India's NTPC to Retrofit Thermal Power Plants to Enable Blending of Imported Coal

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Researched by Industrial Info Resources (Sugar Land, Texas)--NTPC Limited (BSE:532555) (New Delhi), a leading Indian public-sector energy utility, has announced plans to retrofit its existing thermal power plants. This move will enable the company to increase its blend of imported coal to 30%. Presently, the company is able to blend only about 10% to 15% of imported coal in its power plants. Sources have indicated that increasing the imported coal feed could lead to a bursting of the boilers. The existing boiler technology does not permit usage of more than 15% of high-calorific coal. Globally, power producers are resorting to the retrofitting of power plants, which assists in augmenting or replacing existing electricity-generating components with advanced, clean and energy-efficient equipment.

According to Arup Roy Chowdhry, chairman of the Standing Conference of Public Sector Enterprises (New Delhi), increasing the blend of imported coal, which will have low ash content and higher calorific value, will provide higher fuel and operational efficiencies and assist in reducing the carbon footprint. Amid domestic coal shortages, NTPC Limited is scouting for coal assets in Indonesia, South Africa, Mozambique and Australia. Chowdhry indicated that the company was open to the direct acquisition or purchasing of assets through joint ventures. However, the use of imported coal for domestic power generation could lead to an increase in retail power tariffs in the future. Presently, NTPC Limited has signed an agreement with Coal India Limited (CIL) (Kolkata, West Bengal) to procure 130 million tons per year of coal. NTPC is likely to import 13 million to 14 million tons per year.

Efficient coal usage has become critical after a report released by the Central Electricity Authority (CEA) (New Delhi), India's energy regulatory body, revealed the precarious coal supply scenario in the country. As of November 15, 2010, nearly 29 coal-fired power plants had feedstocks of less than seven days. Of these, about 19 power projects had supplies of less than four days. Blending domestic coal with high calorific imports is emerging as the best alternative to meet growing fuel demand. The government also has issued a directive to Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi) to design and develop new boiler technologies, which will enable the use of larger quantities of imported coal. India is also expected to sign a memorandum of understanding with Japan Coal Energy Center (Tokyo, Japan) to seek technical and financial assistance for the retrofitting of existing thermal power plants.

In a related development, NTPC Limited has submitted a request to the Ministry of Environment and Forests seeking approvals for the Hurra-C and Chuperbita mines, which have been classified as "no go" areas. The ministry has revoked licenses for some mines, citing environmental concerns. NTPC's Dulanga coal block also falls under this category. The company has been allotted six mines, including Brahmani and Chichro Patismal mines in Orissa; Pakhri Barwadih, Kerandai and Chatti Bariatu in Jharkhand; and Talaipalli in Chhattisgarh. Recently, NTPC Limited was among the six companies to receive notices from the coal ministry seeking reasons for a delay in the development of the Chatti Bariatu mines. The ministry sought clarification for a delay in operations at the mine, which was allotted for captive use in 2007.

NTPC Limited, which has an installed power-generating capacity of 32,694 megawatts (MW), operates eight gas-based and 19 coal-based power plants. In the background of coal supply shortages and a growing domestic electricity demand, the company is focusing on the development of renewable energy projects. Recently, NTPC Vidyut Vyapar Nigam Limited (New Delhi), a fully owned subsidiary, invested $1.53 billion in solar power projects with a combined capacity of 479 MW. The projects, which will use concentrated solar power (CSP) technology, will be part of the government's Jawaharlal Nehru National Solar Mission program.

NTPC Limited has selected seven companies, including KVK Energy (Hyderabad, Andhra Pradesh), Megha Engineering and Infrastructures Limited (Hyderabad), Reliance Power Limited (BSE:532939) (Mumbai), Lanco Infratech Limited (BSE:532778 ) (Hyderabad) and Godawari Power and Ispat Limited (BSE:532734) (Raipur, Chhattisgarh) for these projects. While KVK Energy, Reliance Power Limited and Lanco Infratech Limited will develop 100 MW solar projects each, Godawari Power and Ispat Limited and Megha Engineering and Infrastructures Limited will construct projects with capacities of 50 MW each. The projects will be in Andhra Pradesh and Rajasthan.

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