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Tamil Nadu’s tryst with imported coal ends on happy note.

Date: 10-12-2016
Subject: Tamil Nadu’s tryst with imported coal ends on happy note
Tamil Nadu Generation and Distribution Corporation (Tangedco), a subsidiary of Tamil Nadu Electricity Board (TNEB) has signed an MoU with Singareni Coal Mines to procure high grade coal for its thermal units. The first set of consignment reached Mettur Thermal Station recently. The MoU marks the beginning of the import substitution of coal and in another three months, Tangedco plans to put a stop to the total import of coal.

The development also brings down the curtain on the coal import saga in the state in which there were allegations against the late AIADMK chief J Jayalalithaa during her first regime (between 1991-96). She was eventually acquitted in the case by the Supreme Court. Import substitution will also help Tangedco save not less than `400 to `500 crore and with this, the company may even break even or show a minimum profit at the end of this financial year.

"We signed an MoU with Singareni Coal Mines for the supply of high grade coal to the extent of 1 million tonne. The first consignment from Singareni reached Mettur Thermal Plant directly by rail. This quantum of supply from Singareni will continue for the current financial year. For the next fiscal year, we will require a coal supply between 3 or 5 million tonnes, depending upon the demand," a senior Tangedco official told TOI.

TNEB and its holding company, Tangedco started importing coal on a regular basis from 2004-05. "Tangedco requires about 26 million tonnes of coal for full capacity generation of power by the North Chennai, Mettur, Ennore and Tuticorin thermal units. Out of the total requirement, about 20.445 million tonnes is met by indigenous coal and the balance 5.50 million tonnes is being imported," said a Tangedco coal wing official.

The imports started at 1 million tonne but as the demand for power increased and more thermal units were commissioned, the amount of coal imports also escalated. "We started importing coal after the Centre in its order on March 29, 2004 advised states to go for import to feed its thermal units due to a shortage of indigenous coal," said the official.

But on September 28, 2016, Coal India Limited requested Tamil Nadu government to advise Tangedco to stop importing coal and substitute it with indigenous coal available from CIL. "Following this the Union ministry of coal convened a meeting in New Delhi on September 30, where CIL in principle agreed to provide additional 5 million tonnes to Tangedco whenever it needs the entire quantity," the official added.

Tangedco was importing coal mostly from Indonesia and occasionally from China, Russia and South Africa. "The imported coal is downloaded either at Ennore Port or at Tuticorin Port and all thermal units, except the Ennore Thermal Plant, uses imported coal. The imported coal is of high calorific value and it reduces damage or frequent tripping of our units both with low and high capacity," the official said.

But, coal from Singareni has an equally high quality as the imported coal and is available at a lower price too. "At present we are paying $60 per tonne but from February next year, the price will be $90 per tonne. In this case, it is advantageous for us to use indigenous coal," he added.

Source: timesofindia.indiatimes.com

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