Amarpali open cast coal mine of Central Coalfields (CCL) subsidiary of Coal India Limited. One of the major project in India located at Chatra district in Jharkhand. (Source: Express Photo by Partha Paul/File)
The Association of Power Producers (APP) recently informed Piyush Goyal, Minister of State (Independent Charge) for Power, Coal, New and Renewable Energy and Mines, through a letter that coal stock at 18 private power plants has “depleted to critical levels” due to logistical issues at the state-run Central Coalfields Limited (CCL), which is their coal supplier, leading to a situation where plants are “being forced to shut-down”.
The coal ministry, however, has told The Indian Express that only 5 private power plants — of the aforementioned 18 — are linked to the CCL and “coal dispatches to these plants” is in proportion “to the payments made by the plants to the coal company”.
In a letter dated August 11, 2017, Ashok Khurana, Director General, APP, told Goyal: “This is to bring to your notice that coal supplies from CCL have been extremely poor for the past few weeks, leading to rapid depletion of coal stocks at multiple plants. As on August 9, 2017, as many as 18 power plants which are drawing coal from CCL had less than 7 days coal stock.” The APP represents all leading private power companies and the CCL is one of the subsidiaries of the state-run Coal India Limited. Khurana then explained the reason for the decreased supply stating that Chandrapur-Dhanbad railway line, which is an “arterial rail route for coal evacuation” from Bharat Coking Coal Limited (BCCL), has been shut down for “safety concerns”. BCCL is also one of the subsidiaries of Coal India.
According to the APP, CCL has been dispatching 8-10 rakes per day to the consumers of BCCL since this line has been shut down. “Due to this, the commitment level of CCL has increased significantly without any increase in production. However, while supplies to state/central power plants have not been reduced, supplies to private plants have been reduced disproportionately in order to meet the increased commitment level,” Khurana stated, adding that “CCL is not able to meet the commitment of supplies on account of production as well as logistical issues”.
“In view of the above circumstances, coal stock at most of the private power plants, drawing coal from CCL, has depleted to critical levels. This has led to a situation where plants are being forced to shut down units for want of coal, resulting in reduced power availability for discoms (distribution companies),” Khurana stated.
The Indian Express contacted the Ministry of Coal with specific queries related to the issues raised in the APP’s letter. Mukesh Choudhary, Director, Ministry of Coal, said: “There are five private power plants which are linked to CCL. These plants are supplied coal as per their pro rata Annual Contracted Quantity (ACQ). The materialization of coal dispatches to these plants is commensurate to the payments made by the power plants to the coal company.”
Choudhary further stated: “Many of these plants had regulated coal intake in the months of April and May 2017 despite the fact that Central Electricity Authority has been advising the power plants to build up stocks up to the normative levels. CCL is taking necessary measures to ensure that coal supply commensurate to payment is made to all these plants.” Moreover, the CCL spokesperson said that the company “is not linked with 18 Private Power Plants, instead only five private power plants are linked with CCL namely Rosa, Bajaj, JP Bina, Jhajjar and Maithon Power limited”. The company spokesperson added: “They (five plants) are being supplied coal as per their Pro-rated Annual Contracted Quantity and the payments made by them. Materialization of dispatches commensurates their timely payment.”
According to a senior CIL official the CCL is not facing any supply issue currently, and it can supply the maximum amount of coal as per the contract, but for that to happen, the payments by these five power plants have to be done on time.
