Mystery of the missing coal

Electrical energy Minister V. Senthilbalaji’s assertion final week on 2.38 lakh tonnes of coal, valued at ₹85 crore, going lacking from the Tamil Nadu Era and Distribution Company Restricted’s (Tangedco) North Chennai energy plant and hinting about related points within the Mettur and Tuticorin thermal stations has raised fairly a number of eyebrows.

Sources within the Tangedco mentioned the problem really first got here to mild when a senior official introduced it to the discover of the then Chairman and Managing Director Pankaj Kumar Bansal about “coal scarcity” within the Tuticorin thermal energy station. Instantly, a committee was fashioned to examine all thermal energy stations and put together a report of the coal loss. However the committee didn’t take any steps because of the coming Meeting election within the State, they added.

Additionally learn: Diversion could be a cause for lacking coal

With the DMK authorities assuming energy three months in the past, the Electrical energy Minister and present Tangedco chief Rajesh Lakhoni convened a gathering of the committee members and requested them to organize an preliminary report. The report contained data on the lacking coal, sources mentioned.

Mr. Senthilbalaji has accused the earlier AIADMK authorities of mismanagement, and has ordered an investigation.

Talking to The Hindu, former Electrical energy Minister and AIADMK chief P. Thangamani claimed the “scarcity” of coal was recognized throughout August 2020 when he went to New Delhi to satisfy the Union Energy Minister concerning the augmentation of coal provide to the State. He mentioned when he was notified of the distinction between the coal inventory proven and precise accessible coal, he ordered an inquiry and fashioned a committee.

“Sadly, the COVID-19 pandemic intensified and I turned concerned with social gathering work for the Meeting election, so the problem couldn’t be pursued additional,” Mr. Thangamani added.

Denying any wrongdoing, he mentioned he was keen to face any inquiry. Mr. Thangamani additionally added that the scarcity might have been owing to a technical error, and never guide sabotage.

As of now, the lacking coal situation raises extra questions than there are solutions accessible, however allow us to focus the highlight on the best way Tangedco manages its coal necessities.

Meeting line

Coal, which is used as the first gasoline at thermal energy stations, accounted for 95.54%-98.41% of the full price of technology of Tangedco throughout 2014-19, in accordance with a report of the Comptroller and Auditor Basic of India (CAG) on public sector undertakings in Tamil Nadu for the 12 months ended March 31, 2019.

Tangedco meets its coal requirement via indigenous coal in addition to imported coal. The indigenous coal is sourced from 4 subsidiaries of Coal India and Singareni Collieries Firm Restricted. Imported coal is being procured primarily from Indonesia. The indigenous and imported coal are blended and utilized in thermal energy stations.

From the mines, the coal is transported via ports. Additional, the inventory is routed to the ability crops via the Railways and conveyor programs.

The effectivity of an influence plant is decided by the standard of coal used which, in flip, is measured when it comes to calorific worth expressed in kilocalories per kilogram (kcal/kg).

“This [missing coal] doesn’t appear to be a direct theft of bodily coal from the plant. This has received to do with the standard of coal. Imported coal must have 6,000 kcal/kg as per tenders, however solely 4,500 kcal/kg of poor high quality coal are available actuality,” Jayaram Venkatesan, convener, Arappor Iyakkam, identified.

As a consequence of this, the plant has to make use of further load to attain the identical energy output as it could have realised with 6,000 kcal. Nevertheless, as a way to cowl up the corruption within the high quality of coal, the extra hundreds used are usually not recorded. Recording it could present extra tonnes used per MW of electrical energy generated, which is able to point out decrease effectivity and questions on coal high quality. Due to this fact, the inventory is used however not proven, he defined.

Additionally learn: Arappor Iyakkam raises crimson flag in opposition to Tangedco’s tender to obtain 20 lakh tonnes of coal

In 2018, Arappor Iyakkam alleged a serious rip-off in coal procurement and lodged a criticism with the Directorate of Vigilance and Anti-Corruption. A former Tangedco official blamed the provider Coal India for the inventory loss situation.

“Usually, Coal India would invoice for top of the range coal however provide solely low high quality coal. Furthermore, all these years Tangedco has by no means bothered to consider the loss that occurs throughout transit,” he identified. The retired official mentioned that in transit, both via rail or ship, 5%-6% of loss would happen.

The transit loss would naturally convey down the calorific worth of the coal, ensuing within the downgrading of the effectivity issue. Nevertheless, the transit loss was not accounted for in amount or monetary phrases. The managers had not taken this to the discover of senior officers, he added. The previous official additionally mentioned coal transporters would stay silent about it, as they should compensate for the decreased amount.

Ok.E. Raghunathan, convener of the Consortium of Indian Associations, mentioned the important thing factor to be careful for is whether or not there was a system to confirm the bodily shares with these within the books and whether or not a periodic audit was executed. “If there is no such thing as a system in place, that must be fastened first,” he added.

Lapses in administration

Curiously, the CAG report, tabled within the Meeting on June 24, 2021, has handled the facet of coal administration within the thermal energy stations of Tangedco and identified a slew of lapses.

The audit noticed that Tangedco didn’t file the scarcity of coal from the collieries to the load ports.

“There was no provision for periodical evaluation of coal shortages and restoration thereof. On account of this, coal shortages occurring in the course of the previous 18 years (2001-19) haven’t been recorded. Thereby, the Tangedco was unable to evaluate the scarcity of coal,” it added.

Tangedco ought to make sure that coal shortages are recorded at common intervals and recoveries effected earlier than the closure of contracts to guard monetary curiosity. Tangedco might prioritise the reconciliation of transit loss because it was pending for over 19 years, the CAG mentioned.

It additionally identified that Tangedco had not documented or created any logbook for witnessing and recording weighing of coal at mines. For example, the audit report identified that coal unloaded from ships at discharge ports in Ennore and Thoothukudi are accounted on the premise of draft survey studies, with out cross-verifying the precise amount delivered on the coal yard.

A draft survey is a calculation of the load of cargo loaded to or unloaded from a ship from the measurements of adjustments in its displacement. The approach relies on Archimedes’ precept, it mentioned.

The audit identified that V.O.C. Port Belief in Thoothukudi estimated a coal spillage of 12,000 tonnes into the ocean throughout unloading throughout 2015-19. Nevertheless, this scarcity was not mirrored in Tangedco’s books of accounts.

The Tamil Nadu authorities in its reply (September/October 2020) acknowledged that there was no provision within the CAG’s audit report and likewise noticed that Tangedco had no separate ‘high quality assurance wing’ to cowl the whole gamut of coal high quality actions. High quality points are handled by just one official, indicating lack of monitoring of procurement actions valuing above ₹4,000 crore every year.

A pattern survey within the audit report, performed amongst Tangedco personnel, confirmed most of them weren’t conscious of how a lot kilograms of coal must be collected from every wagon for sampling. They weren’t conscious of the related BIS process relevant for pattern assortment and testing, it added.

The then State authorities acknowledged that to rectify the infirmities identified, formation of a separate Coal High quality Monitoring Wing was below scrutiny, the CAG mentioned.

It additionally identified as in opposition to the normative lack of calorific worth of 120 kcal/kg, the precise loss throughout transportation ranged between 140 and a couple of,256 kcal/kg, leading to wasteful expenditure of ₹2,012.65 crore. Regardless that there have been cases of a drop in gross calorific worth (GCV) throughout consumption instantly upon its receipt on the identical day, Tangedco had not analysed the explanations for a similar, the CAG mentioned.

Additional, it mentioned operational effectivity of thermal energy stations was regulated via station warmth fee, which relied on the amount and high quality of coal. Station warmth fee is measured when it comes to amount of coal multiplied by the GCV and divided by variety of items of power generated.

The precise station warmth fee was in extra of the norm stipulated by the Tamil Nadu Electrical energy Regulatory Fee in all thermal energy stations (excluding the Mettur energy station I in 2015-16 and the Mettur energy station II from 2016-17 to 2018-19), the report mentioned. This resulted in extra consumption of coal of 56.85 lakh tonnes, valuing ₹2,317.16 crore all through 2014-19, it added.

The CAG additionally famous that Tangedco couldn’t scale back particular coal consumption, regardless of utilization of upper proportion of imported coal, having excessive calorific worth, in any respect thermal energy stations. The State authorities, in its reply, had mentioned the station warmth fee couldn’t be achieved owing to the ageing of the ability crops, receipt of poor high quality of coal and non-operation of plant at full capability resulting from load restrictions. Nevertheless, the CAG mentioned the reply was not convincing as a result of the norm was fastened solely after these elements had been taken into consideration.

The CAG additionally identified that particular coal consumption, which displays coal used to supply one unit of power, remained the identical in all thermal stations for all 60 months throughout 2014-19, regardless of whether or not imported coal was blended to a lesser or larger extent.

Particular coal consumption didn’t enhance regardless of mixing larger gross calorific worth imported coal in thermal energy stations, and this was indicative of different operational deficiencies, which have to be analysed by Tangedco, because it continued to incur larger price for procuring imported coal, the CAG mentioned.

Coal and energy technology

Within the revised Funds for 2021-22, the Tamil Nadu authorities mentioned the put in capability of Tangedco’s personal current thermal energy crops was solely 4,320 MW. Out of it, 12 items, producing 2,520 MW, had been greater than 25 years outdated and have to be changed quickly.

A complete of 17,980 MW of energy technology capability can be added via personal producing stations within the subsequent 10 years, the Funds mentioned. It additionally mentioned the mixture put in energy technology capability in Tamil Nadu is 32,646 MW, together with wind and photo voltaic capability of 13,128 MW.

Nevertheless, the Funds identified that the precise most availability of energy throughout peak requirement was solely 14,351 MW in opposition to the height demand of 16,846 MW. The primary cause was acknowledged to be that wind power was seasonal and photo voltaic power was accessible solely in the course of the day.

Nearly 2,500 MW of energy needed to be purchased on the ability exchanges to satisfy the height wants. Thus, the assertion that Tamil Nadu turned an influence surplus State over the previous couple of years was inaccurate, it added. One of many key points to make sure uninterrupted energy technology was guaranteeing enough provide of high quality coal.

For example, the CAG mentioned precise technology at Tangedco’s thermal energy stations in the course of the 5 years from 2014-15 to 2018-19, was 26,980 million items (MU) decrease than what was focused, primarily owing to the scarcity and poor high quality of coal.

Whereas solely an investigation would convey out the precise cause for the lacking coal, there are a lot of shortcomings in coal administration by Tangedco. Given the State authorities’s formidable capability addition goal, the way it fixes the problems in coal administration can be intently watched.