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MoEF deadline on ash content -- Blending thermal coal the answer?

C. Chandramouli

A STUDY commissioned by the World Bank in 1998 estimated that, at present levels, by 2014-15, India's power sector would be producing roughly three times the ash it was producing and the ash disposal facilities around power plants would require land in e xcess of 1,000 sq. km. It also cautioned that other environmental impacts would be adverse.

To reduce the severe environmental impact predicted by not only this but a number of other similar studies, the Ministry of Environment and Forests (MoEF) has made it mandatory for thermal power stations located 1,000 km away from pitheads and other envi ronmentally-sensitive areas to use coal with ash content not exceeding 34 per cent from June 1, 2001. This has triggered a search for clean coal technologies not only to meet the deadline but also be cost-effective for the utilities.

Washing of indigenous coal, import of raw coal and blending are the three methods to meet the standards set by the MoEF. Without going into the relative merits of the methods, it would be sufficient to note that given the state of preparations on ground, washing does not seem to offer any hope to meet the time-limit. Blending and import of raw coal are, therefore, the only available options in the short term.

Blending: Blending is largely a mechanical process. It essentially involves the mixing of good quality coal having low ash-content with poor quality coal having high ash-content so that the aggregate mixture has an ash content of less than 34 per cent. T his blending can be done either at the pithead, power station, or any other convenient location. The question is the availability of raw coal of the required characteristics and the logistics of transporting the different grades of coal required for the blending process.

India is the third largest coal producer after China and the US with estimated reserves of 2,08,751.89 million tonnes. Thus, in quantitative terms, the reserves are enough to meet the demand. Quality, however, is an area of concern. The quality parameter s of coal used in the power sector ranges between 25 per cent and 55 per cent ash content; 4-7 per cent moisture content; 0.2-0.7 per cent sulphur content; gross calorific value of 3,100-5100 Kcal/kg and volatile matter of 20-25 per cent. These are broad bands with individual power stations getting better/poorer quality. The availability of good grades of coal with high calorific value and low ash within the country is limited to certain coal mines in Eastern India, where underground mining is resorted to. The quantities available for blending has to be carefully assessed along with a techno-economic assessment of the logistics of transporting the coal. The present levels of production do not indicate that there is enough quantity to meet the demands o f the entire power sector within the limited period available.

Logistics: In India, rail, sea and road routes are used to transport coal. Often, a combination of routes is resorted to. The Railways carries around 200 million tonnes of coal annually, accounting for nearly 50 per cent of the total traffic throughput. Coal comprises around 15 per cent of the traffic in ports. A bulk of the thermal coal is handled by the east coast ports of Haldia, Paradip, Vizag, Chennai and Tuticorin. Long-haul movement of coal by road is not very significant though short hauls are c ommon.

At present, the linkages of thermal coal to power utilities is determined by a Linkage Committee, consisting of officials from the Ministry of Coal, Power, Railways, CEA and power utilities. In the light of the latest requirements of blending coal, this committee will have to undertake a comprehensive exercise to reassign the linkages . Some of the important issues that will have to be kept in mind while conducting this exercise are highlighted below.

Coal companies: The primary responsibility of supplying adequate quantities of high-grade coal required for blending is on the coal companies. Coal India is the monopoly supplier of thermal coal. Recent policy initiatives have allowed private operators t o mine coal. The restrictions on the import of coal have also been removed. However, in the limited time-frame, it is unlikely that the private mines will be able to supply any significant quantities of high-grade coal.

Import is, however, a short-term alternative. The complexities involved in import are too many and given the immense reserves and the strategic considerations of the power sector, this can never emerge as a long-term alternative. That leaves the ball fir mly in the court of the public sector coal companies. The basic issue that needs to be resolved is that on legally enforceable commercial fuel supply agreements. With the regime of price control and fixation dismantled, this aspect would assume greater s ignificance. Whether there should be long-term contracts or spot-market purchases or a combination of both, is the prerogative of the consumer. What is important, however, is that the supply should be assured and contracts respected. The fuel supply agre ement would be comprehensive and cover sampling/testing procedures, weighment, bonus/penalties, dispute resolution mechanisms, and so on.

Railways: The availability of rakes in the various sectors would must be assessed and appropriately redeployed. Capital investment in rolling stock would also have to be planned. Enhancement in the line capacity, especially in the eastern sectors from wh ere the high grades of coal will have to be moved, also needs to be considered. Loading and unloading, including siding arrangements at the pithead as well as the railway/port ends, will have to be modernised so as to prevent traffic bottlenecks.

Weighment would have to be given serious consideration. Upgradation of the in-motion weighbridges would be required to avoid delays and disputes. Yet another area requiring attention is sampling and testing facilities. As several agencies are involved -- coal companies, the Railways, utilities -- rigorous protocol would have to be worked out to prevent wrangles. The introduction of third-party agencies for carrying out these functions as well as a proper dispute resolution mechanism would go a long way in making the process smooth. Finally, the possibility of evolving legally enforceable commercial fuel transportation agreements would have to be pursued actively. This would involve amendments to the Railway Act.

Ports: The Haldia, Paradip, Vizag, Chennai and Tuticorin ports handle almost all the thermal coal that is transported by the sea route. Of these, the first three are primarily load ports, while the last two are discharge ports. Haldia suffers from the pr oblem of poor draft in the river Hooghly. Large-sized vessels cannot be loaded at this port. But since the high-grade coal from the eastern coalfields is loaded at this port, this problem has to be tackled expeditiously. The Paradip port has no draft pro blem and the handling system has also been modernised under an ADB-assisted project. However, this port, which largely caters to the Mahanadi coalfields, is handicapped due to poor railway infrastructure. The enhancement of track capacity, involving doub ling of lines as well as the construction of a few major bridges, has to be addressed on a priority basis.

The Vizag port has no inherent difficulties except that the feeder coalfields are at a distance. This makes movement of thermal coal through this port less economical. Chennai and Tuticorin are almost totally dedicated to the Tamil Nadu Electricity Board . Only a small portion of the coal handled at these two ports are for outside consumption. At present, there is a shortage of berths in the Chennai port, resulting in delays. The shore handling equipment is also outdated. However, with the new port comin g up at Ennore, these problems are expected to be resolved.

In the short term, the Haldia port would have to be used for high-grade coal and Paradip/Vishakapatnam for low-grade indigenous coal. The blending could be taken up at the ports of Paradip and Vizag or at the utility end. The techno-economic feasibility of this has to be worked out at the earliest. All the ports can easily handle imported coal also.

If the deadline of June 1, 2001, set by the MoEF, is to be met, blending of coal is definitely a viable option. However, coordinated action is required from the Ministries of Coal, Railways, Surface Transport, and Power and its utilities. Fuel supply and transportation agreements are crucial in this regard. Linkages will also have to be reworked keeping in view the techno-economic feasibility of blending coal for each power utility. The task involved is heavy and the target date not so far away. All the players will have to get into mission mode to meet the deadline.

(The author is Director of Census Operations, Government of India, Chennai. The views expressed are personal.)