According to the estimate, the overall coastal potential from operational plants alone, assuming a plant load factor of 75 per cent and existing linkage with MCL, aggregates to 63 mtpa today, including 35.7 mtpa from plants located near ports and 27.3 mtpa from those located 200-400 km inland.
Additional coastal coal volume of 25-30 mtpa is envisaged from movement to power plants with MCL linkage in Maharashtra and Gujarat, on the west coast. Partial import substitution of import-based power plants would add a further 15 mtpa.
Prasad Koparkar, senior director, CRISIL Research said, “A spurt in domestic production would bring down the share of imports in the power sector’s coal demand. While demand will grow at six per cent CAGR (compounded annual growth rate) to 827 million tonnes in FY2022 from 621 million tonnes in FY2017, the share of imports will reduce from 11 per cent to seven per cent. The share of coastal coal in demand will increase from five per cent to seven per cent, which would also ease the congestion on railway tracks.”
Coal transportation contributes 25-30 per cent to the cost of power produced by a plant located 1000 km from the mine it sources. Since coastal shipping is far cheaper compared with transportation by rail, power plants are expected to prefer the coastal route once the loading infrastructure at ports and the rail connectivity projects come on stream.
An estimate by CRISIL shows the savings can be as much as 50-60 per cent for a plant that is located near a port in Tamil Nadu or Andhra Pradesh, and sources coal from a mine in Odisha using a 45,000 dwt (dead weight tonnage) vessel. The savings can increase if a larger vessel is used. For a plant located 200-400 km inland, the savings would be less, though still significant, at 10-20 per cent, factoring in the first and last-mile connectivity by rail to or from the loading/unloading port.
“The connectivity and capacity-related initiatives, though, need to be supported by rationalised coal-linkage policies. Rail tariffs are also a critical monitorable, as higher short-haul and lower long-haul tariffs would impact the overall cost-competitiveness of coastal movement. Further, deployment of larger vessels for coastal movement would be crucial as it will safeguard the cost-competitiveness of seaborne movement over larger distances”, said Binaifer Jehani, director at CRISIL Research.