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As India looks to substantially increase its power generation capacity, public and private sector entities have embarked upon imported coal as a means to meet the demand. Currently, India generates more than half of its power through coal-fired plants. Since India does not have enough coal resource to meet growing demand, power plants will have to depend on imported coal. This has led to some Indian companies to purchase, develop and operate coal mines in international geographies such as Indonesia, South Africa and Australia.
Both power plants and ports developers understand that it makes good business sense to build power plant adjacent to port. Off late, many port developers in India decided to cash in on this advantage by building power plants on their own or inviting other players to set up power plants in their premises. This helps both port operator as well as power company in a big way since such arrangement ensures continuous and seamless supply of coal to the power plant and at the same time the port gets assured coal traffic.
According to some market research, coal import demand in India to reach 1 BT by 2015. India may import at least 50 MT of coal from abroad in 2017 to bolster local production that’s projected to reach 647 MT. The estimate suggests that India’s annual coal output of 535 MT will fall short of demand from power generators by as much as 80 MT by next year.
Adani Group which owns India’s largest private port, Mundra Port and Special Economic Zone Limited (MPSEZ), has already set up power plant in the region. With its current production capacity of 990 MW, the company plans to ramp up the production till 4620 MW by 2012. In addition to that, another big power company, Tata Power is setting up its own power plant of 4000 MW which will imports coal through Mundra Port.
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Adani has mines in Kalimantan, East Indonesia from where the company ships and delivers coal to their own power stations as well as to that of other electricity board. The company has also acquired large coal field in Queensland Australia and have a new coal terminal at Dudgeon Point.
The company is developing three berths to handle capesize vessels which in the first phase will handle 32 million tons. In addition, MPSEZ is coming up with two conveyor belts for quick handling of cargo. It will also have Stackers and Reclaimer for moving the coal from the port to the evacuation site.
Tuticorin Port, a major port in Tamil Nadu, is gearing up to meet huge demand for coal traffic. Tamil Nadu is expected to see several imported-coal based power projects, including ultra mega power projects coming up in the state. This is likely to cause rise in coal traffic demand at Tuticorin Port which is expected to be in the range of 45 million tons. This has necessitated a need for dedicated coal-handling infrastructure at the port.
To meet that demand, the company is developing North Cargo Berth (II) which will have mechanised coal-handling facilities to handle 5 million tons of coal annually. The Port has awarded the project to ABG-LDA Bulk Handling Pvt. Ltd. & Louis Drefus Armaters SAS.
The Port is also constructing a dedicated jetty called North Cargo Berth. This Rs50-crore project will meet the demand for upcoming 1,000-MW Tuticorin coal-fired power plant at Tuticorin which is promoted by Neyveli Lignite Corporation Ltd and Tamil Nadu Electricity Board. The Port currently has just two coal jetties, one of which is being upgraded.
Gujarat Pipavav Port is also expected to benefit from various power projects proposed to come up in Gujarat. According to Gujarat government, six power plants are being commissioned close to Pipavav and 11,164 MW of power generation capacity will be added in the state by 2012. This will translate into a coal requirement of 45M MT (million metric tonnes per annum); 4 MTPA for a 1,000 MW power plant. The increase in demand for coal will help boost the coal traffic.
The Gujarat Government and Torrent Power are jointly setting up a coal-based 1000 MW power plant near Pipavav. Visa Power and Videocon too plan to set up 1000 MW power plant each in Pipavav. APM Terminals Pipavav, the owner of the port, has 400 hectares land available for expansion which could be used for port-related business. The Port has also developed 200,000 square metres coal yard.
To meet the growing fuel demand, state-run Coal India Ltd is also planning to invest in its first port terminal to handle coal imports. The company looks to build a terminal with Visakhapatnam Port Trust by 2013. This will have capacity to import about 6 million MT annually. The company is also looking to form a JV with NTPC Ltd to buy the fuel from overseas. The proposed venture will help Coal India supply coal to NTPC plant. NTPC is planning to import 14 MT by March 2011.
JSW Jaigarh Port, which commenced its operation last year, plans to double its cargo handling capacity to 20 MT after completion of the second phase expansion. It has been designed to handle Capesize vessels with berths to accommodate seven ships. The Port will mainly cater to the coal requirements of JSW’s Energy’s 1200 MW power plant that is coming up at the same region. JSW plans to make Jaigarh, a port based power plant.
As there are several power plants coming up near various ports, this will offer continues coal traffic to those ports. The total coal traffic at various Indian ports is expected to grow at a CAGR of 7.2% from 91.9 MT in FY09 to 130 MT by FY14.
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