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1 (FUEL MANAGEMENT),NTPC
COAL SECURITY FOR POWER SECTOR BY T K CHATTERJEE EXECUTIVE DIRECTOR (FUEL MANAGEMENT),NTPC NTPC Limited

2 SYNOPSIS OF THE PRESENTATION
Power Sector Overview in India. World Coal Scenario . Domestic Coal Scenario . NTPC’s Coal strategy

3 INDIAN POWER SECTOR 3

4 Growth of installed capacity
(MW) NTPC started adding capacity in 1982 Excluding MW Captive Generating Capacity connected to Grid (2010)

5 Power Infrastructure in India (As on Nov’10)
Fuel wise break-up (MW) Sector wise break-up (MW) Thermal 108602 64.0% Coal 89778 53.6% Gas 17624 10. 5% Diesel 1200 0.7% Hydro 37328 22.3% Nuclear 4560 2.7% Renewable 16787 11.0% TOTAL 167277 100.0% (Excluding captive capacity of MW connected to grid ) (Source-CEA) 5

6 DURING 2009-10, PEAKING SHORTAGES WERE 12.7%
A deficit scenario persists Billion Units 10.1% 11.1% 9.9% 9.6% 8.3% 8.8% 7.3% DURING , PEAKING SHORTAGES WERE 12.7%

7 Projected Capacity Requirement
6.2% 778 GW 6.8% 10.8% 425 GW 220 GW 132 GW CAGR 7.3% Key Imperatives: Attract investment in power sector Ensuring matching fuel availability Add additional manufacturing capacity Effective project management Source: Integrated Energy Policy GOI

8 Coal is the only proven source of Thermal Power Generation
Reserves : 271 Billion Tonnes Proven category : 110 Billion Tonnes Nearly 87% of the total reserves are thermal coal LIGNITE Reserves : 38.9 Billion Tonnes Proven category : 4.8 Billion Tonnes NATURAL GAS Proven Reserves : 1.12 TCM 78% domestic coal production is used for power generation Coal is going to be the main source of power generation in the country for at least next years Source: Geological Survey of India, MOPNG

9 12th Plan Capacity Addition
FUEL MW THERMAL HYDRO NUCLEAR TOTAL 85000 16360 4800 106160

10 Meeting the Demand of coal
Indian Economy provides robust demand of coal National coal companies will not be able to meet the coal demand. Government of India is allocating captive coal blocks to match the rising demand. About 10% of coal required by India is being met by imports. Roughly 50% of total imports are contributed by coking coal. The setting up of the Coastal Ultra Mega Power Projects (UMPPs) based on imported coal has also been started.

11 COAL AVAILABILITY SCENARIO IN THE WORLD

12 WORLD COAL FACTS World has - 700 BT of proven thermal coal reserves.
Majority in USA,RUSSIA,CHINA & INDIA Proven world reserve of thermal coal could sustain current demand for over 140 years. (Assuming thermal coal reserves drawn down at current rate of production of 5.0 BT/Year).

13 World Coal Scenario Top Ten Coal Producers in the World in 2009-10
PR CHINA 2971 MT USA 919MT INDIA 526 MT AUSTRALIA 335 MT SOUTH AFRICA 247 MT RUSSIA 229 MT INDONESIA 263 MT KAZAKHSTAN 96 MT POLAND 78 MT COLUMBIA 73 MT

14 Brief Analysis of coal facts
There is a significant increase in coal consumption of about 41% during the period against previous 10 years period during which was about 16%. There is a steady increased demand of coal in Asia Pacific Region due to growing economy in India and China. The demand of coal in other parts of the world is declining.

15 DOMESTIC COAL SCENARIO

16 Coal Reserves in India (as on 01-04-10) Billion tonnes
Proved Indicated Inferred Coking 18 14 2 Non-Coking 92 109 36 Total 110 123 38

17 RAW COAL PRODUCTION IN INDIA
Growth of coal production is 6-7% whereas demand for electricity has been growing at an average growth rate of 7% to 8% and demand supply gap has widened over the years.

18 Coal Producers in India in 2009-10
CIL 431 MT SCCL 46 MT CAPTIVE 33 MT OTHERS 16 MT TOTAL 526 MT

19 COAL REQUIRMENT, AVALIABILITY AND IMPORT DURING XI PLAN FOR THE POWER SECTOR (Fig IN Million Tonnes)
Sl.No. Details a) Indigenous coal requirement 434.0 488.0 b) Requirement of imported coal for imported coal based projects 10.0 19.0 c) Total coal requirement 444.0 507.0 d) Indigenous coal availability from:- CIL 335 360 ii) SCCL 32 iii) Captive mines 21 22 e) Total availability of indigenous coal 388 414 f) Shortfall in indigenous coal availability (a-e) 46.0 74.0 g) Requirement of imported coal to meet the shortfall in indigenous coal availability 30.7 49.3 h) Total requirement of imported coal (b+g) 40.7 68.3

20 REASON FOR COAL SHORTAGE
Growth in the coal sector not commensurate with nation’s requirement of +8% GDP growth. Slow clearance of projects. In some cases linked mines are yet to be developed even though the power projects have been implemented on schedule. Captive blocks are way behind schedule. Import coal materialization is less due to bottleneck in the ports and Railway

21 REASON FOR DELAY IN DEVELOPMENT OF COAL BLOCKS
Forest clearance for exploration. Most of the captive coal blocks are unexplored and need forest clearance before commencement of exploration. Environment and Forest clearance for the Coal mines. Delay in granting prospecting license. Land acquisition. Rail transportation of coal.

22 Coal Availability vis-a vis Govt. Policy
NCDP 2007 ensures 100% satisfaction level for the power utilities and supply through legally enforceable FSA. Annual action plan for coal production by CIL, the major coal producer of INDIA, projected supply demand mismatch anticipated in the terminal year of XIth & XIITH plan to the tune of 234 MMT & 185 MMT respectively. This supply demand mismatch hindering the policy implementation. For new projects, guaranted quantity of supply is to the extent of 50% of the ACQ/Linkage achieving 45% PLF.

23 Coal Availability vis-a vis Govt. Policy
This gap in policy and its implementation likely to discourage power developer. There is an urgent need to synchronize coal based thermal capacity addition and capacity addition for the coal production. With the prospect of accelerated nuclear capacity addition programme existing planned thermal coal based capacity addition need to be reviewed.

24 The Way Forward Country’s Power generation plans are at the cross roads of growth and poised for a quantum leap. Matching progress required in the coal sector through creation of enabling policy environment.

25 The Way Forward In the deficit scenario of coal, Government would have to create an enabling policy environment to facilitate – Greater domestic/captive production, CIL/SCCL to ensure total coal requirement (including import) for the power sector as per NCDP. Encouragement of setting up new power plant at coastal area with imported coal.

26 The Way Forward Ports to be identified with power project for import/coastal cum riverine transport. There must be some integrated clearance for both coal linkage as well as movement clearance to power utilities. Supply of sized coal to power utilities. Incorporation of rapid loading system at each and every siding/mines of the coal company.

27 Measures to Beef up production
From Existing Mines : Adaptation of modern technology to increase productivity. To increase the availability of the major HEMM ( Shovel, Dumper, Dragline, Dozer etc.). The rapid depletion of shallow reserves calls for exploitation of deep seated reserves through efficient technology. This can be done by inviting international players with state-of-the-art technologies.

28 Measures to Beef up production
From Upcoming Mining Project : Time frame clearance of coal mining projects. Up front forest and environment clearance Allocation of more coal blocks to private players/ end users with strict deadlines and steep penalties for failure. A special purpose vehicle (SPV) may be set up initially to take care of all regulatory clearances, which is then transferred to the Mine developer

29 Coal Supply Scenario in NTPC

30 NTPC - An Overview 20 Coal Based and 8 Gas Based Projects Current Operating Capacity– 33,194 MW (Including JV of 3,364 MW) 15,740 MW Under Construction Largest generator in India contributing about 28% of India’s generation with nearly 18% of capacity.

31 Operational Excellence
No.1 in Capacity Utilization globally Six plants operated at PLF of >95% Dadri Stage-I achieved highest ever PLF of % Gas stations registered highest ever PLF of 78.38% PLF OF COAL STATIONS NTPC 1994 NTPC 2010 All India 2010 NTPC coal stations achieved PLF of above 90% for 3rd consecutive year 31

32 COAL SUPPLY TO NTPC STATIONS

33 By 2032, NTPC targets a capacity of 128 GW with 28% capacity from non-fossil sources
2010 ~ 33 GW 2032 ~ 128 GW Basket of projects Coal Gas Nuclear Hydro Renewables Figures in MW * FR approved for XII Plan / XIII Plan 33 PPA signed for ~100,000MW

34 NTPC to become 1,28,000 MW Company by 2032
NTPC Coal requirement going to be increased multifold : Year Coal Based installed capacity (GW) Coal Requirement (MT) 31.9 172 35.4 191 37.4 201 39.7 215 46.2 231 54.9 272 62.3 322 71.5 367

35 Short Term Strategies Import of coal E-Auction
Tie up through MOU at premium price. To take up with CIL for finalization of FSA for new units at 90% commitment level Transportation of coal through Inland Waterways at Farakka/Kahalgaon/Barh NTPC may contemplate handing over their own fleet of wagons to Railways for increased coal movement

36 SUPPLY THROUGH ACQ/LOA
Supply & Import Projection of NTPC Stations (Till ) YEAR Demand (MMT) ACQ Supply (MMT) LOA** (MMT) SUPPLY THROUGH ACQ/LOA (MMT) Captive Supply (MMT) Supply thro E-Auction/MoU (MMT) DEFICIT (MMT) IMPORT (MMT) BLENDING (%) 172 125* 15 140 10 22 9 191 125 27 152 5 12 8 201 34 159 17 11 6 215 44 169 26 4 231 49 174 35 14 272 58 183 43 38 25 *CIL – SCCL – 10.2 **Assuming coal availability through LOA at 70% PLF level. 36

37 Inland Water Transport(IWT)
NTPC has agreed for transportation of coal through IWT mode to the extent of 3 million tonnes (1 million tonne for Farakka and 2 million tonnes for Kahalgaon) per annum for a period of 7 years. A joint committee consisting of NTPC and IWAI has been constituted to finalize the modalities of Project Implementation. Back

38 Ganga- Bhagirathi-Hooghly National water way No-1
Kahalgaon Barh Farakka

39 Medium Term Strategies
Development of captive mines allotted. Acquisition of assets (Domestic and abroad).

40 Coal Production Projection – Captive mines
Name of Block End-Use Project Mineable Reserves (MT) Ultimate Capacity (MTPA) Tentative Coal Production (MTPA) $ PB Shortfall in Lara+Darlipali 503 15 2.00 5.50 8.50 11.50 15.00 CB + CB(S) Barh-II, Tanda Expn. 148.68 7 1.00 3.00 5.00 7.00 KD 142.01 6 4.00 6.00 DL Darlipali 194.97 2.50 4.50 TL Lara 848 18 1.50 8.00 13.00 Total 1837 53.00 26.00 37.00 48.00

41 Coal Mine acquisition abroad
NTPC is exploring options for acquisition of coal mines in Indonesia, Australia, South Africa and Mozambique Due diligence to coal in Indonesia is going on ICVL – JV of NTPC, SAIL, RINL, CIL and NMDC has also been entrusted responsibility of thermal coal mine acquisition abroad. CIL is also exploring options of acquisition of coal mines abroad. NTPC is in discussion with CIL

42 Planning Long term Coal Security
Three Options exist for planning for long term coal security: Option 1 Option 2 Option 3 Procure Low GCV coal so as to allow higher proportion of blending Issues of Infrastructure bottleneck: Railway transport bottleneck Higher volume of coal import Port Infrastructure bottleneck Take part in Port Infrastructure Development and seek Railway support for transport of higher volumes Retrofit existing boilers and change specifications of new boilers so as to allow for higher GCV coal usage Impact on cost of generation High Expenditure of retrofitting Issues of high costs Stations where retrofitting needs to be done is to be evaluated Long term coal security Coastal based projects running fully on imported coal Strategy Tariff calculations? (pass-through) Choosing projects to be relocated Issues Coal pricing may be linked to CERC index or global coal indices Older projects of XII plan could be relocated Remedies 42

43 ENABLERS FOR COAL SOLVENCY
Sourcing of coal by optimizing portfolio mix.( Domestic/Import/Captive/Acquiring Mines abroad etc). Uninterrupted Transportation System (MGR/IR). Well equipped unloading system at station end with sufficient redundancy.

44 Thank You Disclaimer: The views expressed in this presentation are exclusively of the presenter, not necessarily of the Management of NTPC Ltd.


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