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India’s power shortage could be exacerbated due to a spat between one of the largest electricity producers in the country, NTPC, and the state owned mining company, Coal India.
NTPC claims that the quality of the coal delivered by Coal India is not nearly good enough, often requiring payloaders to scoop out huge boulders from the mountains of coal supplied by Coal India.
The argument has already started to affect electricity production and supply for many India states, and NTPC has threatened to cut supplies even further if improvements are not made. NTPC has already stopped paying for the supplies of coal/rock, and has refused to sign any new 20-year supply contracts.
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This forced Coal India to reduce supply to two NTPC power plants, and as a result the volume of electricity produced fell, not something that India can afford as it already suffers a 9% shortage of power during times of peak demand.
NTPC is not the only state utility company that has complained about the poor quality of coal supplied by Coal India. S.P Rekhade, the chief engineer at Maharashtra State Power Generation Power Co., said that they “incur an almost 30 percent increase in fuel and transportation costs because of this.”
S. Narsing Rao, the Chairman of Coal India, suggested that the coal supplies leave the mines in a good condition, and must be tampered with during the train journey to the power plants. He explained that they “are open to any sort of quality checks at our mines, but we can’t ensure what reaches the plant. What happens during transit is not our responsibility.”
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…