t k chatterjee

8/6/2019 T K Chatterjee

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SECURING COAL SUPPLY

THROUGHINDIGENOUS AND FOREIGN

SOURCES

T.K. Chatterjee

E.D.(FM),NTPC


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Basic Coal Facts

Countries Fall under distinct categories due to

uneven distribution of coal resources

TierI Countries: Self Sufficient or better : North

America & Russia

Tier- II Countries: Prime Exporter: Australia,Indonesia & Colombia

Tier-III Countries: Facing possible shortfall from

indigenous supply: India & ChinaTier-IV Countries: Facing possible shortfall of

imported Coal: Japan, Korea and much of

Europe


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World Coal ScenarioTop Ten Hard Coal Producers in the World in 2007

PR CHINA 2549 MT

USA 981 MT

INDIA 452 MT

AUSTRALIA 323 MT

SOUTH

AFRICA

244 MT

RUSSIA 241 MT

INDONESIA 231 MT

POLAND 90 MT

KAZAKHSTAN 83 MT

COLUMBIA 72 MT

Global hard Coal

consumption

1990 2006 2007

WORLD 3461 5164 5522

Source: BP, IEA,WEC

1990

24%

2006

37%

2007

39%

0%


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Coal in World Electricity Generation2006

POLAND 93%

S.AFRICA 93%

AUSTRALIA 80%

PR CHINA 78%

ISRAEL 71%

KAZAKHSTAN 70%INDIA 69%

MOROCCO 69%

CZECH

REPUBLIC

59%

GREECE 58%

USA 50%

GERMANY 47%

TOP COAL IMPORTERS(2007)

JAPAN 182MT

KOREA 88MT

CHINESE

TAIPEI

69MT

INDIA 54MT

PR CHINA 48MT

GERMANY 46MT

TOP COALEXPORTERS(2007)

AUSTRALIA 244MT

INDONESIA 202MT

RUSSIA 100MT

COLUMBIA 67MT

SOUTH AFRICA 67MT

PR CHINA 54MT

USA 53MT

Source: BP,IEA,WEC


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GLOBAL PRIMARY ENERGY SUPPLY AND TOTAL

WORLD ELECTRICITY GENERATION BY FUEL

Source: BP,IEA,WEC


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Coal Reserves in India

(as on 01-01-08) Billion tonnes

Proved Indicated Inferred

Coking 17 13 2

Non-Coking 79 106 36

Total 96 119 38

Source: MOC


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RAW COALPRODUCTION IN INDIA

5

55

AR

MILLION

TONN

Growth of coal production is 6. % whereas demand forelectricity has been growing at an average growth rateof 7% to 8% and demand supply gap has widened overthe years.


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Existing Generating Capacity- Sept,2009

Fuel wise break-up (MW)

COAL 80,396 53%

GAS 16,449 11%

OTHERS 55,515 36%

TOTAL 152,360 100.0%

(All figures provisional from CEA)

FOR NTPC : COAL BASED-24395MW

GAS BASED 3955 MW


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COAL REQUIRMENT,AVALIABILITY DURINGXI PLAN FOR

POWER SECTOR[ Source:CEA Presentation made on 30.09.09 in the Fuel Infrastructure Meeting under the

Chairmanship of Member(Energy)]

Sl.

No.

Details 2007-08# 2008-09#` 2009-10# 2010-11 2011-

12

a) Indigenous coal

requirement

340.0 377.6 401.0 434.0 488.0

b) Requirement of importedcoal for imported coal

based projects

-- 0.4 3.0 10.0 19.0

c) Total coal requirement 340.0 378.0 404.0 444.0 507.0

d) Indigenous coal availability

from:-

i) CIL 278 294 313 335 360

ii) SCCL 30 30 30 32 32

iii) Captive mines 11 19 20 21 22

e) Total availability of

indigenous coal

319 343 363 388 414

f) Shortfall in indigenous coalavailability (a-e)

21 34.6 38.0 46.0 74.0


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29894

75000

50000

As on today 2012 2017

INSTALLEDCAPACITYINSTALLEDCAPACITY

MULTI PRONGED APPROACH TO

CAPACITY ADDITION

GREENFIELD PROJECTS

BROWNFIELD EXPANSION

JOINT VENTURES

ACQUISITIONS

DIVERSIFICATION IN RELATED

BUSINESS AREAS

HYDRO PROJECTS

COAL MINING

POWER TRADING

OIL / GAS EXPLORATION

LNG VALUE CHAIN

RENEWABLE

NUCLEAR

MULTI-PRONGEDGROWTH

STRATEGY

Projects underconstruction 16,180 MW

NTPCGROWTHSTRATEGY

Vision 2017 and beyond..2030


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11

NTPCs Vision By 2017

At Present 2011-12 2016-17INSTALLED

CAPACITY (MW)29,894 ~ 50,000 ~ 75,000

COAL MINING

PRODUCTIONFROM INDIGNOUSMINING

-- 12 MTPA ~ 47 MTPA

A 75,000 MW+ Integrated Power Company by the year 2017

Vision 2017 and beyond..2030


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COALSUPPLYTONTPC STATIONS

Y AR

ILLIONTO

NN

S

The graph shows an ever increasing demand for more coal as NTPC kept on

building additional generation capacity over the years


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NTPC's Coal Requirement (Million Tes)

0

50

100

150

200

250

300

350

In the current year,coal shortage of20 million tes is envisaged which

NTPC plans to bridge through import


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Areas of Concern in Eastern Region-IShortfall mitigation at Farakka & Kahalgaon

The import supplement required for Farakka &Kahalgaon is 6 million tonnes. The domestic coalavailability for Farakka & Kahalgaon is 15 milliontes on the basis of assurance of CIL.

As blending of imported coal with domesticcoal cannot be increased beyond 15%, weneed to mandatorily tie up 6 million tons ofdomestic coal from CIL. Coal production andevacuation arrangements to be expedited at

Chuperbhita and Hurra C.

The import requirement would then be reduced to3 million tonnes.


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Areas of Concern in Eastern Region-I

Railway bottle necks for Farakka and Kahalgaon

Railways are ensuring supply of 10 rakes/day

but Andal-Saithia and Sahibganj -Kahalgaon

single line route is congested. Less Availability of BOBR rakes is also a

concern.


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as ern eg on-

Enablers for Coal sufficiency at Farakka & Kahalgaon Coal can be transported through Inland waterway no-1 i.e

Ganga passes through Farakka, Kahalgaon and Barh whereNTPCs 03 super thermal stations are located. The receivingport for imported coal can be Haldia.

Feasibility of receiving imported coal via IWT is being studied Availability of more Railway rakes@10 rakes a day as per their

assurance. Augmentation of existing unloading infrastructure at Farakka to

handle 8 railway rakes a day.

9 to 10 rakes a day of Total coal on offer from Lalmatia to besupplied to Kahalgaon.

Augmentation of unloading arrangements at Kahalgaon-II to handle9-10 rakes a day.

Continue Supplying imported coal at Kahalgaon and Farakka

Early Coal Availability from Captive Block ofPakri Barwadih

Early availability of coal from Brahmini mines


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Areas of Concern in Eastern Region-IIShortfall mitigation at Talcher Kaniha

Expeditious development of Kaniha mines and MGR link to

Kaniha wharf wall.

Railways to assure supply of 7 rakes a day on sustained basis.

Sustained supply of 35,000 TPD from Lingaraj mine by MCL.

Augmentation of present MGR network to facilitate Additional

number of Railway and MGR Rakes

Improvement of Surface miner availability/reliability from 1 to 3

numbers.

Supply of Imported Coal to continue.

Inland water transport route to be explored.


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Fuel Tie up Status for XI Plan

projects Fuel has been tied up for all projects

envisaged to come up in the 11th plan

except Farakka-III, Mauda U#2 and

VSTPP-IV

Railway movement clearance has been

obtained for all 11th plan projects except

Vallur-II,VSTPP-IV and Muzaffarpurwhichis awaited.


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Coal Requirement for 11th plan projectsCapacity

MW

Long Term

Linkage

MT

2011-12

MT

2016-2017

MT

Gap w.r.t

Linkage

(2016-17)MT

Sipat-I 1980 10 11.04 11.04 1.036

Barh 1980 10 3.75 11.24 1.239

Korba III 500 2.233 2.79 2.79 0.554

Simhadri II 1000 2.31 5.37 5.37 3.059

NCPP Expn 980 4.62 5.01 5.01 0.394

Bongaigon TPS 500 1.65 1.66 1.66 0.006Bongaigon TPS 250 0.97 1.06 1.41 0.437

Mauda 1000 5 1.42 5.68 0.676

Rihand III Unit-I 500 1.77 0.21 2.49 0.721

Vindhyachal-IV 1000 4.62 0.22 5.22 0.600

Barh-II 1320 0 0.94 7.49 7.49

Farakka-III 500 0 3.63 3.63 3.631

Nabinagar 1000 5 3.67 5.68 0.68

Vallur -I 1000 4.62 5.37 5.37 0.34

Vallur-II 500 2.31 0.22 2.68 0.37

Jhajjar 1500 6.94 8.05 8.05 1.11

Muzaffarpur Expn 500 2.31 0.74 3.55 1.24Subtotal 16010 64.353 55.15 88.36 23.583


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Coal Requirement for 12th plan projectsCapacity

MW

Long Term

Linkage

MT

2016-2017

MT

Gap w.r.t

Linkage

(2016-17)MT

Rihand III U=2 500 2.31 2.49 0.181

Solapur 1320 6.09 7.49 1.403

Kahalgaon III 500 2.31 3.58 1.27

Darlipalli 3200 12.5 14 1.50

Lara 4000 7 15.89 8.89

Darlipalli II 1600 7.39 9.08 1.69

North Karanpura 1980 10.24 11.24 1.0

Gadarware 2640 12.19 15.40 3.21

Marakkam 4000 18.48 16.34 -2.14

Vindhyachal-V 500 2.31 3 0.69

Singrauli III 500 2.31 3 0.69

TTPS II 1320 6.09 7.91 1.82

Kudgi 2400 11.08 13.07 1.99

Tanda Expn 1320 0 5.99 5.99

Jhajjar II 1000 4.62 5.08 0.46

Meja 1320 6.09 7.32 1.23

New Nabinagar 1980 9.14 10.98 1.84


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Projected Coal deficit (Gap) for Existing and

projects coming up in 11th and 12th plan

in the terminal year 2016-17NTPC Stations 2016-17

(MT)

Existing stations 12.11

Projects in the 11th plan 23.583

Projects in the 12th plan 31.714

Total 67.407

The Deficit coal requirement is planned to be met through captive mining of

coal blocks allotted to NTPC and import Substitution


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Reasons for Coal shortage


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Coal availability scenario for NTPC

Out of expected coal based capacity

addition of about 30,000 MW by 2016-17,about 19, 000 MW will be on linkage mode

and balance 11,000 MW on integrated

mode.

The total coal shortage for power sector is

expected to be about 87 million tes by

2016-17

FUTURE SCENARIO


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Reasons for coal shortage

The long term linkage for NTPC stations

correspond to 85-90% PLF level whereas the

generation target is at 92% PLF.

Growth in the coal sector not commensurate

with nations requirement of +8% GDP

growth.


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Slow clearance of projects. In some cases linked

mines are yet to be developed even though the

power projects have been implemented onschedule. This is resulting into under utilization of

installed capacity.

Ad hoc coal supply arrangements incurring

additional expenditure.

Further burdening of already burdened Rlytransportation network.



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Coal reserves are generally localized.

Transportation of coal is an issue.

Judicious rationalization of coal supply not

done due to various political and other

reasons.

Logistic Constraints


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Long term Measures to mitigate coal shortage

Backward integration into coal mining.

Resorting to integrated power project

with captive coal source concept.

NTPC is contemplating acquiring assets

abroad as a measure of long term fuel

security and to beat the current volatility

in the coal prices in the international

market.


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Strategies for

Coal Sourcing


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COAL

SECURITY

IMMEDIATEMEDIUMTERM

LONGTERM

IMPORT

E-AUCTION

DEVELOP CAPTIVE

MINING BLOCKS

ON FASTTRACK

MODE

MININGOF POTENTIALCOAL BLOCKSTHRU

JV ROUTE

WITH CIL

INLAND

WATER TRANSPORT

DEDICATEDFREIGHT CORRIDOR

SETTINGUPCOALWASHERIES

ACQUISIONOF COAL

BLOCKSABROAD

PARTICIPATE INPORT

DEVELOPMENT

FUELSUPPLYAGREEMENT

Bi-Lateral

Arrangement over

And above ACQ


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Fuel Supply Agreement

As per NCDP, power utilities to besupplied 100% of the normative coalrequirement with FSA. (Normative

requirement not frozen so far). NTPC has already signed a Model Fuel

supply agreement with Coal India Limited

for 90% coal requirement for existingstations of NTPC. The process of signingof FSAs for individual stations is inprogress.


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IMPORT(FIG INMillion Tonnes)

.

2005-06 2006-07 2007-08 2008-09

3.1 2.3 2.7 5.4

NTPC is partially mitigating its domestic coal shortage for existing stations by

importing coal through third parties and the percentage of import coal is

Increasing every year. In the current Financial yearNTPC planned to import 12.5

Million Tonnes


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Coal security-Augmentation of

unloading

NTPC has already started Augmentation

of unloading infrastructure like Wagon

Tipplers at pithead stations for absorbingmore IR rakes.

This would enable the stations to absorbmore coal through railway system.

ap ve n ng oc s


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ap ve n ng oc s

Backward IntegrationCoal Mining

Projects

Basket source

for

Command area Mine

CapMT

MOC Schl.

forProd.

Est.

Minelife

Pakri Barwadih

(critical)

Shortfall of

Lara and

Darlipalli

CCL-N

Karanpura area

15 2009-10 38

Chatti-Bariatu Barh-II-1600

MW/TandaExpn-1320MW

CCL-N

Karanpura area

7 2010-11 25

Kerandari do 6 2011-12 30

Dulanga Darlipalli-3200

MW

MCL-Ib Valley 7 2011-12 30

Talaipalli Lara-4000MW SECL-Mand

Raigarh

15 2011-12 30

Brahmini (Incl

Chichro

Patsimal)

(critical)

Farakka &

Kahalgaon

ECL 20 - 25

Chatti BariatuSouth

Darlipalli-3200 CCL-NKaranpura area

Production from Captive mines

not likely to commence in the

near future


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ACQUISITIONOF COAL BLOCKSABROAD

1. Participate in acquisition of coal blocks inprospective countries like Indonesia,Mozambique, Australia.

2. Leverage government support for tie up with

interested host country for expeditiousacquisition and development of mines anddevelopment of transportation logistics at the

exporting country.

This could be a long term Fuel securitymeasure and shall also help to partiallyoffset the volatility of coal prices in the

international market.


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DEDICATED RAILWAY FREIGHT

CORRIDOR

Has potential to meet long term Requirement.


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Mitigating Coal Shortage The Way Forward

Stepping up domestic coal production by allotting blocksto central and state public sector units and for captivemines to notified end users

Coal Import needs creation of necessary infrastructure.Will also put pressure on domestic coal industry to beefficient. NTPC has imported about 5.43 Mt of coal in2008-09 and is targeting to import more than 12.5 Mtof imported coal during 2009-10.

Amendment in Coal Mines Act to facilitate (a) private

participation in coal mining for purposes other than thosespecified and (b) offering of future coal blocks topotential entrepreneurs.

Technology for economic exploitation of coal lying at

greater depths


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MAJOR CONSTRAINTS IN IMPORT

Two major constraints in the import of coal

apart from Supply constraints in the

international coal market are:

1. Port infrastructure

2. Railway infrastructure

.


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AREASOF CONCERN As per indications, the port development

projects/plans would fall short of required capacity

addition to handle thermal coal imports of 100+MMTPA.

These projects are not mapped and positionedagainst Geographical demand centres. Most portdevelopment projects are along the east coast of Indiaand very few on the west coast

No visible plan of Indian Railways in place to cater tothe excess cargo to be handled by these portsexcept the dedicated freight corridor which in all

likelihood would not come before 2017.Plans to expand the railway network to connect theseports to inland destinations do not also seem to be inplace.

Source: CII


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Fuel Security: Thinking beyond

For a utility as large as NTPC, it is imperativethat we align ourselves completely with the

fuel business in line with the Vision of

becoming a fully integrated company by

2017.

Take fuel as a business.

Enter partial/ full Coal value chain.

Formation of a new subsidiary to handle fuel

business with complete autonomy to source

fuel.


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Thank You

t k chatterjee

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