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India railway shutdown threatens coal-fired power plants

Coal-fired power plants in India‘s Jharkhand state have been sidelined after an underground fire shut down a railway line a week and a half ago, disrupting fuel supply.

The 34-km stretch of track between the city of Dhanbad and the town of Chandrapura delivers 42,000 tonnes of coal per day to power plants in the states of West Bengal, Odisha, Punjab, Haryana and Uttar Pradesh. à‚ 

According to reports, around 12 coal-carrying trains per day have been cancelled, affecting around 24 GW of power generation capacity.

Major producer Coal India Ltd is reportedly in talks with transport firms to arrange alternative ways to move its coal. An executive from the firm was quoted by The Economic Times as saying that the railways “have been co-operating” but fuel supplies would “take some time to normalize”.

India’s coal-fired power plants face declining reserves due to growing demand for power just as coal production is expected to fall with the advent of the monsoon season.

Meanwhile, one analyst has shown that the situation is not much better for Indian plants that depend on imported coal.

Tim Buckley, director of Energy Finance Studies Australasia at the Institute for Energy Economics and Financial Analysis (IEEFA), told news service IANS that price hikes on imported Indonesian coal mean India’s plant operators would need to retrofit their plants to run on lower-quality domestic coal, or a blend of imported and domestic coal, to avoid economic stresses.

He said some plants that run on imported coal were already becoming stranded assets after India’s Supreme Court ruled against tariff changes to compensate for rising import costs. à‚ 

One such plant, Adani Power’s supercritical 4620 MW Mundra plant (pictured), has cut 1250 MW of production after running on imported coal became too costly. à‚ à‚ 

Energy minister Piyush Goyal said in June that India now has enough domestic coal reserves to supply all of its power plants, but that implementing this would be impossible as many plants were designed to run on higher-quality imported coal.

The nation boasted a 69 million tonne coal surplus in 2016 and has set a target for its public-sector power companies to use 100 per cent domestic coal by the end of the current fiscal year. State-owned National Thermal Power Corporation (NTPC) has already moved to substantially decrease its coal imports.

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