NTPC Limited BY - T K CHATTERJEE EXECUTIVE DIRECTOR (FUEL MANAGEMENT),NTPC.

NTPC Limited

BY - T K CHATTERJEE

EXECUTIVE DIRECTOR

(FUEL MANAGEMENT),NTPC

SYNOPSIS OF THE PRESENTATION

• Power Sector Overview in India.• World Coal Scenario .• Domestic Coal Scenario .• NTPC’s Coal strategy

Growth of installed capacity

1362 1713 465312957 16664

28448

63636

105046

132329

167277

1947 1950 1961 1969 1974 1980 1990 2002 2007 2010

(MW)

NTPC started adding capacity

in 1982

Excluding 19509 MW Captive Generating Capacity connected to Grid (2010)

Fuel wise break-up (MW)

(Excluding captive capacity of 19509 MW connected to grid )

Thermal 108602 64.0%

Coal 89778 53.6%

Gas 17624 10. 5%

Diesel 1200 0.7%

Hydro 37328 22.3%

Nuclear 4560 2.7%

Renewable 16787 11.0%

TOTAL 167277 100.0%

Sector wise break-up (MW)

State Sector

50%

Private Sector

18%Central Sector

32%

(Source-CEA)

Power Infrastructure in India

(As on Nov’10)

559591

631

691

737

774

850

519548

579

624

665689

771

450

500

550

600

650

700

750

800

850

2004 2005 2006 2007 2008 2009 2010

Line 1 REQUIREMENT AVAILABILITY

8.8%7.3%

8.3%

9.6%

DURING 2009-10, PEAKING SHORTAGES WERE 12.7%

9.9%

Billion Units

A deficit scenario persists

11.1%

10.1%

2007 2012 2022 2032

Key Imperatives: Attract investment in power sector Ensuring matching fuel availability Add additional manufacturing capacity Effective project management

132 GW220 GW

425 GW

778 GW

Source: Integrated Energy Policy GOI

10.8%

6.8%

6.2%

Projected Capacity Requirement

CAGR 7.3%

COAL• Reserves : 271 Billion Tonnes• Proven category : 110 Billion TonnesLIGNITE Reserves : 38.9 Billion Tonnes Proven category : 4.8 Billion Tonnes

• 78% domestic coal production is used for power generation

• Coal is going to be the main source of power generation in the country for at least next 25-30 years

Source: Geological Survey of India, MOPNG

Nearly 87% of the total reserves are thermal coal

NATURAL GAS• Proven Reserves : 1.12 TCM

Coal is the only proven source of Thermal Power Generation

Thermal80%

Hydro15%

Nuclear5%

12th Plan Capacity Addition

THERMAL HYDRO NUCLEAR TOTAL

85000 16360 4800 106160

MW

FUEL

Indian Economy provides robust demand of coal

National coal companies will not be able to meet the coal demand. Government of India is allocating captive coal blocks to match the rising demand.

About 10% of coal required by India is being met by imports. Roughly 50% of total imports are contributed by coking coal.

The setting up of the Coastal Ultra Mega Power Projects (UMPPs) based on imported coal has also been started.

Meeting the Demand of coal

COAL AVAILABILITY SCENARIO IN THE WORLD

WORLD COAL FACTS

• World has - 700 BT of proven thermal coal reserves.

• Majority in USA,RUSSIA,CHINA & INDIA

• Proven world reserve of thermal coal could sustain current demand for over 140 years. (Assuming thermal coal reserves drawn down at current rate of production of 5.0 BT/Year).

World Coal ScenarioTop Ten Coal Producers in the World in 2009-10

PR CHINA 2971 MT

USA 919MT

INDIA 526 MT

AUSTRALIA 335 MT

SOUTH AFRICA 247 MT

RUSSIA 229 MT

INDONESIA 263 MT

KAZAKHSTAN 96 MT

POLAND 78 MT

COLUMBIA 73 MT

Brief Analysis of coal facts

• There is a significant increase in coal consumption of about 41% during the period 1999-2009 against previous 10 years period during 1989-99 which was about 16%.

• There is a steady increased demand of coal in Asia Pacific Region due to growing economy in India and China.

• The demand of coal in other parts of the world is declining.

DOMESTIC COAL SCENARIO

Coal Reserves in India(as on 01-04-10) Billion tonnes

Proved Indicated Inferred

Coking 18 14 2

Non-Coking 92 109 36

Total 110 123 38

RAW COAL PRODUCTION IN INDIA

0

100

200

300

400

500

600

02-03

03-04

04-05

05-06

06-07

07-08

08-09

09-10

YEAR

MIL

LIO

N T

ON

NE

S

• Growth of coal production is 6-7% whereas demand for electricity has been growing at an average growth rate of 7% to 8% and demand supply gap has widened over the years.

Coal Producers in India in 2009-10

CIL 431 MT

SCCL 46 MT

CAPTIVE 33 MT

OTHERS 16 MT

TOTAL 526 MT

COAL REQUIRMENT, AVALIABILITY AND IMPORT DURING XI PLAN FOR THE POWER SECTOR

(Fig IN Million Tonnes)Sl.No. Details 2010-11 2011-12

a) Indigenous coal requirement 434.0 488.0

b) Requirement of imported coal for imported coal based projects

10.0 19.0

c) Total coal requirement 444.0 507.0

d) Indigenous coal availability from:-

i) CIL 335 360

ii) SCCL 32 32

iii) Captive mines 21 22

e) Total availability of indigenous coal 388 414

f) Shortfall in indigenous coal availability (a-e)

46.0 74.0

g) Requirement of imported coal to meet the shortfall in indigenous coal availability

30.7 49.3

h) Total requirement of imported coal (b+g) 40.7 68.3

REASON FOR COAL SHORTAGE

• Growth in the coal sector not commensurate with nation’s requirement of +8% GDP growth.

• Slow clearance of projects. In some cases linked mines are yet to be developed even though the power projects have been implemented on schedule.

• Captive blocks are way behind schedule.

• Import coal materialization is less due to bottleneck in the ports and Railway

REASON FOR DELAY IN DEVELOPMENT OF COAL BLOCKS

• Forest clearance for exploration.• Most of the captive coal blocks are

unexplored and need forest clearance before commencement of exploration.

• Environment and Forest clearance for the Coal mines.

• Delay in granting prospecting license.• Land acquisition.• Rail transportation of coal.

Coal Availability vis-a vis Govt. Policy

• NCDP 2007 ensures 100% satisfaction level for the power utilities and supply through legally enforceable FSA.

• Annual action plan for coal production by CIL, the major coal producer of INDIA, projected supply demand mismatch anticipated in the terminal year of XIth & XIITH plan to the tune of 234 MMT & 185 MMT respectively.

• This supply demand mismatch hindering the policy implementation. For new projects, guaranted quantity of supply is to the extent of 50% of the ACQ/Linkage achieving 45% PLF.

Coal Availability vis-a vis Govt. Policy

• This gap in policy and its implementation likely to discourage power developer.

• There is an urgent need to synchronize coal based thermal capacity addition and capacity addition for the coal production.

• With the prospect of accelerated nuclear capacity addition programme existing planned thermal coal based capacity addition need to be reviewed.

The Way Forward

• Country’s Power generation plans are at the cross roads of growth and poised for a quantum leap.

• Matching progress required in the coal sector through creation of enabling policy environment.

The Way Forward

• In the deficit scenario of coal, Government would have to create an enabling policy environment to facilitate –

• Greater domestic/captive production,

• CIL/SCCL to ensure total coal requirement (including import) for the power sector as per NCDP.

• Encouragement of setting up new power plant at coastal area with imported coal.

The Way Forward

• Ports to be identified with power project for import/coastal cum riverine transport.

• There must be some integrated clearance for both coal linkage as well as movement clearance to power utilities.

• Supply of sized coal to power utilities.

• Incorporation of rapid loading system at each and every siding/mines of the coal company.

Measures to Beef up production

From Existing Mines :• Adaptation of modern technology to increase

productivity.

• To increase the availability of the major HEMM ( Shovel, Dumper, Dragline, Dozer etc.).

• The rapid depletion of shallow reserves calls for exploitation of deep seated reserves through efficient technology. This can be done by inviting international players with state-of-the-art technologies.

Measures to Beef up production

From Upcoming Mining Project :

– Time frame clearance of coal mining projects.– Up front forest and environment clearance – Allocation of more coal blocks to private

players/ end users with strict deadlines and steep penalties for failure.

– A special purpose vehicle (SPV) may be set up initially to take care of all regulatory clearances, which is then transferred to the Mine developer

Coal Supply Scenarioin NTPC

•20 Coal Based and 8 Gas Based Projects

•Current Operating Capacity– 33,194 MW (Including JV of 3,364 MW)

•15,740 MW Under Construction

•Largest generator in India contributing about 28% of India’s generation with nearly 18% of capacity.

NTPC - An OverviewNTPC - An Overview

31

No.1 in Capacity Utilization globallySix plants operated at PLF of >95%Dadri Stage-I achieved highest ever PLF of 100.59%Gas stations registered highest ever PLF of 78.38%

NTPC coal stations achieved PLF of above 90% for 3rd consecutive year

NTPC 1994

NTPC 2010

All India 2010

PLF OF COAL STATIONS

Operational Excellence

COAL SUPPLY TO NTPC STATIONS

90 98 109 112 123 130 136

020406080

100120140160

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

YEAR

MIL

LIO

N T

ON

NE

S

33

2010 ~ 33 GW

2010 ~ 33 GW

Basket of projectsBasket of projects

Figures in MWFigures in MW

* FR approved for XII Plan / XIII Plan* FR approved for XII Plan / XIII Plan

By 2032, NTPC targets a capacity of 128 GW with 28% capacity from non-fossil sources

Coal Gas Nuclear Hydro Renewables

81%

19%8%

9%

56%

16%

11%

PPA signed for ~100,000MW PPA signed for ~100,000MW

2032~ 128 GW

2032~ 128 GW

NTPC to become 1,28,000 MW Company by 2032

NTPC Coal requirement going to be increased multifold :

YearCoal Based installed capacity (GW)

Coal Requirement (MT)

2011-12 31.9 172

2012-13 35.4 191

2013-14 37.4 201

2014-15 39.7 215

2015-16 46.2 231

2016-17 54.9 272

2021-22 62.3 322

2031-32 71.5 367

Short Term Strategies

1. Import of coal2. E-Auction3. Tie up through MOU at premium price.4. To take up with CIL for finalization of FSA for new

units at 90% commitment level5. Transportation of coal through Inland Waterways

at Farakka/Kahalgaon/Barh6. NTPC may contemplate handing over their own

fleet of wagons to Railways for increased coal movement

YEARDemand (MMT)

ACQ Supply (MMT)

LOA** (MMT)

SUPPLY THROUGH ACQ/LOA

(MMT)

Captive Supply (MMT)

Supply thro E-Auction/MoU (MMT)

DEFICIT (MMT)

IMPORT (MMT)

BLENDING (%)

2011-12 172 125* 15 140 0 10 22 15 9

2012-13 191 125 27 152 5 12 22 15 8

2013-14 201 125 34 159 15 10 17 11 6

2014-15 215 125 44 169 26 8 12 8 4

2015-16 231 125 49 174 35 8 14 9 4

2016-17 272 125 58 183 43 8 38 25 10

Supply & Import Projection of NTPC Stations (Till 2016-17)

**Assuming coal availability through LOA at 70% PLF level.**Assuming coal availability through LOA at 70% PLF level.

*CIL – 114.7 + SCCL – 10.2*CIL – 114.7 + SCCL – 10.2

Inland Water Transport(IWT)

NTPC has agreed for transportation of coal through IWT mode to the extent of 3 million tonnes (1 million tonne for Farakka and 2 million tonnes for Kahalgaon) per annum for a period of 7 years.

A joint committee consisting of NTPC and IWAI has been constituted to finalize the modalities of Project Implementation.

BackBack

Ganga- Bhagirathi-Hooghly National water way No-1

Kahalgaon

FarakkaBarh

Medium Term Strategies

• Development of captive mines allotted.

• Acquisition of assets (Domestic and abroad).

Coal Production Projection – Captive mines

Name of Block

End-Use Project

Mineable Reserves

(MT)

Ultimate Capacity (MTPA)

Tentative Coal Production (MTPA) $

2012-132013-

142014-

152015-

162016-

17

PB Shortfall in Lara+Darlip

ali503 15 2.00 5.50 8.50 11.50 15.00

CB + CB(S)

Barh-II, Tanda Expn.

148.68 7 1.00 3.00 5.00 7.00 7.00

KD 142.01 6 2.00 4.00 6.00 6.00 6.00

DL Darlipali 194.97 7 1.00 2.50 4.50 7.00

TL Lara 848 18 1.50 4.00 8.00 13.00

Total 1837 53.00 5.00 15.00 26.00 37.00 48.00

Coal Mine acquisition abroad NTPC is exploring options for acquisition of coal mines in Indonesia,

Australia, South Africa and Mozambique

Due diligence to coal in Indonesia is going on

ICVL – JV of NTPC, SAIL, RINL, CIL and NMDC has also been entrusted

responsibility of thermal coal mine acquisition abroad.

CIL is also exploring options of acquisition of coal mines abroad. NTPC is

in discussion with CIL

Planning Long term Coal Security

42

Three Options exist for planning for long term coal security:

Option 1 Option 2 Option 3

Strategy

Issues

Remedies

Coastal based projects running fully on imported coal

Tariff calculations? (pass-through)

Choosing projects to be relocated

Coal pricing may be linked to CERC index or global coal indices

Older projects of XII plan could be relocated

ENABLERS FOR COAL SOLVENCY

• Sourcing of coal by optimizing portfolio mix.( Domestic/Import/Captive/Acquiring Mines abroad etc).

• Uninterrupted Transportation System (MGR/IR).

• Well equipped unloading system at station end with sufficient redundancy.

Thank You

Disclaimer:The views expressed in this presentation are exclusively of the

presenter, not necessarily of the Management of NTPC Ltd.