Interview with Sarat K. Acharya

“NLC aims to increase its installed capacity to 19,831 MW by 2024-25”

The Neyveli Lignite Corporation (NLC) has set ambitious targets to scale up its power generation and mining operations. The company is adopting new technology initiatives to augment production and improve efficiency. However, overburden removal and land acquisition remain key areas of concern. Excerpts from a recent interview with Sarat Kumar Acharya, chairman and managing director, NLC…

What is your assessment of the power sector’s performance during the past year?

The power sector is witnessing steady growth. As of March 31, 2015, the country’s total installed capacity stood at 271,722 MW, registering a growth of 10.79 per cent as compared to the previous year. As of September 30, 2015, the total installed capacity stood at 278,734 MW,  a growth of 2.58 per cent during the first six months of 2015-16. In addition, the national average plant load factor (PLF) for 2014-15 stood at 64.46 per cent. The per capita consumption of electricity is also showing an increasing trend. It increased to 1,010 kWh during 2014-15 as compared to 883.6 kWh in 2011-12. However, it has been estimated that during 2015-16, the country will experience an energy shortage of about 2.1 per cent.

What have been some of NLC’s key achievements during the past year?

During the past year, NLC successfully commissioned Units 1 and 2 of its Thermal Power Station (TPS) II Expansion project, each with an installed capacity of 250 MW at a project cost of about

Rs 35.84 billion. In the renewable energy segment, the company commissioned the 10 MW Neyveli solar power project at a cost of Rs 778.9 million. In addition, NLC Tamil Nadu Power Limited (NTPL), a subsidiary of NLC, commissioned two 500 MW units of the NTPL thermal power project (TPP) in Tuticorin, involving a project cost of Rs 66.03 billion.

How has the operational performance of NLC’s existing power projects been in the past year?

NLC’s existing power projects achieved an average PLF of 77.64 per cent during 2014-15 as against the national average of 64.46 per cent. For all its TPPs, the PLF was higher than 60 per cent. The TPS I Expansion project achieved the highest PLF of 92 per cent and the electricity generated by the plant during the year was higher than the target (see table).

What are some of the new technology initiatives taken for power generation?

NLC is in the process of executing the country’s first 500 MW lignite-fired boiler. It is also considering setting up 5×800 MW coal-based ultra supercritical units at Sirkazhi in Tamil Nadu. In addition, a joint venture between NLC and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) is in the process of setting up 3×660 MW coal-based supercritical units at Ghatampur in Uttar Pradesh. The plant will deploy supercritical technology as specified by the Central Electricity Authority.

How has the company’s experience been with circulating fluidised bed combustion (CFBC) technology?

CFBC technology is deployed to utilise low-grade fuel with high sulphur content and allow the usage of a wide range of fuels. The technology was adopted by NLC to minimise the environmental impact of flue gases. In 2011, the company commissioned two 125 MW CFBC units at Barsingsar. During 2015, NLC commissioned the country’s first 250 MW CFBC units, one each in April and July. However, the units are facing some teething problems, which are being resolved with the assistance of Bharat Heavy Electricals Limited to ensure sustained operations.

What are the various power and mining projects under implementation or in the pipeline? When are these expected to be commissioned?

NLC has planned a capacity addition of 26.3 million tonnes per annum (mtpa) in lignite mining and 23 mtpa in coal mining. Thus, its total mining capacity is projected to reach 79.9 mtpa by 2024-25. On the power generation front, NLC has planned a capacity addition of 15,530 MW, which will increase the company’s total installed capacity to 19,831 MW by 2024-25. In addition to its target of setting up and expanding its existing TPPs, NLC plans to develop solar and wind power projects and purchase power assets.

Some of the projects currently under implementation are the New Neyveli thermal power project (NNTP), Bithnok TPP, Barsingsar TPS Extension, Ghatampur TPP, and the expansion of Mines I and IA. The NNTP is a 1,000 MW lignite-based power project being implemented by NLC at Neyveli. The project will deploy pulverised fuel firing technology and serve as a replacement to the existing 600 MW TPS I. The sanctioned cost for the project is Rs 59.07 billion, with a commissioning schedule of 48 months and 54 months for Units 1 and 2 respectively. To meet the lignite requirements of the project, the overall lignite mining capacity of Mines I and IA is proposed to be increased by 4 mtpa through the annexation of a lignite block at Neyveli.

Meanwhile, the 250 MW lignite-based Bithnok TPP, along with a linked mine of 2.25 mtpa, is proposed to be implemented at Bithnok in Bikaner district of Rajasthan, at an aggregate cost of Rs 27.09 billion. NLC has also proposed to set up a 250 MW lignite-based TPP as an extension to the existing Barsingsar TPP. The fuel for the plant is proposed to be sourced from the Hadla mine (1.9 mtpa) and from the Barsingsar mine expansion (0.4 mtpa) in Bikaner. The project extension will entail an aggregate cost of Rs 26.35 billion. For both the Bithnok TPP and the Barsingar TPS Extension, power purchase agreements (PPAs) have been signed with Rajasthan’s discoms. The projects will be implemented in the engineering, procurement and construction (EPC) mode, and are expected to be commissioned in 2019.

In addition, NLC has planned to implement a 1,980 MW coal-based TPP at Ghatampur in Uttar Pradesh at an estimated cost of Rs 143.75 billion. The project will be executed by Neyveli Uttar Pradesh Power Limited, a subsidiary company with equity participation by NLC and UPRVUNL in the ratio of 51:49. The project has been given environmental clearance by the Ministry of Environment, Forests and Climate Change and a PPA has been signed with Uttar Pradesh Power Corporation Limited. However, the project is awaiting the approval of the Public Investment Board and the Cabinet Committee on Economic Affairs.

In the renewable segment, NLC has proposed to set up a 125 MW solar power project at Barsingsar. The project will be implemented in the EPC mode and is scheduled to be commissioned in 2016-17.

Aside from these under-implementation projects, there are some projects at the formulation stage. These include the 4,000 MW Sirkazhi TPP, the 1,000 MW TPS II Expansion project, solar power projects aggregating 3,990 MW, and the 500 MW Jayamkondam power project linked to a lignite mine of 5 mtpa. NLC also plans to set up a new mine, Mine III, with a capacity of 9 mtpa and augment the capacity of Mine II from 15 mtpa to 18.75 mtpa.

What are some of the initiatives being taken by NLC to augment output from its mines?

NLC has adopted continuous mining technology using specialised mining equipment (SME) such as bucket wheel excavators (BWEs), conveyors and spreaders for overburden removal and lignite production from the company’s opencast mines. To further augment output, NLC is currently deploying conventional mining equipment (CME) through external agencies. The mixed technology of SME and CME facilitates operational flexibility and helps improve the productivity of capital-intensive SME operations at the Neyveli mines. Wireless-based  centralised monitoring operations and control systems are deployed in BWEs, conveyors and spreaders, along with the networking of existing programmable logical control stations for the purpose of centralised monitoring, operations and control.

The implementation of variable voltage, variable frequency drives in SMEs and conveyors helps in smooth starting and optimisation of power consumption, thereby saving energy. Besides, NLC is implementing various modern technologies to improve productivity and safety for men and machinery.

What are the company’s key concerns?

A key area of concern for NLC is the higher ratio of lignite overburden that entails the removal of huge volumes of overburden per tonne of lignite. Besides, NLC’s mines are located in cyclone-prone areas, leading to disruptions in operations during calamities. High operating costs also present a major challenge. With regard to land acquisition, the issues pertain to high compensation, and resettlement and rehabilitation costs. On the environmental front, land reclamation and restoration is a cause of concern. With NLC’s foraying into the renewable segment, the signing of PPAs with beneficiaries poses a major challenge.

What is your long-term outlook for the power sector and NLC’s role in it?

The government has set an ambitious target to provide power to all by 2022. Through the implementation of various projects in the pipeline, NLC’s lignite mining capacity and power generation capacity will increase to 56.9 mtpa and 19,831 MW respectively by 2024-25. The power generation capacity includes solar power projects aggregating 3,990 MW, in line with the government’s National Solar Mission.

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