Tangedco forced to import coal due to insufficient supply by Centre

Handling of coal has been a sticky point for Tamil Nadu Generation and Distribution Corporation, (Tangedco) even with its lower thermal capacity. The coal allocated to TANGEDCO by the Union Coal Ministry is not enough and it is forced to import coal, mostly from Indonesia. The thermal units in Mettur and North Chennai blend the local and imported coal to generate power.

Tangedco’s total demand for coal for a thermal capacity of 4320MW is 26 million tonnes of coal. “It requires 26 million tonnes of coal for full capacity generation of North Chennai, Mettur, Ennore and Tuticorin thermal units. Of this, 20.445 million tonnes of coal are met by indigenous stock and the balance 5.50 million tonnes is being imported,” said a Tangedco coal wing official.

Tangedco started importing coal regularly from 2004-05. The imports started at 1 million tonnes but as the demand for power increased and more thermal units were commissioned, the amount of coal imported also increased. In 2016, Coal India Limited (CIL) requested Tamil Nadu government to advise Tangedco to stop imports and use indigenous coal available with CIL.

But the very next year, the Centre asked the distribution companies (Discoms) to import coal due to its shortage as the demand for coal increased across the country. Thus, Tangedco has been depending on imported coal to meet its demand for its thermal units.

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There are not less than 5000MW of thermal projects which are in pipeline and unless more coal blocks are allocated to Tamil Nadu, the dependence on import coal will increase. Tangedco had to spend more on local coal after the Centre laid a green cess due to which the extra expenditure increased to by Rs 400 crore.

The latest Comptroller and Auditor General (CAG) report had criticised Tangedco for lower quality of coal due to which more fly ash is struck in various thermal units.

“Tangedco suffered generation loss of 844 million units valued at ₹171.57 crore due to poor quality of coal between 2014 and 2019. Tangedco did not adhere to guidelines for phasing out the accumulation of ash on land. A total of 62.15 million metric tonnes of ash had accumulated in three thermal units as of March 2019,” said CAG in its report. The report also accused Tangedco of dumping ash on land which resulted in contamination of groundwater, Buckingham Canal, and Kosasthalaiyar river.

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The future is a little bright for Tangedco as the Centre has allocated coal blocks for new thermal projects coming up. The Union ministry of coal allocated Chandrabila coal block in Odisha and Tangedco proposes to mine not less than 10 million tonnes each year from this coal block to provide fuel to ETPS Expansion thermal unit with a capacity of 660MW, Ennore SEZ in which two units of 660MW each is coming up, and Udangudi Thermal Power Plant Stage 1, where two units of 660MW each is to come up.