The Coal Question

Solely depending on the Union Government for coal supplies and with no import possible, Tamil Nadu’s power utility, Tangedco, is managing to keep the thermal power plants running on a daily basis. Keeping in mind the nightmares of load-shedding from a decade ago that dethroned it, the ruling DMK has its task cut out before the next summer

Updated - October 17, 2021 02:54 am IST

Published - October 17, 2021 12:58 am IST - CHENNAI

Coal shortage in the country has made the headlines recently with a few States enforcing load-shedding leading to the panic situation. While Tamil Nadu is not facing any coal shortage, the stock is a matter of concern for the State power utility, Tangedco, prompting officials to request the Union Power Ministry to increase coal supplies.


A senior official of Tangedco says the utility has almost been pushed to a hand-to-mouth existence. The State, which was receiving 40,000 tonnes of coal last week, is getting 50,000 tonnes this week. The 50,000 tonnes is just enough for the operation of the three power stations at North Chennai, Mettur and Thoothukudi. These stations consume around 52,000 tonnes daily to produce 4,320 megawatts. With the limited supply, Tangedco has been able to produce 3,000 megawatts-3,500 megawatts daily from these plants.

Though the State has wind and solar and non-polluting gas plants that account for 42% of the total installed capacity of 32,595 MW, thermal power has remained the staple for electricity officials to power up the State, especially to meet the peak demand in the morning and the evening. The short supplies from the coal mines has created a piquant situation for Tangedco officials. In the recent past, the State has not faced the situation of having coal stocks for 4-5 days against the mandated limit of 9-10 days. The State had stocks for 15 days last year.

Officials have a reason to worry. The wind season is coming to an end. The peak power demand this year has been in the range of 13,000 MW to 14,000 MW, a tad above the levels in the previous years. Usually, the power demand in October will be around 12,000 megawatts. The State recorded an all-time high demand of 16,845.50 megawatts on April 10 and the highest consumption, at 9,372 million units, on April 9 this year.

Since coal shortage started in the last week of September, the Union Power Ministry has been conducting weekly meetings with officials of the State power utility, along with various stakeholders, including Coal India and Southern Railway, to increase the coal supplies and take stock of the position on a day-to-day basis. “The Power Ministry has been steadily increasing the coal supply from 45,000 tonnes to 60,000 tonnes a day, and this has helped to maintain the average stock for four to five days,” said Tangedco CMD Rajesh Lakhoni. “We are also requesting the Power Ministry to increase the supply to 1 lakh tonnes.”


Once the northeast monsoon sets in, Tangedco expects the electricity demand to fall further, helping it ramp up the coal stock. The power managers are happy that such a situation did not happen during the April-June period when the peak load would be in the order of 16,000 MW. The State had witnessed a major power crisis more than a decade ago. The officials say the Union Government’s decision not to allow the State utilities to import coal is not helping.

Tangedco stopped importing coal after the Union Government issued guidelines in 2020, stating that 750 lakh tonnes of domestic coal was available in compensation for the end to imports. With no imports, Tangedco officials entirely depend on indigenous coal. This explains the current situation.

Meanwhile, retired electricity officials want Tangedco to speed up the exploration of the Chandrabila coal block and get permission from the Union Government for importing coal from Indonesia. While the State has been requesting the Union Government for more coal, the Power Ministry has been asking it to take additional coal from the Central generating stations. But the supply to the Central generating stations is poor, the officials say. Worse is the position of private power generators who use imported coal. Private power generators have stopped producing electricity. This is forcing the officials to purchase power from the exchange.

Tangedco, which has tied up with private generators for purchase of 2,830 MW in the long term, received only 800 MW-850 MW in the past one week. This forced the utility to buy nearly 3,000 MW from the exchange during peak hours.

The Central power generating behemoth Neyveli Lignite Corporation (NLC), which operates thermal plants with a capacity of more than 2,000 MW, including NLC Tamil Nadu Power Limited (NTPL), has been assuring Tangedco that a sufficient stock was available to meet the requirements of NLC plants with excess coal being supplied to NTPC.


An NLC official said that NTPL, a 1,000-MW coal-based plant in Thoothukudi, requires around 12,000 tonnes of coal every day, and there are no worries as coal is supplied from the Talabira II and III blocks in Sambalpur, Odisha. The two blocks were allotted to NLCIL by the Union Government on May 2, 2016, under the Coal Mines (Special Provisions) Act, 2015, for optimum utilisation of collieries for the plants such as the Neyveli Talabira Thermal Power Plant (NTTPP) and NTPL. However, given the high demand for coal, the NLC is going all out to augment coal production to 1 metric tonne per annum from the current year and up to 20 metric tonne per annum from the next year. This will not only secure the supplies to the plants but also make coal available in the market, the official say.

Tangedco has been suffering from poor coal supplies for several years, and owing to the delay in the linking of new coal blocks for fuel supply agreements. Confirming the allotment of the Chandrabila block to the State, a Tangedco official said the block was in the ‘exploration’ stage. Sources say the block has not been “renewed” by the Union Government.

The Ministry of Coal had allocated the Chandrabila block to Tangedco in February 2016. Tangedco also signed a coal block development and production agreement with the Ministry of Coal in March 2016 for mining a total area of 9.32 sq km. However, as a portion of the mine is in the forest area, Tangedco has not been able to get environment clearances, sources said.

Every year, there has been a shortfall in coal supplies from the Indian companies. The Ministry of Coal and the Ministry of Power have been requested to instruct Coal India to arrange the supply of the agreed quantities of coal to the State utilities. Though the State has renewable energy in the form of wind, solar and non-polluting gas plants, the electricity officials have always treated wind as an “infirm” energy and solar as unfit to meet the peak hour demand. Gas is costlier.

Analysts feel wind energy has not been tapped fully. Vibhuti Garg, energy economist, Institute for Energy Economics and Financial Analysis, says the State with a huge potential of wind energy has not utilised it properly. Though the State is still leading in wind energy, the wind turbines, installed several years ago, have not been re-powered. If the turbines are replaced with the better designed and more efficient ones, wind energy can increase even further. This is better than purchasing costly power from the exchange. She suggests that the State invest in battery storage because the cost of the batteries is likely to reduce in the next few years and increase the hydro storage for tapping hydroelectric power.

S. Gandhi of Power Engineers’ Society of Tamil Nadu says that until the State Government takes steps to restore coal imports at the earliest, the thermal power plants will have a tough time before April next. The cost of imported coal has increased from $60 to more than $250. The electricity officials have to import coal from Indonesia once the price comes down drastically; otherwise, the State may witness load-shedding again next summer.

( With inputs from S. Prasad in Cuddalore )

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