Accelerating coal production is need of the hour

Energy leaders, power producers and power plant managers opined on the expected crisis followed by the coal shortage that is largely impacting the thermal power plants, and the power generation pattern.  

As of January 2022, India has a total thermal installed capacity of 235 GW, with coal accounting for 51.6 percent of thermal power and the balance coming from lignite, diesel, and gas. In India, the private sector generates 48.5 percent of the country’s thermal power, while states and the central government generate 26.7 percent and 24.9 percent, respectively.

The Indian power sector is undergoing substantial upheaval, which has changed the industry’s outlook. The future of the power business in India is bright, and continuous economic expansion is driving electricity consumption. The Indian government’s emphasis on achieving “Power for all” has hastened capacity addition in the country.

Coal crisis, a threat to power sector 

India’s domestic coal production grew by 8.5 percent to 777 million tonnes (mt) in FY22 from 716 mt in FY21. Coal production in April 2022 was 29 percent higher compared to the same month last year, but the coal dispatch volumes increased by only 9 percent. Even then, plants have failed to maintain the necessary coal stockpiles.

Even the power ministry has lately suggested reducing domestic fuel supplies to state-run utilities by 5 percent if they refrain from importing coal for blending by June 15th as an attempt to manage the growing power issue and related power worries.

According to Bharat Sharma, AVP, PTC India Ltd. “In the current situation, coal availability is the most pressing concern and challenge. The Indian government is attempting to rationalise coal. Coal India Limited has taken a few measures to increase coal output for railroads. However, issues will persist if the needed and implemented solutions do not balance consumption pattern.” Furthermore, due to supply chain bottlenecks, issues and problems will continue to affect electricity generation, which will have a negative influence on our overall economy.

The current coal problem, according to Sanjiv Prasad, Vice President and Plant Head for Power & Utilities, Reliance Industries Ltd – DMD, is more of a payment issue than a supply one. Around March-April, the worldwide coal market had a crisis, causing prices to rise. However, the markets have since dropped, and we are presently trading at approximately $9 per million BTU, down from roughly $12 per million BTU at the mid-April lows. As a result, prices have fallen, and imported coal is now available. As far as I know, the government accepts coal imports.  

Foreseen and unforeseen challenges in power sector follows coal crisis 

The crisis has compelled India to modify its policy of reducing thermal coal imports to zero and to allow utilities to continue importing for the next three years. It also declared an emergency to restart all units that use imported coal, many of which are now closed owing to high international coal costs.

Due to limited stockpiles, Coal India has been obliged to redirect supplies to utilities at the expense of the non-power sector. The state-owned Indian Railways has cancelled passenger trains in order to make room for the transit of coal.

India also intends to restart more than 100 coal mines that were earlier deemed unprofitable. 

In light of this, Sanjiv argues, “We, as a firm, are depending on imported coal. As a result, we are not immediately impacted.” Other variables influencing the supply chain include people making long-term commitments and growing transportation fuel costs. As a result, trucks and dumpers are becoming increasingly rare. That is what we are fighting against, and it is all around us now.

The sudden elevation in diesel price rise 

So, eventually, diesel pricing surged, which no one could have predicted, and the government signed into couple of long-term deals. People are now looking for reliable and acceptable changes. As a result, I feel that many operators are in a similar scenario. There is considerable movement in the Indian vote. The government has organised for coal delivery via railroads. I’m not sure if there is a problem in the mining business, or with Coal India Limited’s mining that might jeopardise things. However, imports of coal, which were banned 1.5 months ago, are no longer limited to that amount. 

“The present issue has less to do with the volume of coal produced and more to do with the scarcity of coal stocks at coal-fired power plants and coal transportation logistics,” says Kashish Shah, Energy Finance Analyst at IEEFA.

According to Vinit Priyadarshi, Account Manager Operating Asset Solutions Portfolio, Black & Veatch, “availability is more or less a chronic worry in our country.”

When we look at these throughout a year, we can see that supplies have improved in certain situations, but the bulk of the plants have been cut. Almost everyone has accused Coal India Limited. There are also questions concerning the productivity of these mines. Automation is less important to Coal India Limited. Especially today, the government is forcing them to automate their thinking. So, hopefully, these measures will increase coal mine output.

While Akilur Rahman, Chief Technology Officer, Hitachi Energy, feels that difficulties in the power sector are unaffected by whether they are caused by coal output or something else. “I believe mining automation should be improved. Furthermore, I feel that, more than availability, the supply chain is a significant problem in transporting coal to the plant.”

The dumpers, as well as the trucks, are unavailable due to the high cost of oil. So, there are a variety of difficulties that I believe technology may help with. This sort of circumstance may be predicted with the use of technology. How are we utilising AIML to forecast asset life as well as any malfunction or failure? This may also be done in a more comprehensive manner, allowing you to analyse and collect data on the full traditional power chain, from coal mines to coal-transporting trucks, as well as the impact of vehicles not being available. All of this is possible to mimic in real time. They may also be used to forecast situations like this and then act accordingly.

All of this is possible to mimic in real time. They can also be analysed to forecast such events and then offer advice to the appropriate agencies or businesses. This is something I believe is certainly doable.

Suggestions to improve performance efficiency in plants 

The usage of biomass is one potential that the government is trying to pursue. When we claim it is a carbon neutral field, as it is termed since no greenhouse gases are expected to be released by it during its existence where you can start using agricultural waste around you. You may gather your field directly from your own backyard and store it in a safe for use in your boiler. You briquette it, fail at it, or use it as fuel. So you continue to use that renewable form that keeps you competitive. In response, Sanjiv emphasises the importance of cost. However, increased worldwide coal prices have significantly aided the aforementioned reality. To survive, you must be the cheapest operator, generating the cheapest power and estimating the cheapest. As a result, the performance challenge will continue to focus on economic, social, and environmental norms, which will continue to evolve and become more severe as the day progresses and we experience scorching summers.

Akilur emphasises the need of modelling and real-time analysis in preventing the situation from deteriorating further. In power systems, for example, we have this sort of network system and real-time analysis. I’m convinced this can be done in real time, given what might happen if coal isn’t provided to plants owing to manufacturing, the supply chain, vehicles not being available, or even when we import coal, the rupee value, which can also have an influence. “I believe that all of these events can be modelled and analysed. Perhaps the government can come up with something, particularly in terms of critical infrastructure. They should look towards systems for modelling, analytic, and impact analysis. If anything is happening, create scenarios and then do this “, explains Akilur.

Kashish Shah comments on the state of coal mines, saying, “To relieve pressure on the railways, several coal links between mines and plants have been rationalised during the past few years to optimise coal supply.” However, railways are still under pressure to manage passenger freight vs coal freight on the same lines. 

Preventives measures 

CCAI has now sought urgent support in providing relief to beleaguered coal buyers in the country, many of whom have been compelled to idle their captive power plants in the absence of sufficient supplies. Citing the example of exorbitant auction prices, Further to this, soaring bid prices had prevented multiple industries from participating in the auction. Many of them have now resorted to drawing expensive power from the exchange while nearly idling their captive power plants, consequently increasing power demand and tariffs even further. According to CCAI, this practice was resulting in heightened system inefficiencies across the country’s Captive Power Plant (CPP) infrastructure.

The supply chain, rather than availability, is a significant issue in transporting coal to the plant.
Akilur Rahman, Chief Technology Officer, Hitachi Energy 

Even if we could generate significantly more electricity, many of our power plants lack the capacity to store the generated energy.
Bharat Sharma,  AVP, PTC India Ltd 

To survive, you must be the cheapest operator, generating the cheapest power and estimating the cheapest.  Sanjiv Prasad, Vice President and Plant Head for Power & Utilities – Reliance Industries Ltd, DMD 

With the de-nationalisation and more private participation, we expect the energy situation to improve.  Vinit Priyadarshi, Account Manager,  Operating Asset Solutions Portfolio – Black & Veatch