NTPC preparing to meet rise in coal, gas demand - Need 270-280 million tonnes of coal annually by the end of the 12th Plan

State-run NTPC, on a massive capacity addition programme, says it would need 270-280 million tonnes (mt) of coal annually by the end of the 12th Plan (2017). It used 150 mt last year.Around 70 per cent would be met from domestic sources, another 20 per cent through its mines and the remaining 10 per cent through imports.

It would rely on domestic sources, long-term and fallback arrangements for regassified liquefied natural gas (RLNG) and spot RLNG. NTPC requires around 17.35 million metric standard cubic metres per day (mscmd) of gas for running plants of 3,650 Mw capacity at a load factor of 90 per cent. It has tied up for supply of 15 mscmd and was meeting the gap through spot RLNG.

Chairman and managing director R S Sharma told , "While focusing on rapid capacity growth plans, NTPC is also aware of the issues and challenges of making available the fuel for its power plants. We have conceived and initiated an array of strategic fuel security measures."

He said the aim was to raise the 32,000 Mw capacity to 51,000 Mw by 2012 and 75,000 Mw by 2017.

On domestic supply, Sharma said Coal India Ltd (CIL) would remain NTPC’s main supplier. A supply agreement has been signed with the subsidiaries of CIL for almost all operating stations.

"The agreement provides for supply/off-take at 90 per cent of ACQ (Annual Contracted Quantity) for determining incentive/penalties, which are like mirror images on either side of the 90 per cent trigger level."There is additional tie-up for supply through agreements with CIL and Singareni Collieries for critical stations, particularly Farakka and Kahalgaon. NTPC was also procuring coal through e-auction for critical stations.

It has ventured into mining and got six coal blocks from the government, including two to be developed by a joint venture company with CIL. Production will start by 2012. "By 2017, NTPC targets to have coal production of 47 mt per annum from these mines. Our target is to meet 20-25 per cent of coal requirement through our own production after 2017," Sharma said.

Adding: "NTPC is also looking at options of securing coal mines overseas. We are currently exploring opportunities in countries like Indonesia, Mozambique, South Africa and Australia. Besides International Coal Ventures Pvt Ltd (ICVL), the JV company between NTPC, RINL, SAIL, NMDC and CIL, is currently examining some proposals in USA, Indonesia and South Africa. NTPC has also established a joint venture company, NTPC SCCL Global Ventures Private Ltd, with Singareni Collieries Company Ltd for coal mining in India and abroad."

Sharma said NTPC had renewed agreements for supply of the administered price mechanism (APM) and Panna Mukta Tapi (PMT) gas till 2021 and 2019, respectively. It was allocated 4.46 mscmd gas from reliance’s Krishna-Godavari D-6 block, of which 2.3 mscmd has already been contracted and the rest will be soon. It has long-term agreements with GAIL India for supply of RLNG and fallback agreements with IOCL, BPCL and GSPC.

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