubling and electrification projects in Singrauli area – especially Katni, Singrauli-Chunar
iii. Katni bypass
iv. Doubling of Dudhichua-Shakti Nagar Section (NCL funded)
v.Doubling of Karaila Road-Anpara & Anpara – Krishnashila and Krishnashila-Shaktinagar (EC Railway line Project)
ii. Construction of Eastern DFC
iii. Construction of Shivpur-Kathuatia line
iv. Doubling of Gaya-Kiul Section
v. Tripling of Barkakhana-Sonnagar Section
vi. Koderma-Tilaiya railway line (Greenfield)
ii. Tripling of Sainthia-Barharwa section
ii. Doubling of Angul-Talcher Road line
iii. Hingula-Balram Link
iv. Tripling of Talcher-Rajatgarh line
v. Construction of Talcher-Bimalgarh line
vi. Construction of fourth line between Jharsuguda and Bilaspur
vii. Widening of Sardega Loading Platforms
viii. Doubling of the Jharsuguda-Barpali-Sardega
ix. MCRL: Angul – Balram rail link, 14.5 km
ii. East-West Corridor (Gevra-Pendra Road section)
The Sagarmala project aims at “logistics infrastructure garlanding” of the country through its long sea coast of over 7,500 kilometres. It promises to be the biggest game changer in the field of logistical operations for India in the 21st century. India records one of the highest logistics-related overheads in the world and with this, the country’s economy and industry can’t be competitive. At its core, the Sagarmala Project was primarily divided into five major components.
iii. Port modernisation and new port development
iv. Port connectivity enhancement
v. Port-led industrialisation
vi. Coastal community development
vii. Coastal shipping and inland waterways
An assessment by CRISIL Coastal shipping of coal is set to double to 63 million tonnes by 2022-23, almost double the figure of 32 million tonnes in 2021-22, with the easing of structural bottlenecks. Major coastal coal movement in the country happens from the eastern coast. Coal produced by Coal India from its subsidiary Mahanadi Coalfields Ltd (MCL) is shipped to Andhra Pradesh and Tamil Nadu via Paradip and Dhamra ports. Presently, congested berths, particularly at Paradip port, are holding back rise in potential volumes. Coal loading through dry cargo export berth at Dhamra would ease capacity constraints and boost coastal shipping volumes. Ongoing projects are expected to improve rail connectivity at both loading ports. In the long-term, the heavy-haul rail corridor connectivity between Ib valley, the Paradip and Dhamra ports will be a booster.
According to the estimate, the overall coastal potential from operational plants alone, assuming a plant load factor of 75% and existing linkage with MCL, aggregates to 63 mtpa today, including 35.7 mtpa from plants located near ports and 27.3 mtpa from those located 200-400 km inland. Additional coastal coal volume of 25-30 mtpa is envisaged from movement to power plants with MCL linkage in Maharashtra and Gujarat, on the west coast. Partial import substitution of import-based power plants would add a further 15 mtpa. As per CRISIL Research, “A spurt in domestic production would bring down the share of imports in the power sector’s coal demand. While demand will grow at 6% CAGR (compounded annual growth rate) to 827 million tonnes in FY2022 from 621 million tonnes in FY2017, the share of imports will reduce from 11% to 7%. The share of coastal coal in demand will increase from 5% to 7%, which would also ease the congestion on railway tracks.”
Coal transportation contributes 25-30% to the cost of power produced by a plant located 1000 km from the mine it sources. The savings can be as much as 50-60% for a plant that is located near a port in Tamil Nadu or Andhra Pradesh, and sources coal from a mine in Odisha using a 45,000 dwt (dead weight tonnage) vessel. The savings can be more if a larger vessel is used. Factoring in the first and last-mile connectivity by rail to or from the loading/unloading port coastal shipping is far cheaper compared with transportation by rail, power plants are expected to prefer the coastal route once the loading infrastructure at ports and the rail connectivity projects come on stream.
Rail tariffs are also a critical monitorable, as higher short-haul and lower long-haul tariffs would impact the overall cost-competitiveness of coastal movement. Deployment of larger vessels for coastal movement would be crucial as it will safeguard the cost-competitiveness of seaborne movement over larger distances, as per CRISIL Research.
Large Capacity Silos at Plant and Ports for Vertical Coal Storage
Possibility of spontaneous combustion increases with the storage height in case of open stockpiling; however, in enclosed storage – higher the coal stored, more compacted it will become especially in the lower layers that eliminates the oxygen; and thus the risk of oxidation. The last decades coal silos have been built with storage levels of over 70 metres, which are working satisfactorily. Some grades of coal stored in the open air deteriorate where rain, wind and oxygen have free access to the coal mass. However, in completely sealed silos the lower layers are well compacted and conserved – so all the deteriorating factors are eliminated. Nowadays, the fire safety can be controlled by installing gas detection systems that can measure the smallest oxidation rates so adequate precautions can be taken in an early stage in a controlled environment. A detailed life cycle approach considering all the costs and benefits learns that the payback period of mammoth silos is attractive relative to the alternatives. Enclosed coal storage facilities require special fire protections systems, fires could be caused by self-heating or man-induced. Possible fires can be prevented by organisational, local, technical and constructive measures.
Enclosed storage systems as applied in the bulk handling industry can be divided into three main categories:
a.Silo storage, bottom discharge or flat bottom mammoth silo.
b. Longitudinal A-frame type storage shed, (covered stockpile)
c.Circular (dome) type storage, (covered circular stockpile)
An expert group has been constituted at NITI Ayog to conduct comparative analysis to study cost of transporting coal from one state to another vis-à-vis cost of generation of electricity from coal and its transportation. The expert group shall take up trend analysis of coal transportation costs to the power plants in respect of distance and states and their cost of generation as per the various mode of transport i.e. Road/Rail/ RCR mode/sea route and inland waterways.
The Terms of Reference (ToR) of Study was finalised as follows:
a. Analysis of various factors/taxes responsible for the cost of transportation of coal through various modes.
b. Analysis of various options for coal transportation to minimise the cost of transportation and assess optimal coal transportation route/slab for the power plants to minimise their cost of generation to the end users.
c. To assess the suitable change in the policy that will optimise the economic and technical parameters for the coal evacuation and reduction in the coal cost at destination in line with the global best practices.
The expert group will also consider seasonal variations in availability of different grades of coal, options for washing of coal to reduce transport cost. The core issue to be focused is competitiveness of Indian coal as compared to international landed coal. Three subgroups were mandated to take up a) Transport of Coal b) Taxes and levies and c) Innovative ideas to make landed cost of Indian coal competitive.
Coal traditionally providing the base load is now shifting to be the backup power. After the must run RE generation coal-based power is targeted to meet the total demand and supply gap. Coal-based power demand depends on weather in the short run, rains and cyclonic conditions bring down demand, hot days see spiraling demand for air conditioning requirement, windy conditions increase wind based generation besides lowering aggregate demand, as a result coal-based power demand may go down from 70% to near about 60%.
Coal-based power is on its way out but would be costlier as a backup power more like we pay more for DG sets. Railways, ports and mining infrastructure must be improved quickly besides underground mining to tap higher heat value coal. Large capacity silos at ports and power stations with automated loading and unloading for better utilization of domestic coal available in the eastern parts of the country with sudden huge demand rise in states like Gujarat, Maharshtra, Tamilnadu and Punjab. A linkage with meteorological data may be established as a part of a smart move to predict coal-based demand for the short run.
Dr. Bibhu Prasad Rath, an Additional General Manager at NTPC with thirty-three years of experience in the power sector, is a Mechanical Engineer from Odissa University of Technology and Research. He has pursued education and research PhD (In Business Administration-2015) from AMU and M.Tech (2004) from IIT Delhi. He is an active researcher with numerous publications across various journals and conferences.