Fuel Management_NTPC

Report of the
Comptroller and Auditor General of India
on
Fuel Management of Coal Based Power

Stations of NTPC Limited
Union Government (Commercial)

Ministry of Power
Report No. 35 of 2016
(Performance Audit)
Table of Contents
Chapter Description Page No.
Preface i
Executive Summary iii
1 Introduction 1
2 Audit Framework 5
3 Procurement of Domestic Coal 7
4 Import of Coal 19
5 Assessment of Quality and Quantity of Coal 25
6 Coal Supply Management 35
7 Consumption of Coal by Power Stations 41
8 Conclusion and Recommendations 45
Annexures 49
List of Abbreviations 57
Glossary of Technical Terms 59

Preface
The Performance Audit Report has been prepared under the

provisions of Section 19-A of the Comptroller and Auditor
General’s (Duties, Powers and Conditions of Service) Act, 1971,
as amended in 1984. The audit has been carried out in line with
the Regulations on Audit and Accounts, 2007 and Performance
Audit Guidelines, 2014 of the Comptroller and Auditor General
of India.
Coal cost constitutes 60 to 70 percent of the total generation tariff

of coal based power stations and has significant impact on cost of
supply of power to consumers. Keeping this in view, a
performance audit of fuel management in coal based power
stations of NTPC Limited was taken up. The performance audit
covers fuel management of 13 out of 26 coal based power
stations of NTPC Limited and its Joint Ventures during the period
from April 2010 to March 2016.
Audit wishes to acknowledge the co-operation received from

NTPC Limited and Ministry of Power, Government of India at
each stage of the audit process.
i
Report No.35 of 2016
Executive Summary
INTRODUCTION
The installed electricity generation capacity in the country as on 31 October 2016 was
307278 MW out of which coal based capacity was 186493 MW (60.69 percent). NTPC
Limited is the largest power utility in the country, its coal based capacity being 40084 MW
(October 2016).
Coal cost constitutes 60 to 70 percent of the total generation tariff of a coal based power
station and has a major impact on cost of supply of power to consumers. Inefficiencies in
fuel management would increase the energy charges for the stations and cost of power to the
ultimate consumer. Keeping in view the significance of fuel management to affordable
power, the performance audit on fuel management of coal based power stations of NTPC
Limited was carried out. The performance audit covers fuel management of 13 out of 26 coal
based power stations of NTPC Limited and its Joint Ventures during the period from April
2010 to March 2016.
MAJOR AUDIT FINDINGS

Procurement of Domestic Coal
Coal is primarily procured domestically through long term coal linkages from subsidiary
companies of Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) at
notified rates. For all other procurements, such as procurement through MOU, e-auction and
import, the rates are higher.
Stations having inadequate fuel linkage
Examination of fuel linkages revealed that two power stations, viz., Barh-II and Kahalgaon-II,
were operating without long term fuel linkage while Ramagundam-III was operating with
reduced linkage. The three stations incurred an extra expenditure of `2483.39 crore due to
procurement of coal through costly sources during the period from 2010-11 to 2015-16. Fuel
Supply Agreement (FSA) on cost-plus basis was agreed to for Mouda station though New
Coal Distribution Policy did not mandate it. Coal supplied under cost-plus agreement was
costlier than notified rates and resulted in extra fuel cost for Mouda station to the extent of
`31.11 crore from February 2015 to March 2016.
(Para 3.1.1 and 3.1.2)
Delay in signing FSA
There were significant time gaps between Commercial Operation Date and signing of FSA in
five stations, viz., Sipat-I, Rihand-III, Farakka-III, Vindhyachal-IV and Korba-III, which
forced these stations to procure coal under ‘Performance Incentive’ provision of the FSA of
older units, incurring additional fuel cost of `323.37 crore.
(Para 3.1.3)
iii
Performance Incentive paid under FSA

As per New Coal Distribution Policy, 100 percent of the Annual Contracted Quantity (ACQ)
as per the normative requirement of the consumers would be supplied through FSA at
notified prices. However, NTPC agreed to pay performance incentive for supplies above 90
percent of ACQ. This increased fuel cost of 10 stations by `558 crore.
(Para 3.1.4.1)
FSA for stations commissioned after 31 March 2009 provided for payment of performance
incentive on Deemed Delivered Quantity, which included imported coal not actually
delivered to the station. The payment of performance incentive for such notional deliveries
increased the outgo of two power stations (Vindhyachal and Rihand) by `18.43 crore for the
year 2013-14 without any commensurate benefit.
(Para 3.1.4.2)
As per the FSA (both old and new), the trigger level for performance incentive was 90
percent of ACQ. The new FSA (applicable for units commissioned after 31 March 2009)
introduced compensation payable by coal companies in case supply falls below 80 percent of
ACQ. In six stations, both the old and new FSAs with the same coal companies were in
operation. NTPC and CIL arrived at an understanding regarding apportionment of supply
against old and new FSAs; - CIL would consider supply of coal up to 90 percent of the ACQ
in respect of old FSA and after fulfilling minimum commitments (80 percent of ACQ) under
new FSA, the balance supply, if any, would be considered for incentive against old FSAs.
This meant that NTPC paid additional performance incentives for supplies beyond 80 percent
of ACQ in new FSAs. Audit noticed that the extra incentive payment by the stations on this
account was `32.65 crore for the period 2013-14 and 2014-15.
(Para 3.1.4.3)
Deviation in supplies vis-a-vis scheduled quantity

The Annual Contracted Quantity was divided into quarterly scheduled quantities and further
sub-divided into monthly scheduled quantities. FSAs provided that a deviation in monthly
scheduled quantity up to 5 percent can be made with the written consent of both parties, but
total variation in any month shall in no case exceed 10 percent of the scheduled quantity. For
quarterly scheduled quantities, old FSA did not permit any excess supplies, while new FSA
permitted deviation with the written consent of both parties. Examination of data regarding
actual supplies vis-à-vis scheduled supplies revealed that deliveries to stations were rarely as
per schedule. Since FSA provided for calculation of performance incentive/disincentive on
annual basis, intra-year short supplies did not impact the earning of incentive by coal
companies so long as there was no annual shortfall. This led to a paradoxical situation where
the stations suffered generation loss due to coal shortage, while they paid incentives for
additional supplies made over the year.
(Para 3.1.5.1)
iv
Non recovery of compensation for short supplies under FSAs

The FSAs provided monetary compensation for short delivery by coal companies as well as
short lifting by power stations. Performance incentive was also payable by power stations for
annual supplies above 90 percent of ACQ. In the case of three stations, viz., Badarpur,
Jhajjar and Ramagundum, though these stations paid incentive of `128.08 crore,
compensation amounting to `114.68 crore could not be recovered from coal companies. In
the case of Vallur station, though there was significant short supply, compensation was not
even claimed.
(Para 3.1.5.2)
Rationalisation of quantities under FSAs
Badarpur station had two FSAs, one with Eastern Coalfield Limited for an Annual Contracted
Quantity (ACQ) of 2 lakh tonne and another with CCL for ACQ of 40 lakh tonne. CCL had
consistently short supplied coal over 2011-2015 (except in 2012-13) which had attracted
compensation of `21.23 crore. This was claimed, but not received. On the other hand, ECL
had been supplying more than the ACQ in all the five years and the station paid performance
incentive of `47.06 crore. NTPC did not address this situation by re-appropriation of the
quantity among ECL and CCL.
(Para 3.1.5.3)
Procurement of coal through MOUs
In addition to FSAs, power stations entered into Memoranda of Understanding (MOUs) with
coal companies to supplement coal supplies. Procurement of coal through MOUs was not
mandated under New Coal Distribution Policy. High premium was being paid for MOU
procurements, even compared to maximum incentive of 40 percent over notified rates under
FSA. Premium agreed to by NTPC under MOU with Singareni Collieries Company Limited
was higher than FSA rates by `1600.64 crore while the premium agreed to under the MOU
with ECL was higher by `1433.19 crore.
(Para 3.2)
Procurement of coal through e-auction
NTPC procured coal through e-auction to supplement FSA supplies using the price of
imported coal (GCV 5700 kCal/kg) as benchmark for bidding. Since there were significant
differences between the bid price and the actual import price for the grade of coal on offer in
e-auction, two scenarios could occur: (i) where the import price for the grade of offered coal
is lower than the derived price, the bid amount would be on the higher side and the Company
would win the bid by quoting a higher amount for an inferior quality of coal and (ii) where
the import price is higher than the derived price, the Company may be losing the bid.
(Para 3.3)
Import of coal
Policy framework for import of coal
NTPC did not lay down a specific policy for importing coal. In the absence of a
comprehensive policy, different approaches to key decisions such as splitting of quantity
v
among bidders, qualification requirements, type/GCV of coal to be procured,

retendering/annulment, negotiation with bidders etc. were noticed. During the period from
April 2011 to March 2016, 36 of the 40 packages, worth ` 22796.91 crore (approx.), for
36.79 million tonnes of coal accounting for over 75 percent of the procurement by value,
were awarded to a single entity, Adani Enterprises Limited. In order to enhance participation
level, though splitting was introduced, the splitting ratio was modified subsequently, which
had the effect of awarding more quantity to L1 bidder.
(Para 4.1)
Source verification of quantity and quality of coal
To ensure quality of supply, the Qualification Requirement for bidders provided for tying up
with mine owner(s) through a ‘Letter of Authority’ from them. Since the bid prices obtained
with this condition were higher than cost estimates, the requirement regarding ‘Letter of
Authority’ was relaxed and the bidders were asked to furnish list of mines from which supply
would take place. Since the bidders submitted a large list of mines (from 33 to 740 mines),
the source and quality of coal being imported was not assured.
(Para 4.2)
Incorrect adoption of index of coal for import
NTPC imported coal from Indonesia under 15 packages involving 14.6 MMT during
February 2012 to February 2013. NTPC indicated in the contract documents that the
requirement was for GCV of 6300 kCal/kg (on Air Dried Basis-ADB) while the payment
would be based on the index for GCV of 6500 kCal/kg on Gross As Received-GAR basis
instead of 5800 kCal/kg, which was the appropriate index. GCVs worked out on ADB and
GAR basis are considerably different; the GCV being higher on ADB basis compared to
GAR. Difference in price per tonne of Indonesian coal, as per 6500 GAR and 5800 GAR
ranged from 11.97 USD to 18.75 USD
(Para 4.3)
Assessment of Quality and Quantity of coal
Pricing of coal by coal companies and pricing of energy by generating companies depends
significantly on its heat value referred to as ‘Gross Calorific Value (GCV)’.
Sample collection and methods of measurement for coal quality
Measurement of GCV depends on the location from which samples are collected and the
method used to measure GCV. Different methods of measuring GCV were used for different
purposes, viz., GCV was reported on ‘Air Dried basis’ (ADB) for payment of imported coal,
GCV on ‘Equilibrated basis’ (EB) for payment to domestic coal companies and GCV on
‘Total Moisture basis’ (TMB) for energy billing.
GCV on ADB basis gave undue advantage to the supplier since moisture present in the
sample was dried in order to ascertain the GCV for payment. TMB method gives the lowest
GCV and the same is used by stations for billing. As energy tariff is inversely proportional to
GCV, this would lead to higher burden on consumers. Similarly, the method of estimation of
quantity of coal did not provide adequate assurance regarding its accuracy.
(Para 5.1)
vi
Reduction in heat value (Gross Calorific Value) of coal

Audit compared the GCV ‘as billed’ at mine end, GCV ‘as received’ at the unloading point of
the power station and GCV ‘as fired’ in the boilers for a year (from October/November 2012
to September 2013). It was observed that GCV of coal progressively decreased from ‘as
billed’ stage to ‘as fired’ stage, though as per Central Electricity Authority, the three GCV
values should be approximately same, barring minor losses due to storage. More particularly,
the difference in GCV between ‘as received’ and ‘as fired’ values was attributable entirely to
the power stations. Audit ascertained the impact of GCV difference on efficiency and energy
charges. The Station Heat Rate (SHR) ascertained using GCV ‘as received’ indicated that the
power stations were inefficient though SHR as per GCV ‘as fired’ was within the norm fixed
by Central Electricity Regulatory Commission (CERC). The difference in energy charges
considering the ‘as received’ and ‘as fired’ stage for the one year period was `0.03 to `0.96
per unit of electricity for the different stations.
(Para 5.2.1)
Weighment of domestic coal
As per Fuel Supply Agreements (FSA), payment for the coal supplies was made as per
weighment carried out at the delivery/loading point at mine end. The FSAs also provided for
weighment at unloading point (power station) in order to ensure recalibration of weigh
bridges at loading point. However, stations did not regularly weigh domestic coal, though in-
motion weigh bridges were installed in the stations. Due to this, stations lost an opportunity
to cross verify the quantity of coal received and ascertain the resultant transit loss.
(Para 5.3)
Assessment of transit loss through indirect method
CERC Tariff Regulations provided normative transit and handling loss of 0.8 and 0.2 percent
for non-pit head stations and pit head stations respectively. Assessment of actual transit loss
was carried out by way of physical verification of closing stock of coal stored in the yard and
bunker at the end of every quarter using an indirect method called ‘volumetric method’.
Inaccuracy of the transit loss ascertained using this method was evidenced by the fact that
quantity of coal as per the physical verification reports was one to 114 percent more than the
storage capacity of the yards in eight power stations.
(Para 5.5)
Coal Supply Management
One of the important functions in operating a power station is to ensure uninterrupted supply
of coal so that generation loss due to coal shortage does not arise.
Generation Loss due to coal shortage
During 2012-13, the stock level was at super critical position in seven stations for more than
six months and similar situation prevailed in four stations during 2013-14. There was some
improvement in 2014-15, but three stations reported super critical stock levels. Further,
domestic coal stock dropped to zero level at stations during 2012-13 to 2014-15. There were
instances of units being taken out of operation or being operated at partial load in view of
vii
coal shortage. During 2010-11 to 2015-16, 11 out of 13 stations covered in audit reported a
generation loss of 19546.26 million units of electricity with potential revenue loss of
`4299.80 crore. Further, Due to unduly positive presumption regarding coal receipt, four
power stations incurred generation fault penalty in the form of Unscheduled Interchange
charges amounting to `101.41 crore during the period from 2010-11 to 2015-16.
(Para 6.1, 6.2 and 6.3)
Storage capacity of coal yards at power stations
Storage capacity of six stations was less than the space required to store the normative
quantity for 15/30 days’ requirement prescribed under CERC Tariff Regulations. Shortage in
capacity as a percentage of requirement ranged from 2.60 percent (Rihand) to 53.62 percent
(Farakka). Further, imported coal warranted earmarking specific area for its storage limiting
the space for domestic coal.
(Para 6.4)
Storage of domestic coal along with imported coal
As per Local Management Instructions issued by stations, imported coal was to be stacked
separately in earmarked area in the yard. Physical verification reports (April 2010 to March
2016) of coal stock were reviewed in audit and it was observed that domestic and imported
coal were stored in the same yard. Availability of imported coal in excess of earmarked
capacity for it ranged between 6 and 158 per cent indicating that domestic and imported coal
were being mixed at the yard itself before they were actually blended.
(Para 6.5)
Railway logistics
The coal supplied through railway rakes was required to be unloaded within a stipulated
period known as ‘free time’, beyond which demurrage was levied by Railways. Stations
covered in audit had to incur demurrage of `129.67 crore on account of inefficiencies in
unloading coal within stipulated time during the period from 2010-11 to 2015-16.
Railways routinely divert rakes of coal consigned for one consumer to another, due to
congestion on a particular line or route. Audit noticed that the diversion was not always
between power stations of NTPC. In cases where rakes were ‘diverted in’ or ‘diverted out’
between stations of NTPC and other companies, there would be an adverse impact on NTPC
when high GCV coal of NTPC stations were being ‘diverted out’ and low GCV coal of other
companies were ‘diverted in’.
(Para 6.6.1 and 6.6.2)
Consumption of coal
Although yearly average Specific Coal Consumption of stations remained below 1 kg per unit
of power, Audit noticed significant monthly variations. Notably, the maximum SCC in some
cases was very high, at 3.21 kg in Mouda and 1.02 kg in Badarpur.
(Para 7.1)
viii
Blending of imported coal with domestic coal

Imported coal was blended with domestic coal and fired in the boilers. GCV of imported coal
ranged from 5700 to 6300 kCal/kg while that of domestic coal ranged from 2900 to 4200
kCal/kg. Given the very high difference of GCV between domestic and imported coal, it is
expected that blending of imported coal would result in lower consumption of the blended
coal. Audit, however, noticed that the coal used to produce one unit of energy remained the
same, irrespective of whether imported coal was blended to a lesser or greater extent. This
raises doubts whether imported coal was indeed superior to domestic coal even though NTPC
incurred higher cost for procuring it.
(Para 7.2)
Use of washed coal to reduce environmental pollution
Ministry of Environment and Forests stipulated that raw coal has to be cleaned to reduce ash
content to less than 34 percent, if coal is transported beyond 1000 kms or if burnt in
environmentally sensitive areas. As per this, the entire coal to be used should be washed
coal. However, at Dadri station, percentage of washed coal showed a declining trend during
the period from 2010-11 to 2014-15, though the situation was slightly improved in 2015-16.
In the case of Badarpur station, procurement of washed coal, on an average, during 2010-11
to 2015-16 was over 16 percent only.
(Para 7.3)
RECOMMENDATIONS
Based on the audit findings discussed in the report, the following recommendations are made
for efficient fuel management practices in NTPC coal based power stations.
For NTPC
1. The Company may review the procedures for procurement of coal above notified
rates such as incentive procurement, MOU, e-auction and imports.
2. The Company may invoke, wherever feasible, provisions in the existing Fuel Supply
Agreements for inter-station transfer of coal to tide over temporary coal shortages.
3. The Company may formulate a policy for import of coal. Action may also be taken
to ensure source and quality of imported coal.
4. Methods for measurement of GCV for procurement of coal and billing of energy may
be standardized in coordination with competent authorities.
5. Weighment of coal may be carried out at the time of receipt of coal at unloading
point to ascertain the actual transit loss and take remedial measures.
For Ministry of Power
6. Pricing of energy is based on Station Heat Rate, which, in turn, is based on quantity
and quality of coal (GCV) consumed by the stations. While quantity of coal received
is not weighed by the stations, quality assessment of coal has inherent as well as
manmade infirmities due to heterogeneous nature of coal and sampling errors. There
ix
is a need to appropriately review the method for energy pricing. Ministry may
coordinate with Central Electricity Regulatory Commission to examine this aspect in
the light of the audit findings.
7. The commercial terms in FSAs were not in accordance with New Coal Distribution
Policy and FSAs did not have safeguards for intra-year shortfall in deliveries.
Ministry may, therefore, review the terms of FSAs in consultation with Ministry of
Coal/ Coal India Limited to rectify these inadequacies.
The above recommendations were discussed in the Exit Conference held in October 2016 and
the Ministry/NTPC Limited were generally in agreement with the recommendations.
x
Chapter 1
Introduction
1.1 Background
Electricity features in the concurrent list of the Constitution of India. Both the Central and
State governments are vested with the responsibility for development of power sector. In the
1970s, Central Sector Generating Stations (CSGS) were established to accelerate power
development in the country. The capacity of the CSGS was ‘shared’ among Beneficiary
States1, which were given allocations from the CSGS. The installed capacity in the country as
on 31 October 2016 was 307278 MW out of which coal based capacity was 186493 MW
(60.69 percent). The XII Five Year Plan document noted that, while the pace of addition to
generating capacity was commendable, there had not been comparable progress in delivering
fuel. Availability of both coal and gas to the new power stations was not assured. Resolution
of this problem was accorded high priority in the XII Plan.
1.2 Profile of the Company

NTPC Limited (Company) was one of the CSGS incorporated in November 1975 to plan and
promote development of thermal power in the country. The first station (200 MW) built by
the Company was commissioned in 1982 at Singrauli. The Company became a listed
company in November 2004. It became a ‘Navratna’ company in 1997 and a ‘Maharatna’
company in May 2010. The Company has five subsidiaries and 21 Joint Ventures (JVs) as on
31 March 2016. The Government of India holds 69.74 percent (as on 31 March 2016) of the
total equity of `8245.46 crore of the Company.
The Company is the largest power utility in the country with 15.37 percent of the total
installed capacity. The number of power stations of the Company including its JVs and
installed capacity as of October 2016 were as follows:
1
Installed capacity of power stations under the Central Sector Generating Stations is shared among individual States and
these States are referred as ‘Beneficiary States’.
1
Table-1.1: Types of generation facilities commissioned as of October 2016

Generation facility type No. of stations Installed Capacity (MW)
A. Owned by NTPC
Coal 182 35,085
Gas/Liquid Fuel 7 4,017
Hydro 1 800
Renewable energy projects 9 360
Total (A) 35 40,262
B. Owned by JVs/Subsidiaries
Coal 8 4,999
Gas 1 1,967
Total (B) 9 6,966
Grand Total (A+B) 44 47,228
1.3 Organisational Structure

The Board of Directors of the Company comprised seven functional Directors including the
Chairman and Managing Director (CMD), two Government nominee Directors and nine
independent Directors. The Company has eight regional offices located at Dadri (Dadri,
Badarpur and Faridabad), Lucknow (Northern Region), Mumbai (Western Region-I), Raipur
(Western Region-II), Patna (Eastern Region-I), Bhubaneshwar (Eastern Region-II),
Secunderabad (Southern Region) and Dehradun (Hydro). The Company also has 26 project
offices/power stations spread across the country.
1.4 Fuel Arrangements

Coal based capacity of the Company (including JVs/subsidiaries) was 40084 MW (October
2016), which constituted 85 percent of installed capacity of the Company, and 21 percent of
coal based capacity in the country. Long term fuel supply agreements (FSA) entered into with
subsidiary companies of Coal India Limited (CIL) and Singareni Collieries Company Limited
(SCCL) were the main source of coal for the coal fired power stations of the Company. To
meet the shortfall of domestic coal, the Company participated in e-auctions conducted by CIL
and its subsidiaries since 2009-10. Domestic coal was also being procured through
Memorandum of Understanding (MOU) with coal companies. Imported coal was also
procured and blended with domestic coal. The Company was allocated eight captive coal
blocks with estimated geological reserves of 7 billion tonnes but production from these
blocks has not yet started (March 2016)
Details of coal procurement by the Company from different sources during the last six years
(2010-11 to 2015-16) are tabulated below:
2
Out of the 18 coal stations, nine are pit-head stations and nine are rail-fed (non-pit head) stations.
2
Table-1.2: Details of coal procurement from different sources
Coal Coal through

Total coal Imported coal
Coal procured e-auction to
procured from to total coal
Year imported through total coal
all sources procured
e-auction procured
( in Million Tonnes) In percentage
2010-11 137.30 10.5 0.08 7.65 0.06
2011-12 140.99 12.0 0.38 8.51 0.27
2012-13 155.00 9.1 2.28 5.87 1.47
2013-14 160.63 10.8 3.20 6.72 1.99
2014-15 167.40 16.4 0.94 9.80 0.56
2015-16 161.80 9.70 0.29 6.00 0.18
1.5 Performance Audit

Fuel management is an area of concern for the operational performance of the Company as
coal stock fell to critical and supercritical levels3 at coal fired stations during the period from
2012-13 to 2015-16. Coal cost constitutes 60 to 70 percent of the total generation tariff of a
coal based power station and has a major impact on cost of supply of power to consumers.
Operational efficiency of power stations is regulated through a parameter called ‘Station Heat
Rate’ (SHR)4, which denotes the input heat value incurred by the station to produce one unit
of energy. SHR depends on the quantity as well as quality/grade of coal used by the station.
Inefficiencies in fuel management would increase the energy charges for the stations and cost
of power to the ultimate consumer. The performance audit was carried out keeping in view
the significance of fuel management in power stations to affordable power.
3
Critical level – Coal stock above four days, but below seven days. Supercritical level – Coal stock below four days.
4
Station Heat Rate = Quantity of coal x Gross Calorific Value
No. of units of energy generated
3
Chapter 2
Audit Framework
Framework
2.1 Scope of Audit

The performance audit covers fuel management of 13 out of 26 coal based power stations of
the Company and its Joint Ventures (JV)/subsidiaries (18 stations of NTPC and 8 stations of
subsidiaries and JV companies). Audit examination covered the period from April 2010 to
March 2016.
2.2 Audit Sample

13 power stations were selected for detailed examination comprising a mix of new and old
power stations of NTPC. The sample included seven stations that were built during the XII
Plan period, while the remaining six stations were selected based on their geographical
location.
Table-2.1: Stations selected for audit
Sl. No. Name of station Sl. No. Name of station
1 Dadri 8 Mouda
2 Badarpur 9 Farakka
3 Jhajjar (JV)5 10 Barh
4 Vindhyachal 11 Talcher Thermal
5 Korba 12 Ramagundam
6 Sipat 13 Vallur (JV)6
7 Rihand
In addition, 36 out of 40 imported coal packages awarded during the period from April 2011
to March 2016 were examined. In respect of examination of coal linkages and monitoring of
coal stock including storage capacity, stations not included in the sample were also covered.
2.3 Audit objectives

The objectives of this performance audit were to assess whether:
(i) All stations had fuel security through long term fuel linkages;
(ii) Procurement of coal and inventory management were carried out economically,
efficiently and effectively;
(iii) Proper controls existed for monitoring consumption of coal by stations;
(iv) Proper procedures were followed for assessing quality and quantity of coal; and
(v) Billing of energy charges was done in compliance with the Tariff Regulations
issued by Central Electricity Regulatory Commission (CERC).
5
Indira Gandhi Super Thermal Power Station of Aravali Power Company Private Limited, Jhajjar, Haryana (JV of NTPC,
Indraprastha Power Generation Company Limited and Haryana Power Generation Company Limited with shareholding
of 50 percent, 25 percent and 25 percent respectively).
6
Vallur Thermal Power Station of NTPC Tamil Nadu Energy Company Limited (JV of NTPC and Tamil Nadu Electricity
Board with shareholding of 50 percent each)
5
2.4 Audit criteria

Audit criteria for the performance audit were drawn from:
(i) Tariff Policy, 2006 issued by Ministry of Power.
(ii) New Coal Distribution Policy issued by Government of India (Ministry of
Coal).
(iii) CERC (Terms and Conditions of Tariff) Regulations, 2009 and 2014.
(iv) Petitions filed by the Company before Regulatory and judicial fora and
documents relating to the petitions.
(v) Central Electricity Authority norms for long term coal linkages.
(vi) Fuel Supply Agreements and Memoranda of Understanding with coal
companies.
(vii) Minutes of meetings of Board of Directors and Board level sub-committees.
(viii) Contract packages for import of coal.
(ix) Local Management Instructions issued by stations.
2.5 Audit Methodology

Prior to commencement of audit, an entry conference was held with the Management of
NTPC on 02 September 2015 where the audit scope, objectives, criteria and sample were
discussed. Audit of the selected stations was carried out between September 2015 and
January 2016 and the draft Performance Audit report was issued to NTPC on 26 February
2016. The replies of NTPC were received on 27 April 2016 and an exit conference was held
with them on 16 May 2016. The responses of the Management were incorporated in the
report and the revised draft report was issued to Ministry of Power on 01 September 2016.
An exit conference was held on 24 October 2016 with Ministry of Power to discuss the report
and responses of the Management. Subsequently, on 10 November 2016, detailed replies of
Ministry of Power were received which have also been considered while finalizing the report.
2.6 Acknowledgement
Audit acknowledges the cooperation extended by Ministry of Power and the Management of
NTPC and its JVs in smooth conduct of this performance audit.
2.7 Audit Findings

Audit findings are grouped under the following Chapters:
Chapter 3 - Procurement of Domestic Coal
Chapter 4 - Import of Coal
Chapter 5 - Assessment of Quality and Quantity of Coal
Chapter 6 - Coal Supply Management
Chapter 7 - Consumption of Coal by Power Stations
Chapter 8 - Conclusion and Recommendations
6
Chapter 3
Procurement of Domestic Coal
Coal is primarily procured by NTPC domestically through long term coal linkages from
subsidiary companies of Coal India Limited (CIL) and Singareni Collieries Company Limited
(SCCL). Any shortfall is met by domestic procurement through Memorandum of
Understanding (MOU) or e-auction and also by import. Coal is generally procured through
long term linkages at CIL/SCCL notified rates. For all other procurements (through MOU, e-
auction and import), the rates are higher.
Audit examined supplies through both domestic and imported sources. Observations
regarding procurement of domestic coal are summarized in this Chapter while those relating
to imported coal are at Chapter 4.
3.1 Fuel Supply Agreements (FSA)

Coal linkage for power stations was granted by Standing Linkage Committee (Long Term)
(SLC-LT) of Ministry of Coal (MoC) based on recommendation of Central Electricity
Authority (CEA) and inputs from the generating and coal companies. MoC notified the New
Coal Distribution Policy (NCDP) in October 2007, outlining the policy framework for
distribution of coal to various categories of coal consumers including power stations.
Execution of Fuel Supply Agreements (FSA) between coal companies and consumers of coal
became mandatory under NCDP. FSAs lay down conditions regarding contracted quantity,
quality of coal to be supplied, procedure for checking quality of coal, source of supply,
commercial terms etc. Two versions of FSA were signed, one for stations commissioned
prior to 31 March 2009 (regarded as existing consumers under NCDP) and another for
stations commissioned after 31 March 2009 (called new consumers under NCDP).
The rates for supply of coal under FSAs were notified by CIL. Additional quantities of coal
(over and above FSA quantities) would be available to the power stations at a higher rate,
fixed at 40 percent above the notified rates. Audit noticed shortcomings in implementation of
FSAs to the detriment of the power stations of NTPC.
3.1.1 Stations having inadequate fuel linkage

The Company had 34 FSAs (21 for stations commissioned prior to 31 March 2009 and 13 for
stations commissioned after 31 March 2009) for its coal fired power stations (March 2016).
Total Annual Contracted Quantity (ACQ) under these FSAs was 164.17 MTPA (million
tonnes per annum). Audit examination on the adequacy of coal linkages in power stations
revealed the following:
3.1.1.1 Barh-II power station

Coal requirement of Barh-II (2 x 660 MW) power station was to be met from the captive coal
blocks allocated to the Company, but production from these coal mines was delayed. Though
the scheduled Commercial Operation Date (COD) of first unit of Barh-II was in January
7
2013, the Company took up the matter regarding tapering linkage7 for Barh-II only in April
2013. In September 2015, Ministry of Coal decided to supply coal at notified price, as a
special case, till decision regarding tapering linkage was taken. Two MOUs for supply of coal
were signed in October and November 2015.
The first unit of Barh-II was commissioned on 15 November 2014 and for the period from
November 2014 to November 2015, the Company tapped costly sources like e-auction and
imported coal for running the station, incurring extra expenditure of `527.43 crore. Audit
observed that the FSAs signed by the Company for other stations commissioned prior to 31
March 2009 allowed transfer of coal among stations wholly owned by the Company. But this
provision was not invoked to meet the coal requirement of Barh-II. Even, the initial
carpeting8 of the coal yard was done using costly coal by incurring extra expenditure of `5.28
crore.
Ministry stated (November 2016) that it was the first time Super Critical Technology based
660 MW thermal power plant was being installed by an Indian Company (BHEL), and during
the execution of the project it was felt that actual commissioning of the unit may take more
time due to various complex technological issues being faced at the station. Regarding inter-
plant transfer, Ministry stated that this was not possible from Barh-I and other stations
covered by new FSA9 . Ministry added that NTPC had requested MoC for tapering coal
linkage to Barh-II in April 2013 and as a as a special case, MoUs at notified prices were
agreed (September 2015) by MoC till grant of tapering coal linkage. Ministry further stated
that the station got approval for Bridge Linkage (earlier referred to as tapering linkage) in
March 2016 and MOUs with coal companies for supply were signed in August 2016.
The reply is to be viewed against the fact that fuel tie-up was one of the pre-requisites for
project implementation. Hence the Company should have taken timely action for obtaining
tapering/bridge linkage or considered inter-plant transfer which was permissible under the
old FSAs. Audit also noticed that for supplies under Bridge Linkage for Barh-II, the
Company has agreed to coal prices demanded by the coal company which were 10 percent
above notified rates 10 , though notified rates were applicable for coal supplied under the
‘linkage’ route. The higher prices, agreed to (August 2016) by the Company would
correspondingly increase energy charges for the station.
3.1.1.2 Kahalgaon-II power station

Existing power stations as on 31 March 2009 were given coal linkages (Annual Contracted
Quantity - ACQ) as per the recommendation of CEA. In the case of Farakka (1600 MW) and
Kahalgaon-I (840 MW), CEA recommended (April 2009) a combined ACQ of 15 MTPA as
against the requirement of 22.94 MTPA. The reason for the reduced linkage was the delay in
production from linked mines and constraints in railway logistics cited by CIL. In the case of
7
Tapering linkage is the short-term linkage provided to those coal consumers who have been allotted captive coal blocks
for meeting their coal requirements of their linked end-use plant where production of coal from these blocks does not
synchronize with the requirements of the end-use plant.
8
It is a layer of compressed coal, which is spread on the yard to serve as a carpet upon which further heaps of coal are
placed.
9
As per this FSA, diversion for plants linked to captive coal blocks was not permissible.
10
Except for higher grade coal (Up to G5 grade and WCL coal).
8
two units of Kahalgaon-II (2 x 500 MW), CEA stated (June 2009) that ACQ for these units
would be recommended separately as and when additional coal was available from the linked
mines or movement of additional coal was made possible by Railways. CIL, however,
clubbed the coal requirement of Farakka, Kahalgaon-I and Kahalgaon-II and the Company
signed (August/September 2011) FSAs for 15 MTPA for all the three stations. Though
NTPC took up the issue both with CEA, CIL/Ministry of Coal, it could not succeed in
enhancing coal allocation for these three stations. Finally, Ministry of Coal informed (March
2014) NTPC that the issue could not be decided at that point in time.
Audit observed that the coal companies actually supplied more than the ACQ but demanded
performance incentive (PI) at applicable rates, i.e., 40 percent over and above the notified
rates, which was the highest slab rate payable for supplies beyond ACQ. The station paid PI
amounting to `476.14 crore for coal supplies beyond ACQ, at 40 percent above notified rates
during the period from 2012-13 to 2015-16.
Ministry stated (November 2016) that the request to increase the ACQ was turned down by
CIL and it had no option but to sign FSAs with Eastern Coalfields Limited for ACQ of 15
MTPA. It was added that NTPC continuously took up the issue at different levels for an
upward revision in ACQ ever since ACQ was finalized but did not succeed. Ministry further
added that in the deliberations between NTPC and CIL in July 2016, CIL has agreed to
supply additional 3.69 Million MTPA to Kahalgaon under the FSA terms and conditions.
Ministry’s reply indicates that additional supply at FSA rates has been agreed to,
implementation of which would be watched in future audits. However, running two units of
Kahalgaon II having capacity of 1000 MW entirely on costlier sources of fuel for four years
(2012-13 to 2015-16) increased the fuel cost of the station which in turn was passed on to the
consumers through power tariff.
3.1.1.3 Ramagundam III power station

In order to meet the coal requirement of Ramagundam-III, the Standing Linkage Committee
(Long Term) of Ministry of Coal (MoC) offered (September 1998) a linkage of 2.5 MTPA
from Western Coalfield Limited (WCL). Later, MoC accorded in principle approval for coal
linkage of 2.5 MTPA from South Eastern Coalfields Limited (SECL) in September 1999.
However, NTPC did not sign the FSA for coal linkage of 2.5 MTPA with either WCL or
SECL before commissioning the unit on 25 March 2005.
In October 2007, the New Coal Distribution Policy (NCDP) was notified stating that coal at
notified price would be available only on signing of FSA. NTPC signed FSAs with SECL
(26 July 2011) and Mahanadi Coalfields Limited (MCL) (15 July 2011) for supply of ACQ of
1 MTPA (0.5 MTPA each). As against the requirement of 2.5 MTPA, the FSAs ensured 1
MTPA of coal as CIL expressed its inability to supply more. Consequently, NTPC incurred
extra expenditure of `1474.54 crore due to procurement of coal through costly sources (MOU
and e-auction) during the period from 2010-11 to 2015-16.
Ministry stated (November 2016) that coal supply under FSA became mandatory only after
introduction of New Coal Distribution Policy (NCDP) in October 2007 and till such time
Standing Linkage Committee Short Term (SLC- ST) used to approve coal linkage on
9
quarterly basis from time to time. Ministry added that SECL and MCL mines were located far
away from the station. Ministry further stated that ACQ from MCL and SECL have now
been transferred to Singareni Collieries Company Limited (SCCL) on 21 January 2016 as per
the recommendations of New Inter-Ministerial Task Force (IMTF) and subsequently, NTPC
requested (March 2016) SCCL to revise the ACQ for Ramagundam as per approved linkage.
The reply is not tenable. FSA mechanism was prevalent even before NCDP. In the instant
case, NTPC had failed to sign the FSA with either WCL or SECL, when it had the approval
of Ministry of Coal (in September 1999), much before commissioning of the unit in March
2005. Subsequently, the Company had to sign the FSA for supply from the same distant
mines and agree to a lower ACQ, which resulted in extra expenditure.
3.1.2 Coal pricing done on cost plus basis for Mouda FSA
Mouda station was granted (21 June 2010) coal linkage of 1.78 MTPA from WCL mines for
Unit II of Stage-I. FSA was signed by the station in September 2013. At the time of
implementation of FSA, WCL stated that it was not in a position to supply coal at notified
rates and offered coal on ‘cost-plus basis’. Coal supplied under cost-plus agreement was
costlier than notified rates. Execution of another FSA on cost-plus basis was initially resisted
by the Company but eventually agreed to at a review meeting held on 30 August 2013 and
cost plus FSA for 0.6 MTPA was signed in January 2015.
Audit observed that NCDP envisaged supply of coal at rates declared/notified by CIL for
power utilities and there was no provision for coal supply on cost-plus basis. As such, the
Company’s acceptance of cost-plus prices was not in line with NCDP and has resulted in
extra fuel cost of `31.11 crore11 during the period from February 2015 till March 2016.
Ministry stated (November 2016) that the Letter of Assurance (LOA) dated 21.06.2010
issued by WCL provided that in case the quantity of normative requirement necessitates
opening of a dedicated mine, then coal shall be priced at the higher of the cost plus
reasonable return or such notified price. Ministry added that as WCL did not have coal
quantity available for supply at notified prices, it had identified New Majri mines from
which cost plus coal can be supplied to Mouda Unit 2 in terms of the LOA. Ministry further
stated that the issue was taken up with WCL/CIL, MoP/MoC for signing of FSA at
notified price after finalization of the model FSA-2012. However, MoC, vide letter dated
02 September 2013 communicated to MoP that WCL could supply coal from only cost-plus
mines and requested MoP to advise NTPC to sign cost-plus FSA with WCL. There was no
option available to NTPC but to sign cost plus FSA with WCL, as directed.
The reply is to be viewed against the fact that Standing Linkage Committee – Long Term, in
its meeting dated 30 April 2002, had decided that cost plus pricing should be resorted to only
in those cases where the consumer seeks supply from a specific mine. As in the present case,
NTPC did not seek supply from a specific mine, NTPC ought not to have agreed to cost plus
pricing. Moreover, NCDP provided for supply of coal at notified rates only and did not
envisage cost plus pricing for coal.
11
Cost plus price agreed by the Company was `1926.62 per tonne, while notified price was `1070 per tonne (G9 grade).
Quantity delivered was 3,63,213.55 tonne. Hence, excess cost is equal to `31.11 crore (`1926.62 – `1070 x 3,63,213.55).
10
3.1.3 Additional fuel cost due to long time taken in signing Fuel Supply Agreement
Audit observed that there were significant time gaps between Commercial Operation Date of
units and signing of FSA by five stations in the audit sample. Two of these stations, viz.,
Farakka and Korba entered into MOU with coal companies but the MOU quantity was not
adequate to meet the requirement of the station. These stations were forced to procure coal
under ‘Performance Incentive’ provision in the existing FSA of older units, incurring
additional fuel cost as explained below:
Table-3.1: Performance Incentive paid due to long time taken in signing FSA
Name of the Details of Unit Coal procured PI paid for new units
station Commercial FSA date Time gap for new units during the period
Operation in signing against old between COD to FSA
Date (first FSA FSA `crore)
signing(`
unit) (months) (In Tonnes)
Farakka-III 01.04.2012 11.7.2013 15 1280471 90.74
Korba-III 20.03.2011 17.07.2013 27 2366031 7.51
Vindyachal-IV 01.03.2013 02.09.2013 6 931649 19.24
Rihand-III 19.11.2012 02.09.2013 10 1685772 37.35
Sipat-I 25.05.2012 01.09.2013 16 6425236 168.53
Total 323.37
Ministry stated (November 2016) that delay in signing of MOU was on the part of CIL
subsidiary. Ministry added that the model FSA was provided by CIL only in April 2012, with
many one sided provisions in CIL’s favour which led to protracted negotiations and
consequent delay. Ministry further stated that the time invested in negotiation with CIL
before signing of FSAs may not be deemed as delays since NTPC tried to protect the interests
of consumers only.
It needs to be highlighted here that the time gap in signing FSA led to extra expenditure of
stations for sourcing coal by paying incentive, which, in turn, was passed on to the
consumers. Moreover, protracted negotiations did not yield significant dividends in
commercial terms.
3.1.4 Performance incentive paid under FSA

Commercial terms in the FSA were incorporated after negotiations between the Company and
CIL. Audit noticed that conditions for payment of performance incentives by power stations
were agreed to in disregard of NCDP to the detriment of the Company as discussed in
succeeding sub-paragraphs:
3.1.4.1 Payment of Performance Incentive for quantities within ACQ

As per NCDP, 100 percent of the quantity as per the normative requirement of the consumers
would be considered for supply of coal through FSA at fixed prices to be notified by CIL.
However, the Company agreed to pay performance incentive for supplies above 90 percent of
ACQ (10 percent performance incentive for supply between 90 and 95 percent of ACQ and
20 percent performance incentive for supply between 95 and 100 percent of ACQ). This
11
resulted in increased fuel cost for the stations examined in audit. The incentive paid within
ACQ in case of 10 stations12 was ` 558.00 crore (2010-11 to 2015-16).
Ministry stated (November 2016) that NCDP authorizes CIL to declare/notify prices for coal
supplies, and during discussions held on 08 April 2009 between CEA, CIL, NTPC and other
power utilities, it was informed that in the coal shortage scenario, coal companies would be
motivated to produce more coal with the incentive provision. Ministry added that
Performance Incentive (PI) being applicable only for supplies above 100 percent of ACQ
might have resulted in higher notified prices and under such a scenario, even the coal
supplied below 80 percent ACQ would have attracted increased fuel charges. Ministry further
stated that it was a collective decision of CEA, CIL and power utilities including NTPC and
not a clause agreed to by only NTPC. Ministry further added that NTPC has taken up with
CIL for PI to be restricted to supplies beyond 95 percent of ACQ (@ 10 percent only) and
CIL/ECL have now withdrawn PI for the coal of G5 Grade and above.
The reply confirms that the commercial terms of FSA agreed to by NTPC were beyond the
rates specified by NCDP. As NCDP is the overarching framework for coal linkage, NTPC
ought to have stressed its implementation, particularly as the incentives agreed to in the
negotiated FSAs were not in the interest of the Company.
3.1.4.2 Payment of PI on Deemed Delivered Quantity

The amount of PI to be paid by the Company is worked out on the basis of the quantity of
coal delivered during the year. The FSA for stations commissioned after 31 March 2009
provided that PI was to be paid on Deemed Delivered Quantity13 (DDQ) which included
imported coal not actually delivered to the station, having been surrendered by the Company.
The payment of PI for notional deliveries of imported coal increased the outgo of the power
stations without any commensurate benefit.
Audit observed that two stations in the Audit sample paid ` 18.43 crore (Vindhyachal `5.86
crore and Rihand `12.57 crore) towards PI on such DDQ for the year 2013-14.
Ministry informed (November 2016) that during negotiations on FSA terms, NTPC insisted
that PI should be payable on actual deliveries but CIL did not agree. Ministry added that CIL
later amended the provision and from 2014-15 onwards, PI is payable on actual quantity only.
While the response regarding corrective action taken is noted by Audit, the fact remains that
the correction has been done for 2014-15 onwards and the amount of PI of ` 18.43 crore
(pertaining to 2013-14) paid by Vindhyachal and Rihand stations would not be recovered
even with the change in FSA terms.
12
Dadri (` 1.85 crore), Vindyachal (` 130.18 crore), Talcher (` 15.14 crore), Sipat (` 27.76 crore), Rihand (` 60.85 crore),
Farakka (` 42.70 crore), Korba (` 63.72 crore), Ramagundum (` 150.88 crore), Badarpur (` 4.28 crore) and Kahalgaon
(` 60.64 crore). The incentive paid in case of Vallur and Jhajjar was Nil.
13
As per FSA for stations commissioned after 31March 2009, the coal companies can offer imported coal up to a certain
percentage to meet their minimum supply requirements (80 percent of ACQ). Such imported component agreed was 15
percent of ACQ for the years 2012-13 to 2014-15, 13 percent of ACQ in the year 2015-16 and 5 percent of ACQ for the
year 2016-17 onwards. NTPC has the option to surrender the imported coal so offered, in which case it would be
considered as Deemed Delivered Quantity or DDQ.
12
3.1.4.3 Additional payment of PI

As per the FSA (both old and new), the trigger level for PI was 90 percent of ACQ. The new
FSA (applicable for units commissioned after 31 March 2009) introduced a compensation
payable by coal companies in case supply falls below 80 percent of ACQ. Thus, as per the
new FSA, there was a dead band for supply between 80 and 90 percent of ACQ which
entailed neither payment of incentive nor receipt of compensation.
Audit observed that in six stations 14 , both the old and new FSAs with the same coal
companies were in operation. NTPC and CIL arrived (12 March 2013) at an understanding
regarding apportionment of supply against old and new FSAs. CIL would consider supply of
coal up to 90 percent of the ACQ in respect of old FSA and after fulfilling minimum
commitments (80 percent of ACQ) under new FSA, the balance supply, if any, would be
considered for incentive against old FSAs. This effectively implied that NTPC would need to
pay additional PI for supplies beyond 80 percent of ACQ in new FSAs. Audit noticed that the
extra incentive payment made by five stations15 on this account was `32.65 crore for the
period 2013-14 and 2014-15.
Ministry stated (November 2016) that this was a commercial agreement reached in apex level
meeting between CMDs of the two organisations.
The reply is not acceptable as the understanding arrived at between NTPC and CIL was
disadvantageous to NTPC. Moreover, the additional expenditure incurred by NTPC has been
passed on to the consumers.
3.1.5 Implementation of Fuel Supply Agreement

While FSA terms were negotiated at the corporate level, its implementation was carried out at
the station level. Audit observed following shortcomings regarding implementation of FSA:
3.1.5.1 Deviation in monthly and quarterly scheduled quantities

The ACQ was divided into quarterly scheduled quantities, viz., 25 percent each of ACQ in
first and third quarter, 22 percent in second quarter and 28 percent of in the fourth quarter.
Quarterly quantity was further divided into monthly scheduled quantity, which is one third of
the quarterly quantity. FSAs provided that the deviation in monthly scheduled quantity up to
5 percent can be made with the written consent of both the station and the coal company but
total variation in any month shall in no case exceed 10 percent of the scheduled quantity. For
quarterly scheduled quantities, old FSA did not permit any excess supplies, while the new
FSA permitted deviation with the written consent of both the station and the coal company.
Audit examined data regarding actual supplies vis-à-vis scheduled supplies in respect of
stations selected in audit sample and observed that there were significant deviations in
deliveries to stations, as given in Annexure 3.1. It was noticed that the supplies were rarely
as per schedule and the deviation in supplies were beyond the permitted level in majority of
months at all stations.
14
Farakka, Kahalgaon, Simhadri, Korba, Vindhyachal, and Rihand.
15
Rihand - ` 12.00 crore; Vindhyachal - ` 8.08 crore; Kahalgaon - ` 1.47 crore; Farakka - ` 9.29 crore; and Korba-
` 1.81 crore.
13
FSAs provided for monetary compensation for both short delivery by coal companies and
short lifting by power stations when the annual supplies were below the specified trigger
level. Audit observed that the earning of incentive by coal companies were not affected as
long as there was no annual shortfall of supply. This led to a paradoxical situation where the
stations suffered generation loss due to coal shortage while paying incentives for additional
supplies made over the year. Review of records in audit did not indicate that the Company
escalated this issue with coal companies to seek a remedy, though intra-year/temporary
shortages forced the Company to tap costly sources of coal through e-auction, MOU and
imports.
Ministry stated (November 2016) that NTPC regularly monitors the level of coal supplies and
makes a very regular follow-up with coal companies for supplying coal. Ministry added that
in a scenario of coal shortages, NTPC had no option but to agree to this clause and that NTPC
shall again take up the issue with coal companies.
Considering that there was no disincentive in the FSA for short supply of monthly/quarterly
quantities and the significant impact such short supply had on power stations, there may be a
need to introduce safeguards in the FSA to enforce timely delivery of scheduled quantities,
including monthly and quarterly supplies.
3.1.5.2 Non recovery of compensation for short supplies under FSAs

Review of payment of incentive by power stations on account of annual supplies beyond 90
percent and receipt of compensation from coal companies for short supplies below 80 percent
of ACQ revealed the following:
(i) Badarpur power station: In the case of FSA with CCL, there was short delivery vis-
a-vis ACQ in all the years of the period covered in audit. The stations claimed short delivery
compensation of `21.23 crore for 2010-11, 2011-12 and 2013-14 but CCL did not accept the
claim attributing the short delivery to force majeure conditions. The claim of ` 0.15 crore
(2011-12) was waived off by the station and claim of ` 21.08 crore (2010-11 and 2013-14)
was under consideration for waiver/verification. However, for a single year (2012-13), the
delivery had been above 90 percent and for this, performance incentive of `1.21 crore was
released to CCL. Thus on the one hand, Badarpur station failed to get the compensation
amount for short delivery of coal from CCL amounting to `21.23 crore (2010-11 to 2015-16)
as per the provisions of FSA, and at the same time, released performance incentive of
`1.21crore to CCL.
(ii) Ramagundam power station: South Eastern Coalfields Limited (SECL) and MCL
could not adhere to the ACQ and short supplied coal (except in 2013-14 by SECL and in
2010-11 by MCL). Audit noticed that the station had claimed compensation for the short
supply of coal amounting to `35.18 crore (2010-11 to 2015-16), which was not received
(October 2016). However, the station paid performance incentives amounting to `126.87
crore to the coal companies for additional supplies in 2010-11 and 2015-16. Payment of
performance incentive without recovery of compensation for short delivery was, therefore,
not in order.
14
(iii) Jhajjar power station: During 2013-14 and 2014-15, there was supply deficit of
69.89 percent and 68.17 percent respectively vis-à-vis the ACQ. The compensation amount
of `58.27 crore was not recovered by the station from MCL with whom it had FSA.
(iv) Vallur power station: From 2013-14 to 2015-16, the level of delivery of coal by
MCL was short of ACQ by 36.31 percent (2013-14), 48.07 percent (2014-15) and 46.18
percent (2015-16). However, the Company did not claim any compensation from MCL.
Ministry stated (November 2016) that short supply of coal by the coal companies was on
account of less rakes supplied by Railways and hence, the power stations were not eligible for
the compensation. Regarding payment of PI, Ministry stated that the same was done in terms
of relevant clauses of FSA.
The reply points out reasons for short supply of coal by the coal companies. Audit, however,
has highlighted the payment of incentives to the coal companies by power stations despite
short supplies particularly as short supply of fuel as pointed out above has a significant
impact on functioning of the power stations.
3.1.5.3 Rationalisation of quantities under FSAs

Badarpur station had FSAs with ECL for an ACQ of 2 lakh tonne and with CCL for ACQ of
40 lakh tonne. Audit observed that CCL had consistently short supplied coal in all years
covered in audit (except in 2012-13), which had attracted compensation of `21.23 crore from
CCL. This was claimed, but were being considered for waiver by the station. On the other
hand, ECL had been supplying more than the ACQ in all the five years and NTPC paid
performance incentive of `47.06 crore during this period (2010-11 to 2014-15) to ECL.
However, audit examination did not indicate that NTPC tried to address this situation by
taking up the matter either with SCL-LT, Ministry of Coal or with Ministry of Power for re-
appropriation of the quantity among ECL and CCL.
Ministry stated (November 2016) that NTPC took up the matter regarding rationalization of
ACQ with CIL and the ACQ with CCL has been reduced from 4.00 to 1.72 Million MTPA in
September 2016 and the balance quantity has been allocated to other station(s). Ministry
added that FSA with ECL has been cancelled.
The action taken by the Ministry/ NTPC and resultant correction in allocation is noted.
3.2 Procurement of coal through MOUs

In addition to FSAs, power stations entered into Memoranda of Understanding (MOUs) with
coal companies to supplement coal supplies. Procurement of coal through MOUs was not
mandated under NCDP which provided for FSAs and e-auctions. Audit noticed that high
premium was being paid for MOU procurements, even compared to maximum incentive of
40 percent over notified rates under FSA:
• Premium agreed by NTPC under MOU with SCCL was higher by `1600.64 crore
(during April 2010 to March 2016).
• MOU of NTPC with ECL (January 2014 to March 2016) provided for premium of
`1433.19 crore while MoU with NCL allowed for premium of `394.45 crore.
15
While entering into MOUs, NTPC compared the imported rates for coal. It was, however,
noticed that the procurement cost under MOU was in some cases higher than the cost of
imported coal. This was noticed in three stations, viz., Simhadri, Ramagundam and Talcher
Kaniha. Besides, in July 2014, the import parity criterion was waived off for other stations,
viz., Barh, Mouda, Dadri, Korba and Sipat, citing declining trend of imported coal prices,
which also resulted in high cost coal being procured under MOUs.
Ministry stated (November 2016) that the premium for MOU coal was mutually agreed based
on the premium realized by the coal companies in e-auctions in the past period and hence it
may be reasonably deemed as the price discovered through competitive procurement only.
Ministry added that alternatively, NTPC could have participated in the e-auctions conducted
by the coal companies, but in such cases there was no assurance of winning the bids and as
such coal security essential for running the power plant would not be available. Ministry
further stated that power stations were designed for domestic coal and there were technical
restrictions of blending imported coal with domestic coal and to avoid loss of generation,
stations had to tie-up domestic coal, in spite of prices being more than imported coal on some
occasions. Ministry also stated that coal companies with whom MoUs have been entered are
public sector entities.
The reply is to be viewed against the fact that there has been no price discovery in case of
MOUs and the premium payable under MOU procurement was decided only through
negotiation. Agreeing to significantly higher rates, even considering the maximum incentive
amount under FSAs would increase the power generation costs which would eventually be
passed on to the consumers. Moreover, MOU route of coal procurement was not envisaged in
the NCDP.
3.3 Procurement of coal through e-auction
The Company procured coal through e-auction to supplement the supplies under FSA. Audit
reviewed the e-auction process and noticed that the benchmark price used by NTPC for
bidding in e-auction was based on price of imported coal with GCV of 5700 kCal/kg. The
Company derived the price of the coal being auctioned (as per GCV of the offered coal)
based on this import price16. Audit noticed that there were significant differences between
the derived price and the actual import price for the grade of coal on offer in e-auction. In
such a situation, two scenarios could occur:
• where the import price for the grade of offered coal is lower than the derived price,
the bid amount would be on the higher side and the Company would win the bid by
quoting a higher amount for an inferior quality of coal.
16
For example, if the landed cost of imported coal of 5700 GCV was `5589 per MT, the landed cost of imported coal of
GCV 1000 kCal/kg was taken as `0.981 (5589 divided by 5700). `0.981 was multiplied by the GCV of domestic coal
being offered through e-auction and the prices were worked out backwards to achieve parity between domestic and
imported coal prices.
16
• where the import price is higher than the derived price, the Company may be losing
the bid.
NTPC stated (April 2016) that since the quantity procured is very low, this assumption may
not significantly affect the fuel procurement for NTPC. Ministry noted the audit observation
(November 2016).
17
Chapter 4
Import of Coal
The Company has been importing coal since 2005-06 to supplement domestic coal supplies.
Prior to 2011-12, The Company was importing coal through Public Sector Undertakings
(PSUs), viz., MMTC Limited and State Trading Corporation of India Limited. These PSUs
imported coal through suppliers and charged a service margin over and above their cost. The
New Coal Distribution Policy (NCDP) notified in October 2007 by Government of India,
Ministry of Coal (MoC) stipulated that CIL shall supply coal to meet the normative
requirement of consumers. NCDP provided that CIL could import coal and adjust its overall
price accordingly.
In April 2009, ACQ of stations was reviewed by CEA in consultation with CIL, NTPC and
power utilities. While the stations whose Commercial Operation Date (COD) was declared
prior to 31 March 2009 were given ACQ as per the extant level of supply; the new stations,
i.e., stations commissioned after 31 March 2009, got ACQ corresponding to normative
requirement, i.e.,85 percent Plant Load Factor (PLF). Hence for declaration of capacity17 of
stations above normative levels as well as for meeting disruptions in domestic coal supplies,
the Company resorted to import of coal. The Company did not exercise the option of import
of coal through CIL and imported coal on its own through tendering from November 2011
onwards.
The quantity of coal to be imported was fixed on a country-wide basis by Ministry of Power
(MoP) on the basis of domestic coal availability and generation level for the year as assessed
by CEA. A ‘target’ for import of coal was given to each generating utility. Details of import
of coal by NTPC during the last six years ending 2015-16 and price comparison with
domestic coal are tabulated in Table 4.1.
17
As per Indian Electricity Grid Code 2010, the generating stations shall make an advance declaration of their capacity
foreseen for the next day, based on which the beneficiaries schedule drawal of power from the stations.
19
Table-4.1: Year-wise quantity and price of imported vis-à-vis domestic coal

Year Target Quantity Actual Average Average Difference in
given for awarded coal landed cost of landed cost of price between
import import imported coal domestic coal imported and
per tonne at per tonne at domestic coal
(in million tonnes) stations stations (in `)
(in `)* (in `)*
(1) (2) (3) (4) (5) (6) (7)=(5-6)
2010-11 13.90 12.00 10.50 7788 2325 5463
2011-12 15.45 4.00 12.00 8992 2790 6202
2012-13 16.00 12.00 9.10 6745 3017 3728
2013-14 16.60 7.83 10.80 6880 3374 3506
2014-15 16.60 18.88 16.40 5999 4653 1346
2015-16 12.00 7.00 9.70 5951 4415 1536
* Column 5 denotes average landed cost of imported coal of 10 stations and column 6 is the average weighted average
cost of domestic coal procured through FSA, MOU and e-auction by 10 stations (out of 13 in the audit sample), data of
which was provided to Audit. Badarpur was excluded since it used imported coal during 2010-11 only. Dadri and
Vallur stations did not provide necessary data. These rates were further multiplied by 1.5 in order to arrive at
normalized price of domestic coal vis-à-vis imported coal considering that 1.5 kg of domestic coal is equivalent to one
kg of imported coal for consumption purpose.
Actual import of coal registered an increasing trend during the period from 2010-11 to 2011-
12 and again during 2013-14 to 2014-15 but reduced in 2012-13 and 2015-16, however,
prices showed a mixed trend. The quantity awarded exceeded the ‘target’ in 2014-15. Audit
reviewed various aspects relating to import of coal and the observations are indicated below.
4.1 Policy framework for import of coal

Audit noticed that no specific policy was laid down by the Company for importing coal.
While examining (November 2012) the draft Coal Import Policy 2012 recommended by the
Committee of Directors, the Board constituted another sub-committee (Committee for
Review of Coal Import Policy) to examine the evolution of Coal Import Policy since 2009
onwards, identify reasons for changes made in the policy from time to time, chart out future
course of action and finalize a coal import policy. However, no comprehensive policy for
coal import has yet been finalized over the past four years.
Ministry stated (November 2016) that policy for import of coal shall be put up to Board of
Directors by the end of the year.
In absence of a comprehensive policy, there were instances of different approaches to key
decisions such as splitting of quantity among bidders, qualification requirements, type/GCV
of coal to be procured etc., as pointed out below:
A. Splitting of packages
During the period from April 2011 to March 2016, the Company awarded 64 contracts (40
packages) for import of coal. 36 of the 40 packages18 {worth ` 22796.91 crore (approx.), for
18
Including two packages awarded as L2, due to spitting.
20
36.79 million tonnes of coal accounting for over 75 percent of the procurement by value}
were awarded to a single entity, Adani Enterprises Limited. In the initial 17 packages
awarded from February 2012 to February 2013, the entire package quantity was awarded to
the L1 bidder and no splitting of quantity among qualified bidders was done. Subsequently, to
enhance participation level, the Company decided to split the quantity among the qualified
bidders. In the first tranche of 2013-14, NTPC envisaged splitting up the package quantity in
the ratio 50:30:20 for award amongst L1, L2 and L3 bidder respectively, at L1 prices for the
package quantity 1 MMT and above. It was decided that for package quantity between 0.5
MMT and 1 MMT, the quantity would be split in the ratio of 60:40 amongst L1 and L2
bidders respectively. However, these ratios were followed only for one tranche of three
packages awarded on 31 October 2013, and in subsequent eight packages, the ratio was
changed to 70 (L1):30(L2), but reasons for the change were not recorded. Subsequently,
splitting of contracts was dispensed with after ‘Reverse Auction’ was introduced in August
2014. Hence there was an inconsistency regarding the splitting mechanism adopted by the
Company across packages.
Ministry stated (November 2016) that in case of split ratio of 60:40/ 50:30:20, five to eight
bidders purchased bidding documents and only two bidders submitted their bids in each of
the packages. It was later decided to change the splitting ratio to 70:30 to keep parties
motivated to quote aggressively to become L1 bidder. With change of splitting ratio to 70:30,
15 to 24 bidders purchased the bidding documents and three to six bidders submitted their
bids in each of the packages. Ministry added that after changing the split-up ratio to 70:30,
better award prices were achieved and the same were also closer to the cost estimates. All
packages were awarded at L-1 prices only. Ministry also stated that Reverse Auction was
introduced to bring about highest level of transparency and further ensures that no bidder gets
any advantage vis-à-vis others on any ground other than the lower prices. Ministry further
stated that in order to have wider participation, NTPC has been floating tenders for each
package of procurement of imported coal on International Competitive Bidding (ICB) basis.
The reply has to be viewed against the fact that the change in the splitting ratio increased the
quantity to be awarded to L1 bidder from earlier 50 / 60 percent to 70 percent. The increased
level of participation cannot be attributed to modification of splitting ratio alone as there
would be other factors including market conditions which would affect participation. Besides,
Audit noticed that key qualification requirements19 were also changed in tandem with the
change in splitting ratio, which may have affected the degree of participation. As such, it may
not be possible to come to a conclusion based only on one tender that the poor response was
due to the splitting ratio alone. It was also seen that prices were higher than cost estimates in
22 out of 36 packages examined by Audit.
19
(i) When splitting ratio was 50:30:20/60:40, minimum qualification requirement for a bidder to participate in the tender
was that he must had an experience of supplying 50 or 60 per cent of package quantity. However, when splitting ratio
was changed to 70:30, this was modified to 44 per cent of package quantity. (ii) Modified QR provided that a bidder
meeting the requirement of supply and handling attributes could also participate in bids after tying up with mine owner(s)
through a ‘Letter of Authority’ from them.
21
B. Re-tendering/annulment of packages
A review of the import orders revealed that in 22 out of 36 packages examined by Audit, the
L1 rates obtained through the tender process were higher than the estimates20. Audit noticed
that the Company did not have a consistent approach in dealing with such cases.
• In 11 of these packages, the Company carried out re-tendering citing higher quotes
received from bidders.
• In six cases (including 3 re-tendered packages), the Company carried out post-bid
negotiations based on which the contracts were awarded.
• In the balance eight cases, the Company awarded the contracts without any
negotiations or resorting to re-tendering.
Ministry stated (November 2016) that re-tendering/ annulment was carried out keeping in
view NTPC’s commercial interest and applying due prudence by taking note of coal stock
position, demand for coal and coal prices arrived during tendering etc. Ministry added that all
these decisions have been approved by Board/Sub-committee, as the case may be. Ministry
further stated that higher expenditure would not reflect on the bottom line of NTPC since as
per the business model, fuel cost was pass through.
The reply indicates that there was a certain degree of subjectivity involved in these decisions.
4.2 Source verification of quantity and quality of coal

The Company changed the Qualification Requirement (QR) for bidders in July 2013 in an
attempt to bring about participation by mine owners abroad and obtain assurance about the
quantity and quality of imported coal. The new QR stipulated that the bidder should be a
mine owner or consortium with a mine owner as one of the parties. During pre-bid
conference held on 23 July 2013, prospective bidders expressed that overseas mine owners
were reluctant to sign such consortium agreements where they would be liable for supplying
and handling part also. In order to address this, QR was modified and it was provided that a
bidder having supply and handling experience could also participate in bids after tying up
with mine owner(s) through a ‘Letter of Authority’ from them. Since the bid prices obtained
with this condition was higher than cost estimates, the requirement regarding ‘Letter of
Authority’ was relaxed in subsequent tenders. It was decided that the bidder would only
submit a list of mines from which supply would take place.
Audit observed that, the bidders, in line with the relaxed conditions, submitted a list of mines
(from 33 to 740 mines)21 from where they could source the coal. Hence the objective of
obtaining assurance about the source, quantity and quality of coal from the coal producer
never actually materialized as none of the bidders submitted the exact names of the mines
along with quantity and quality (Gross Calorific Value-GCV) of coal to be imported from
these mines.
20
Award values were more than cost estimates by 0 to 5 percent in 10 cases; 5 to 10 percent in 8 cases; 10 to 20 percent in
1 case; 20 to 30 percent in 1 case and 30 percent & above in 2 cases.
21
The list of mines submitted by bidders mentioned 340 mines-AEL consortium; 535 mines- Knowledge Infrastructure
System Private Limited (KISPL); 33 mines – MBG Commodities Private Limited (MBG) and 740 mines – Trimex
International FZE (TIF) Consortium (in respect of 1.3 MMT package for Simhadri and Ramagundam)
22
Ministry stated (November 2016) that there are a number of small coal mines in Indonesia
and hence bidders used to declare a substantial number of mines in the above mentioned
format. Ministry added that once the source of coal mine(s) is declared by the successful
bidder, he is bound to supply the coal from only the declared mine(s), meeting the technical
specification of coal. It was also stated that the objective of obtaining assurance about the
quantity and quality of coal was fulfilled with source declaration.
The reason for non-participation of mine owners abroad was supply and handling of coal up
to station end. Instead of addressing this concern, the Company relaxed the requirement of
declaration for specific mine (s). Though declaration of specific mine(s) would have caused
some inconvenience to the bidders, the same would have provided assurance to the Company
about quantity and quality of coal being procured by the bidder.
4.3 Indices adopted for price settlement of imported coal

NTPC imported coal from Indonesia under 15 packages involving 14.6 MMT during
February 2012 to February 2013. As per bid conditions, FOB coal price quoted was subject to
variations for payment purposes, considering lower of the specified indices22 on base date and
weekly basis, based on indexation.
Coal pricing was based on Gross Calorific Value (GCV) and GCV measured on ‘Air Dried
Basis’ (ADB) was used for payment of imported coal. The Indonesian coal index, which was
one of indices considered for payment settlement, reported GCV on ‘Gross as Received’
(GAR) basis. Audit noticed that the GCVs worked out on ADB and GAR basis were
considerably different, the GCV being higher on ADB basis compared to GAR. The GCV of
coal required for the imported coal packages was 6300 kCal/kg worked out on ADB basis.
This would translate to GCV in the range of 5800 on GAR basis. NTPC indicated in the
contract document that one of the parameters for price basis was GCV of 6300 kCal/kg (on
ADB basis) and that FOB prices would be subject to variation considering specified indices,
including Indonesian Coal Index of 6500 GAR. Audit observed that since the appropriate
Indonesian Coal Index was not specified, (6500 GAR was specified instead of 5800 GAR),
extra expenditure was entailed at the time of payment for coal deliveries.23 Difference in
price per tonne of Indonesian coal, as per 6500 GAR and 5800 GAR ranged from 11.97 USD
to 18.75 USD (rates which prevailed on award dates). Since the imported coal supplies were
from Indonesia, adoption of appropriate index was important.
Ministry stated (November 2016) that the bidders would include the impact of all the
probable risks and other commercial conditions in their bid prices, irrespective of the
22
(i) CERC methodology (which comprised of indices for the Richard Bay API4 for 6000 kCal/ Kg NCV, Newcastle
Export Index (NEX) for 6700 kCal/ Kg GAD and Global Coal New Castle (GCNEW C) for 6000 kCal/ Kg NCV with
weightage 50:25:25); (ii) Methodology using the Indices for the Country of Origin of Coal (in this case one of the
indices considered was Indonesian Coal Index (ICI) 6500 GAR).
23
For example, in the bid opened on 3.2.2012, the bidder quoted 97.35 $ per tonne for coal of GCV 6300 (GCV to be
assessed on ADB basis). The market price of coal as per Indonesian Coal Index 6500 (GAR basis) at that time was 113
$. The quoted price, which was accepted, was lower than the market price as per this index. However, the market price
as per Indonesian Coal Index 5800 (GAR basis), which was the appropriate index at that time was 94.25 $ but the quoted
price was higher than this value. The same analogy was applicable during price settlement at the time of actual delivery
also.
23
particular index number used. Ministry added that indices were used only for the payment of
price escalation.
The reply is to be viewed against the fact that adoption of appropriate index was crucial for
payment purpose, including escalation with reference to base date, since coal pricing varied
according to moisture and basis of reporting (ADB or GAR).
24
Chapter 5
Assessment of Quality and Quantity of Coal
In coal fired power stations, coal of appropriate quality is essential for proper combustion and
operational efficiency of the boiler. Pricing of coal also depends on its quality or ‘Grade’.
Accurate assessment of quality and quantity of coal is crucial to appreciating the adequacy
and efficiency of inputs of the power station. Audit examined assessment of coal quality as
well as weighment of coal and the findings are detailed below.
5.1 Sample collection and methods of measurement for coal quality

The most important quality parameter for coal is its heat value referred to as ‘Gross Calorific
Value’ or GCV. Pricing of coal by coal companies and pricing of energy by generating
companies depends significantly on the GCV of coal. GCV depends on the location from
which samples are collected and the method used for its measurement.
A. Quality of coal
Different methods of measuring GCV were used for different purposes. Three methods 24
were seen to be used:
• For imported coal, GCV was reported on ‘Air Dried basis’ (ADB) while paying for
coal imports.
• For payment to domestic coal companies for supplies, GCV was reported on
‘Equilibrated basis’ (EB)
• For energy billing, the stations reported GCV on ‘Total Moisture basis’(TMB)
The different methods used for assessing GCV lead to the following:
(i) For a given sample, ADB method gives the highest GCV value followed by EB
method. The TMB method gives the lowest GCV value among the three methods.
(ii) GCV on ADB basis gave undue advantage to the supplier since moisture present in
coal, i.e., the sample, gets dried in the process for determination of GCV for payment to the
coal suppliers. As a result, payment was made without taking into account loss of heat value
due to moisture, but the coal actually fired in the boilers had the moisture content.
(iii) Energy tariff (as per formula mandated by CERC) is inversely proportional to GCV.
A lower GCV would thus lead to higher tariff. TMB method, which gives the lowest GCV, is
used by stations for billing which would lead to higher burden on consumers. At the same
time, coal companies are reimbursed on ADB (for imports) and EB (for domestic supplies)
which gives a higher GCV and hence higher payment.
24
(i) Total Moisture Basis – GCV is reported taking into consideration the total moisture, i.e., moisture inherently present in
coal and surface moisture present in the sample. (ii) Equilibrated Basis – The sample is brought to standardized moisture
and humidity levels and GCV of the resultant sample is reported. (iii) Air Dried Basis - The given coal sample is air dried,
as per procedure given by the Bureau of Indian Standards and the GCV is measured thereafter.
25
B. Quantity of coal
The method of estimation of quantity of coal did not provide adequate assurance regarding its
accuracy:
(i) The collection of samples was done by private agencies at the stations and control
mechanisms such as witnessing of the sample collection by Company’s employees and
maintenance of log book for collection was not found on record. The significance of
representative sampling can be gauged from the fact that a 1000 MW station requires around
25000 tonnes of coal per day and GCV of this quantity of coal is assessed once daily, by
placing one gm of the processed coal sample in the Bomb Calorimeter (device used to
measure GCV).
(ii) GCV test results given by the Bomb Calorimeter were manually entered into a
register maintained for the purpose, and thereafter entered into the computerized system.
There was an option to print the GCV test results carried out by the Bomb Calorimeter but
such printed results were not maintained by the stations.
Ministry stated (November 2016) that total moisture based GCV is the standard industry
practice. Ministry further stated that payment for domestic coal was as per the provisions of
FSA and for imported coal it was on the basis of competitive bidding and hence did not result
in any undue advantage inter-se to any-one supplier over the others. Ministry added that in
case of imported coal, GCV is measured on ADB basis, however, adjustment is made for
excess moisture. Regarding collection of samples, Ministry stated that this was highly labour
intensive and hence outsourced but appropriate supervision was undertaken by NTPC
personnel.
The reply is to be viewed against the following:
(i) Total moisture method, though adopted by power utilities, was not expressly
provided for in CERC regulations. GCV reported under total moisture method was
lower by around 280 to 350 kCal/kg25 when compared to EB. CEA has stated that
reduction in GCV by 100 kCal/kg would increase consumption by three percent.
Hence there may be a need for standardising the method of reporting GCV.
(ii) Regarding adjustment for excess moisture in imported coal, it was seen that the
specified moisture level, as per contract was 25 percent and tolerance limit for
rejection was 32 percent. Supplies in the range of 25 to 32 percent moisture were
accepted with reduction in quantity for excess moisture. Hence adjustment carried
out for ’excess’ moisture vis-a-vis tender specification, did not address the loss of
heat value due to determination of GCV on ADB, for payment of imports.
(iii) Though Ministry has stated that appropriate supervision of collection of samples
by outsourced agency was undertaken by NTPC personnel, Audit noticed that
payment to the agency was made based on quantity of coal brought to the lab.
Maintenance of records to ensure integrity of sample collected such as logbook for
25
As per Fuel Audit Report of Central Power Research Institute uploaded on the web site of Punjab State Electricity
Regulatory Commission.
26
recording collection particulars, witnessing of collection by NTPC personnel etc.

were not in practice.
5.2 Reduction in heat value (GCV) of coal

Since GCV was one of the key factors used for energy billing, Audit compared the GCV ‘as
billed’ by coal companies for coal loaded on to wagons, GCV of coal ‘as received’ at the
unloading point of the power station and GCV of coal ‘as fired’ in the boilers for a year (from
October/November 2012 to September 2013) 26 in the stations covered in audit. It was
observed that GCV of coal progressively decreased from the ‘as billed’ stage to the ‘as fired’
stage, though as per CEA, the three GCV values, i.e., GCV ‘as billed’, ‘as received’ and ‘as
fired’ should be approximately same barring minor losses due to storage. The differences in
GCV are summarized below:
Table-5.1: Station-wise GCV differences during October 2012 to September 2013
Sl. No. Name of station Range of GCV differences between different stages
(kCal/kg)
‘As billed’ and ‘As received’ ‘As billed’ and
‘As received’ and ‘As fired’ ‘As fired’
Low High Low High Low High
1 Dadri Stage– I 286 788 (-)74 618 543 1097
Dadri Stage– II 286 788 (-)72 703 453 1155
2 Badarpur 1134 1943 573 976 2012 2682
3 Korba Stage-I&II 108 826 144 672 595 1143
Korba Stage– III 108 826 141 673 592 1136
4 Vindhyachal 13 28 10 17 27 38
5 Talcher Thermal 5 51 326 383 354 395
6 Rihand 674 1178 197 616 971 1715
7 Vallur (-)180 1405 0 980 (-)95 1405
8 Sipat N.A. N.A. 78 632 N.A. N.A.
9 Farakka N.A. N.A. 199 358 N.A. N.A.
Note: GCV difference between ‘As billed’and ‘As received’ as well as ‘As billed’ and ‘As fired’ was not
calculated for Sipat and Farakka as the stations did not provide GCV ‘As billed’ data. Three
stations, viz. Jhajjar, Ramagundam and Mouda, did not provide the necessary data for making the
comparison. Barh-II was commissioned in November 2014, i.e., subsequent to the period of above
comparison.
As can be seen from the above table, except in Vindhyachal, the difference in GCV between
‘as billed’, ‘as received’ and ‘as fired’ was significant irrespective of whether the station was
pithead or non-pit head (it is expected that the difference in case of pithead stations would be
much lesser than non-pit head stations owing to the shorter transportation of coal). The above
26
During these months GCV figures were available for the three locations, i.e., at the loading point (‘as billed’), at the
unloading point at the station (‘as received’) and at the boiler (‘as fired’). GCV ‘as received’ was not measured by the
stations in other months. Beyond July 2014, the location for collection of sample for measurement of GCV was changed
to ‘secondary crusher’ from the ‘bunker/firing’ stage, hitherto adopted, for billing of energy charges.
27
GCV reduction increased energy charges billed to the beneficiaries, as explained in

subsequent para 5.2.1.
Ministry stated (November 2016) that sampling (for GCV ‘As received’) was done as a quick
check/on trial basis for limited purpose of optimization of combustion in Boiler and the
values were used to take up the issue with coal suppliers for taking necessary actions.
Ministry further stated that though coal bill payments were regulated based on the GCV
analyzed at power station end, the final settlement took place by extrapolating the GCV
analyzed by the third party at mine end only, in terms of the communication from Ministry of
Finance, Govt. of India. Ministry added that the coal collected from wagons were not
representative in nature and did not reflect true GCV.
The reply is to be viewed against the fact that payment to coal companies was regulated by
stations based on GCV ‘as received’ at stations during the above mentioned period. The
contention that samples of coal collected from wagons at the receiving end were not
representative is not tenable as samples were collected from wagons itself at the mine end to
arrive at the ‘as billed’ GCV of coal. Besides, while the GCV differences between ‘as billed’
and ‘as received’ stage involved other parties, viz., coal companies and Railways, difference
in GCV between ‘as received’ and ‘as fired’ values was attributable entirely to the power
stations. However, the same was passed on to consumers while billing for energy.
5.2.1. Impact of GCV differences on efficiency and energy charges

Operational efficiency of power stations is regulated through a parameter called ‘Station Heat
Rate’ (SHR)27, which denotes the input heat value incurred by the station to produce one unit
of energy. SHR depends on the quantity as well as quality/grade of coal used by the station.
CEA, in its ‘Recommendations on operation norms for thermal power stations, tariff period
2014-19’ pointed out that the difference between ‘as received’ GCV vis-à-vis ‘as fired’ GCV
would be very marginal and would be solely on account of marginal loss of heat during the
coal storage. CEA added that ‘international publications indicated a loss of heat value of
about one percent for one year storage for high rank coals and three percent coal storage for
low rank coals’ and went on to comment that even after considering a three percent heat loss
for Indian coals,‘ the average loss of heat value for ten days storage would be about 0.08
percent’ and added that storage losses of coal were almost negligible especially for low
storage periods as in Indian stations.
The power stations reported SHR using GCV ‘as fired’. The SHR values, so determined,
were well within the laid down CERC norms and hence the stations were considered to be
efficient. Audit compared the reported SHR (using GCV ‘as fired’) with the SHR worked out
using GCV ‘as received’28 for the period October 2012 to September 201329 and found that
SHR worked out on the basis of GCV ‘as received’ was significantly higher at stations
indicating lower efficiency (Annexure 5.1).
27
Station Heat Rate = Quantity of coal x Gross Calorific Value
No. of units of energy generated
28
GCV ‘as received’ was reduced by storage loss as envisaged by CEA, i.e. 0.08 percent for 10 days. For pit head stations
storage loss was calculated for 15 days and for non pit-head stations storage loss was calculated for 30 days, as per CERC
norms for coal stock.
29
The only period when the stations measured GCV ‘as received’.
28
Audit also worked out the difference in energy charges considering the ‘as received’ and ‘as
fired’ stage for the same period (October 2012 to September 2013). It was seen that during
this period, Energy Charge Rate (ECR) worked out on ‘as fired’ basis was higher than ‘as
received’ basis by `0.03 to `0.96 per unit of electricity for the different stations, as per details
given below:
Table-5.2: Summary of higher energy charges due to GCV difference
Sl. No. Station Name* Range of difference Total impact
in ECR `in crore)
(`
1 Dadri Stage– I (-)0.06 -0.43 135.64
Dadri Stage – II (-)0.07 -0.46 165.06
2 Badarpur 0.58 -0.96 324.73
3 Korba Stage -I&II 0.05 -0.18 161.01
Korba Stage – III 0.03 -0.16 32.65
4 Vallur 0.06-0.45 58.25
5 Sipat 0.04 -0.23 144.36
6 Rihand Stage I 0.09 - 0.17 87.26
Rihand Stage II 0.11 -0.21 121.90
Rihand Stage III 0.05 -0.25 30.89
7 Talcher 0.09-0.11 31.97
8 Farakka I & II 0.17-0.38 110.23
Farakka III 0.17 -0.38 36.38
9 Vindhyachal Not calculated as GCV differences were minor
Total 1440.33
Overall, for the eight stations studied in Audit, energy charges billed on ‘as fired’ basis was
higher by `1440.33 crore for a one year period (October/November 2012 to September
2013).
Ministry stated (November 2016) that during the period (October/November 2012 to
September 2013) CERC Tariff Regulation did not envisage GCV ‘as received’ for ECR
computation. Ministry added that the formula for calculation of energy charges as per CERC
Regulations provided for using GCV on ‘as fired basis’ and billing was made accordingly.
Ministry further stated that Dadri and Badarpur stations also used washed coal in significant
quantities but GCV ‘as received’ was not measured for the same and added that GCV was not
determined for ‘diverted in’ and e-auction coal also. Ministry also stated that ‘as received’
GCV measured to take up with the coal companies was on Equilibrated basis (EB) while
GCV ‘as fired’ was on Total Moisture (TM) basis and the two values would be different
depending on the total moisture.
The reply is to be viewed against the following:
(i) Though CERC Tariff Regulations provide for energy billing on GCV ‘as fired’
values, measurement of GCV on TM basis was not expressly mentioned in the Regulations. It
is pertinent to note that TM method gives lower GCV values and correspondingly increases
energy charges.
29
(ii) CEA, in its ‘Recommendations on operation norms for thermal power stations, tariff
period 2014-19’ stated that “any arbitrary practice of using as fired GCV for SHR
computations without proper guidelines for determining the same would only lead to inflated
claims of coal consumption”. This is reflected in the SHR worked out considering GCV ‘as
received’ by Audit.
(iii) The Company has not clarified whether GCV was less for the types of coal
mentioned- washed coal, coal procured through e-auction and ‘diverted in’ coal. Besides,
their effect on the overall GCV would be minimal considering that their quantities were
marginal.
5.3 Weighment of domestic coal

As per FSA between power stations and coal companies, payment for the coal supplies was
made as per the weighment carried out at the delivery/loading point at mine end. The FSAs
also provided for weighment at unloading point (power station) in order to ensure
recalibration of weigh bridges at loading point. It was, however, noticed that stations covered
in audit (pithead as well as non-pithead stations) did not regularly weigh domestic coal (i.e.,
coal procured through FSA, MOU and e-auction) when the wagons arrived at the station,
though in-motion weigh bridges were installed in these stations. Due to non-weighment of
coal on arrival, the stations lost the opportunity to cross verify the quantity of coal and ensure
that there were no errors in weighment at the loading point.
As a test case, at Vindhyachal station, the in-motion weighbridge remained out of order
during 840 days (46 percent of time) during five years ended 31 March 2015. After the first
calibration in October 2009, the next calibration was carried out five years later, only in
February 2014. At Barh station, weighment started only from December 2015, while at
Farakka station, weighment started in November 2015. Non-weighment of coal resulted in
deficiencies in ascertaining transit loss.
Ministry stated (November 2016) that in terms of the FSA, payment for coal billing is
required to be released based on weight measured at loading end and there was no
requirement of weighing at station end. Ministry added that coal weighment was done
occasionally at station end for the purpose of cross checking. Ministry further stated that
weighing system at Vindhyachal is working satisfactorily now.
The reply is to be viewed against the fact that though the payment for coal was to be made as
per the weighment at loading point, the Company had the resources to weigh the rakes at the
station and cross check the weighment at loading point. But the in-motion weighbridges at
stations either were frequently under outage or stations were not following the practice of
weighing coal on receipt.
5.4 Weighment of imported coal

The agreements for import of coal provided for payment based on quantity received at the
station. Audit observed certain inadequacies at stations in this regard:
(i) Vindhyachal station was not weighing imported coal received at the power station till
February 2014 and was making payment on the basis of quantities mentioned in
30
Railway Receipt (RR). Further, out of total 353 rakes of imported coal received
during 2014-15, only 208 rakes were weighed.
(ii) One Wagon Tippler associated with Vindhyachal-III commissioned on 31 December
2014 was without ‘in-operation’ weighing arrangement. As such, quantity of coal
unloaded using this wagon tippler was being accepted based on quantity indicated in
RR. Second set of in-motion weigh bridge was commissioned only in July 2015.
Management stated (April 2016) that a lot of efforts were taken up at Vindhyachal station to
stabilize the weigh bridge operation at the station end which included various modifications
in the weigh bridge in consultation with the supplier and commissioning of the second
weigh-bridge in July 2015.
The corrective steps taken by the Company are noted. The fact remains, however, that even
imported coal, which was required to be weighed at station for payment purpose, was not
weighed in Vindhyachal nearly half the time (imported coal was not weighed for 840 days
during five years ended 31 March 2015).
5.5 Assessment of transit loss through indirect method

Transit loss is the difference between quantity of coal dispatched from the mines and quantity
of coal received by stations. CERC Tariff Regulations provided normative transit and
handling loss of 0.8 and 0.2 percent for non-pithead stations and pithead stations
respectively. Transit losses up to this extent could be recovered through tariff and any loss
beyond this limit was to be borne by the station. The stations adopted an indirect method
called ‘volumetric method’ for ascertaining transit loss instead of weighing the railway rakes
when they arrive at the station to find the loss. As per this method, assessment of actual
transit loss was carried out by way of physical verification of closing stock of coal stored in
the yard and bunker at the end of every quarter. The quantity of coal physically verified on
quarterly basis was compared with the quantity that should have been present in the yard as
per billing records. The difference between physically verified stock and closing stock as per
billing records was worked out and considered as the transit and handling loss. For
determining quantity of coal present in the yard, mathematical formula for converting
volume into weight is used, based on dimensions of coal stacked in heaps in the coal yard
(hence referred to as volumetric method). Audit reviewed the transit and handling loss for
domestic and imported coal at the stations in the audit sample and found that the losses were
very close to the normative transit loss of 0.8/0.2 percent fixed by CERC. The issues noticed
regarding transit loss are highlighted below:
(i) Volumetric method of ascertaining transit loss is an indirect method since coal was not
actually weighed at station at the time of receipt. Instead, mathematical formula was
used to convert volume to weight using density of coal. Density, however, could be
subjective since coal is not a homogeneous mixture like oil and, hence, density is likely
to vary depending on the point in the coal heap from where the sample are taken for
measurement of density.
31
(ii) Inaccuracy of the transit loss ascertained using this method was further evidenced by
the fact that coal physically verified at the coal yard at the following stations was even
more than the storage capacity of the yard.
Table-5.3: Coal stock in excess of coal yard capacity
Sl. Name of Physical quantity of coal more than the Excess coal
No. station@ storage capacity of the yard * stored above
storage capacity
Quarters (in No.) Quarters
(in percentage)
1 Badarpur 6 Q II (2013-14) 17
Q IV (2013-14) 6
Q IV (2014-15) 30
Q I (2015-16) 114
Q II (2015-16) 94
Q III (2015-16) 48
2 Sipat 1 Q I (2015-16) 37
3 Mouda 5 Q III (2014-15) 18
Q IV (2014-15) 22
Q I (2015-16) 41
Q III (2015-16) 37
Q IV (2015-16) 23
4 Rihand 5 Q IV (2010-11) 9
Q I (2015-16) 36
Q II (2015-16) 31
Q III (2015-16) 28
Q IV (2015-16) 17
5 Ramagundum 3 Q IV (2012-13) 1.7
Q IV (2014-15) 23
Q I (2015-16) 5
6 Vindyachal 2 Q IV (2014-15) 16
Q I (2015-16) 30
7 Farakka 2 Q IV (2013-14) 13
Q IV (2015-16) 38
8 Korba 5 Q I (2010-11) 13
Q I (2011-12) 1
Q II (2011-12) 2
Q IV (2014-15) 11
* Calculated based on the data regarding storage capacity provided by Corporate Office.
@ Jhajjar did not provide data and Vallur did not provide quarter-wise data. Instances as mentioned above
were not seen in the case of Dadri, Talcher and Barh.
In all the above mentioned stations, coal quantity physically verified at the yard was
more than the storage capacity in the yard. Notably, at Badarpur station, during two
quarters in 2015-16, physical quantity of coal as per the verification reports was 94 to
32
114 percent more than the storage capacity of the yard. This raised doubts on the
correctness of coal stock and transit loss reported by the stations.
(iii) Despite investing in facilities like ‘in-motion weighbridge’, the stations have not been
using the same for weighing coal receipts and ascertaining actual transit loss. Local
Management Instructions were silent regarding ascertaining transit loss.
(iv) Since the actual transit loss was not properly ascertained, the station did not take up the
issue/lodge claim with Railways regarding en-route theft/pilferage, if any, of coal
from wagons.
Ministry stated (November 2016) that weighment of coal by volumetric method was being
done as per the practices prevalent in the power industry in the country.
The reply is to be viewed against the deficiencies of volumetric method as pointed out above.
Since the Company had the resources to ascertain the actual transit loss at the time of receipt
of coal itself, the same should have been used.
33
Chapter 6
Coal Supply Management
One of the important functions in operating a power station is to ensure uninterrupted supply
of coal so that generation loss due to coal shortage does not arise. Coal was required for
‘declaration of capacity’ (DC) of stations, even though the beneficiaries may not schedule
power from the station. The Company operated nine pithead power stations where coal was
moved from mine to the power station through the Company’s own rail network and wagons
called Merry Go Round (MGR) system. In the nine non-pit head stations, coal was
transported in wagons from the linked mines to the power station through the Indian Railway
network. Imported coal was transported by shipping vessels and upon reaching the ports, coal
was shifted to railway rakes for onward transportation to designated stations. Audit reviewed
various aspects relating to coal supply management and observed as under:
6.1 Coal stock at stations

Daily coal stock at stations was monitored at Corporate Office level through an online system
where stations provided data relating to their daily consumption and stock. Audit noticed that
coal stock position was at critical (less than 7 days’ requirement considering 90-92 percent
PLF) and super-critical (less than 4 days’ requirement) levels at various stations during the
period 2012-13 to 2015-16, as per details given in table below:
Table-6.1: Details of coal stock below critical and super critical level
(Number of days)
Station Name 2012-13 2013-14 2014-15 2015-16
Critical Super Critical Super Critical Super Critical Super
critical critical critical critical
Singrauli 80 83 37 103 - 156 - -
Rihand 29 79 75 103 24 229 - -
Unchahar 119 131 17 161 16 153 - -
Tanda - - 79 - 15 117 - -
Badarpur 123 119 60 38 19 91 - -
Dadri 19 309 68 209 43 107 - -
Korba 61 232 11 3 44 146 47 26
Vindhyachal 62 128 26 148 21 195 - -
Sipat 5 229 10 100 17 227 - -
Farakka - 365 68 122 34 84 94 15
Kahalgaon 34 331 13 91 17 53 30 76
Talcher Kaniha 24 341 40 322 71 59 - -
Talcher Thermal 31 8 - - - - - -
Barh - - - - 90 - 51 -
Ramagundam 166 110 39 231 - 57 - -
Simhadri 26 278 5 330 56 92 20 -
Mouda - - - - 48 81 - -
35
Audit also noticed that domestic coal stock dropped to zero level at various stations during
2012-13 to 2014-15 as per details given in Annexure 6.1. It can be seen from the above table
that during 2012-13, the stock level was at super critical position in seven stations for more
than six months. Similar situation prevailed in four stations during 2013-14. There was some
improvement in 2014-15 but three stations reported super critical stock levels for more than
six months. During 2015-16, the situation improved significantly at all stations except
Korba, Farakka and Kahalgaon where coal stock level was super critical for 26 days, 15 days
and 76 days respectively.
Ministry stated (November 2016) that coal stock at various stations was closely monitored
and the matter was continuously pursued with coal companies, MoP, MoC and Railways at
various forums. Ministry added that the actual coal supply was the responsibility of coal
companies and the short supply might be due to various reasons including less production
from mines or railway constraints etc. Ministry further stated that during negotiations over
FSA terms, coal was supplied to NTPC stations under short term MoUs.
The reply needs to be seen against the fact that during 2012-13 and 2013-14, supply of coal to
stations was disrupted due to delay in signing of FSA and payment dispute with coal
companies. Import of coal also did not significantly mitigate fuel shortgage since imported
coal could only be blended up to 30 percent. Hence the Company resorted to costly options
for procuring domestic coal such as MOU at premium rates, involving higher costs.
6.2 Generation loss due to coal shortage

There were instances of units being taken out of operation or being operated at partial load in
view of coal shortage during the period from 2010-11 to 2015-16. Audit noticed that during
this period, 11 out of 13 stations covered in audit reported a generation loss of 19546.26
million units of electricity with potential revenue loss of `4299.80 crore as indicated in the
table below:
Table-6.2:Station-wise generation loss due to coal shortage
Sl. No Name of station Total generation loss (million units) Revenue loss
(` in crore)
1 Dadri 789.05 275.09
2 Badarpur 321.77 135.46
3 Vallur 2829.04 563.36
4 Mouda 422.27 157.73
5 Rihand 2766.41 432.45
6 Jhajjar 1303.41 530.81
7 Sipat 592.52 95.42
8 Vindyachal 4643.94 762.21
9 Farakka 3308.87 886.30
10 Ramagundum 2105.23 412.05
11 Korba 463.75 48.92
Total 19546.26 4299.80
36
Audit observed that while the stations suffered generation loss due to coal shortage on the
one hand, they paid performance incentive to coal companies for excess supply of coal
beyond ACQ on the other. Audit also noticed that the FSA allowed transfer of coal meant for
one station to another station, if both stations were wholly owned by the Company.
However, this provision of transfer was used sparingly.
Ministry stated (November 2016) that in spite of best efforts, coal shortages were there in the
country on some of the occasions due to unavoidable problems in mining, natural calamities,
seasonal issues etc. Regarding inter-station transfer of coal to address shortages of coal,
Ministry stated NTPC has used the provision on many occasions during the period under
audit, as per FSA terms.
Though Ministry has stated that provision for inter-station transfer of coal was used to address
shortages, the fact remains that the efforts taken by the Company to tide over coal shortages
proved inadequate as 11 stations suffered generation loss of 19546.26 million units due to
shortage of coal.
6.3 Declaration of capacity of station despite non-availability of coal

Even on days when the coal stock was zero, it was possible for the station to generate power
with the help of coal received through railway rakes/MGR system during the day. But any
unduly positive presumption regarding coal receipt could lead to a generation default and
penalty in the form of Unscheduled Interchange (UI) charges. Four power stations (Dadri
Stage I & II, Badarpur, Jhajjar and Mouda) incurred UI charges during the period from 2010-
11 to 2015-16 amounting to `101.41 crore due to such generation default. Audit observed
that ‘Local Management Instructions’ issued by the stations did not provide specific guidance
for capacity declaration of stations so that payment of UI charges could be avoided.
Ministry stated (November 2016) that declaration of capacity is done on daily basis based on
different parameters including the availability of coal and added that provisions of the Grid
Code were followed and there was no violation of the same.
Since capacity declaration is a key decision taken by stations on a daily basis, NTPC may
consider laying down guidelines for the same, especially in view of financial implication of
any failure to make available the capacity.
6.4 Storage capacity of coal yards at power stations

As per CERC Tariff Regulations, interest on capital equivalent to fuel charges for 15 days’
consumption of coal was allowed as part of fixed charges for pit head stations and 30 days’
consumption for non-pithead stations, on normative basis. Details of coal storage capacity of
17 stations was examined by Audit and observed that in six stations, viz., Rihand, Badarpur,
Dadri, Korba, Farakkaand Kahalgaon, the storage capacity was less than the above norm of
15/30 days’ requirement. Shortage in capacity as a percentage of requirement ranged from
2.60 percent (Rihand) to 53.62 percent (Farakka). Further, import of coal by stations
warranted earmarking a specific area for storage of imported coal, which in turn, limited the
space available for storage of domestic coal.
37
Ministry stated (November 2016) that imported coal was stored separately in the yard and
that any portion of the yard could be earmarked for storing imported coal based on
requirement.
The reply is to be viewed against the overall shortage in the storage capacity of coal.
6.5 Storage of domestic coal along with imported coal

As per ‘Local Management Instructions’ issued by the stations, imported coal was to be
stacked separately in identified yard at earmarked stockpiles.
Physical verification of both domestic coal and imported coal kept in coal yards was carried
out by the stations at the end of every quarter. Physical verification reports (April 2010 to
March 2016) of coal stock were reviewed in Audit and it was observed that domestic and
imported coal were stored in the same yard as per details given below:
Table-6.3: Details regarding storage of imported coal in domestic coal yard
Sl. No. Station Quarters when imported coal Imported coal
quantity exceeded the storage in excess of
capacity of imported coal yard imported coal
No. of quarters Quarters yard capacity
(in %)30
1 Vindyachal 4 Q IV (2014-15) 50
Q I (2015-16) 127
Q II (2015-16) 73
Q III (2015-16) 28
2 Mouda 6 Q III (2014-15) 158
Q IV (2014-15) 121
Q I (2015-16) 127
Q II (2015-16) 53
Q III (2015-16) 61
Q IV (2015-16) 50
3 Sipat 2 Q 4 (2014-15) 62
Q I (2015-16) 12
4 Dadri 1 Q II (2013-14) 147
5 Farakka 3 Q I (2011-12) 78
Q II (2011-12) 6
Q IV (2013-14) 57
The above instances indicated that domestic and imported coal were stored in the same yard.
Audit noticed that at Dadri station, domestic coal constituted 7.50 percent to 61.31 percent of
coal kept in the imported coal yard and during the period from April 2014 to September
2014, more than half the coal present in imported coal yard was domestic coal. The
deficiencies in proper storage affected the blending ratio, which was an important component
30

X 100

38
in determining the Energy Charge Rate recovered from consumers.

Ministry stated (November 2016) that imported coal was stored separately in the yard and
that any portion of the yard could be earmarked from time to time for storing imported coal
based on requirement. Ministry added that it is also possible to stack more than the yard
capacity in short run by increasing the height of the stock-piles.
Since domestic coal and imported coal were stored in the same yard, the chances of both
types of coal getting mixed in the yard itself even before they were actually blended, was
high. In view of the deficiency as pointed out above, the blending ratio declared by the station
may not be the actual ones due to mixing of the two types of coal at the yard itself.
6.6 Railway logistics
Nine stations of the Company were rail-fed stations and hence proper railway logistics had an
important role in the day to day operation. Pithead stations also utilized railway network for
bringing imported, MOU and e-auction coal. Audit observed the following inadequacies in
railway logistics:
6.6.1 Payment of demurrage charges

The coal supplied through railway rakes was required to be unloaded within a stipulated
period known as ‘Free Time’, beyond which demurrage was charged by Railways. All the 13
stations selected for audit paid demurrage charges amounting to `129.67 crore during the
period from 2010-11 to 2015-16.
Table-6.4: Year-wise demurrage paid by power stations

` in crore)
(`
Sl. No. Name of station 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total
1 Barh 0 0 0 0 1.57 3.58 5.15
2 Sipat 1.79 0.26 2.31 0.98 5.91 3.73 14.98
3 Mouda 0 0 0 1.22 6.56 0.26 8.04
4 Rihand 0.26 0.11 0.05 1.11 3.49 0.94 5.96
5 Vindhyachal 0.87 0.50 0.04 5.64 3.96 2.02 13.03
6 Korba 0.05 0.57 0.77 0.47 1.15 1.27 4.28
7 Dadri 1.23 0.98 1.87 3.75 2.41 1.63 11.87
8 Badarpur 1.58 1.39 1.79 3.72 1.15 0.83 10.46
9 Ramagundum 0.92 0.66 0.40 3.66 1.44 0.01 7.09
10 Farakka 3.17 2.63 2.50 8.23 5.35 10.63 32.51
11 Talcher Thermal 0.01 0.01 0.06 0.05 0.02 0.01 0.16
12 Vallur 0 0 0.01 0 0 0 0.01
13 Jhajjar 1.94 2.04 2.96 1.26 3.19 4.74 16.13
Total 11.82 9.15 12.76 30.09 36.20 29.65 129.67
The demurrage had to be paid on account of inefficiencies of the stations in unloading coal
from railway rakes.
Ministry stated (November 2016) that all efforts were made to reduce the demurrage but
some of the times, it became unavoidable due to reasons beyond the control of the company
e.g. bunching of rakes, maximum permissible free time allowed by Indian Railways being
39
inadequate for long sidings etc. Ministry added that demurrage has decreased during 2011-12
and on company-wide basis, demurrage has decreased over the last two years.
The reply is to be viewed against the fact that demurrage was not recoverable from tariff and
hence there is a need to avoid payment of demurrage.
6.6.2 Diverted rakes

Indian Railways routinely diverted rakes of coal consigned for one consumer to another, due
to congestion on a particular line or route. Even if the rakes were diverted, the bills were
required to be cleared by the original consignee as per terms of FSA. The rake which arrived
at a station but not originally consigned to it was termed ‘diverted in’ rake while the rake
which was originally consigned to the station but diverted to another consumer was termed
‘diverted out’ rake. Reconciliation at periodical intervals was carried out in coordination with
Railways to make adjustments for ‘diverted in’ and ‘diverted out’ rakes. Adjustments in
prices were carried out following reconciliation of quantity diverted. Quality of coal diverted
was not considered for price adjustments.
Audit noticed that the diversion was not always between power stations of NTPC. In cases
where rakes were ‘diverted in’ or ‘diverted out’ between stations of NTPC and other
companies, there would be an adverse impact on NTPC on account of high GCV coal of
NTPC stations being ‘diverted out’ and low GCV coal of other companies ‘diverted in’.
Ministry stated (November 2016) that the matter had been suitably taken up and added that
there is ‘NIL’ diversion of rakes outside the NTPC in last two years.
While noting the response of the Ministry, Audit noticed (from data reported by the power
stations) that diversion of rakes to other than NTPC stations persisted at Ramagundam and
Jhajjar stations in 2015-16 also.
40
Chapter 7
Consumption of Coal by Power Stations
Coal is the primary fuel for the coal fired power stations while oil (High Speed Diesel and
Light Diesel Oil) is the secondary fuel. Coal is used to boil water which is converted into
steam. The steam, in turn, drives turbine generators to produce electricity. For producing one
unit of electricity, 500 gm to one kg of coal and around one ml of oil is consumed. Audit
analysed various aspects relating to consumption of coal by the 13 stations selected for audit
and the following position emerged:
7.1 Specific Coal Consumption by Stations

Coal used to produce one unit of energy is termed as ‘Specific Coal Consumption’ (SCC).
SCC is arrived at by dividing the quantity of coal consumed by the number of units of
electricity generated by the station, for a given period. The pattern of SCC in 11 out of 13
stations examined by Audit during the period from 2010-11 to 2015-16 is summarized in the
following table. Monthly average SCC for the stations (from April 2010 to March 2016) is
given in Annexure 7.1.
Table-7.1: Specific Consumption of Coal by Stations
Name of Coal used to produce one unit of energy (yearly average in kg) Min SCC Max SCC
station 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 (Monthly avg. in kg)
Dadri 0.66 0.67 0.69 0.67 0.71 0.65 0.61 0.76
Badarpur 0.81 0.89 0.88 0.86 0.82 0.76 0.70 1.02
Mouda 0.00 0.00 0.00 0.84 0.69 0.65 0.56 3.21
Rihand 0.64 0.67 0.69 0.71 0.69 0.66 0.60 0.75
Sipat 0.00 0.64 0.64 0.63 0.60 0.63 0.56 0.73
Vindyachal 0.68 0.69 0.73 0.69 0.70 0.69 0.64 0.77
Vallur 0.00 0.00 0.79 0.67 0.68 0.67 0.60 0.87
Talcher 0.82 0.81 0.82 0.82 0.80 0.82 0.66 0.84
Jhajjar 0.70 0.80 0.72 0.73 0.78 0.70 0.63 0.93
Ramagundum 0.59 0.59 0.62 0.67 0.69 0.67 0.50 0.75
Farakka 0.66 0.69 0.80 0.73 0.73 0.75 0.57 0.89
Korba 0.74 0.72 0.75 0.73 0.72 0.70 0.61 0.82
Barh 0.00 0.00 0.00 0.00 0.60 0.63 0.57 0.66
The above data shows that the average coal used annually to produce one unit of energy
ranged between 0.59 kg to 0.89 kg in the sample reviewed during the period from 2010-11 to
2015-16. Although yearly average SCC remained below one kg, there were significant
monthly variations as can be seen from the range of minimum and maximum monthly SCC.
Notably, the maximum SCC in some cases was very high, at 3.21 kg in the case of Mouda
and 1.02 kg in the case of Badarpur. Keeping in view the fact that the stations were required
to meet their coal requirements from the ACQ allocated to them, SCC beyond a limit ought to
be monitored by the power stations for their smooth operation.
Ministry has noted the Audit observation (November 2016).
41
7.2 Blending of imported coal with domestic coal

The stations were allocated imported coal by the Corporate Office of the Company to
supplement domestic coal supplies. The imported coal was blended with domestic coal and
fired in the boilers. GCV of imported coal ranged from 5700 to 6300 kCal/kg while that of
domestic coal ranged from around 2900 to 4200 kCal/kg (GCV of coal measured at the time
of ‘firing’). The blending ratio adopted by the eleven stations reviewed in audit varied
between 0 to 55 percent.
Audit noticed that maximum permissible blending ratio as per Central Electricity Authority
(CEA) was 30 percent which was exceeded in five stations, viz.,Vallur (55.04 percent),
Farakka (40.15 percent), Jhajjar (41.25 percent), Barh (36.86 percent) and Mouda
(61 percent). Given the very high difference in quality (GCV) between domestic and
imported coal, it was expected that blending of higher percentage of imported coal would
result in lower consumption of the blended coal for the same amount of energy generated.
Audit noticed instances where the coal used to produce one unit of energy, i.e., SCC
remained the same, irrespective of whether imported coal was blended to a lesser or greater
extent as shown in Annexure 7.2. This raises doubts whether imported coal was indeed
superior to domestic coal even though the Company incurred higher cost for procuring it.
Ministry stated (November 2016) that SCC at any time depends upon several factors
including the coal quality, which may be very poor for domestic coal based on the
source/seam/season etc. and added that imported coal was blended with domestic coal to
maintain the SCC at desired level. Ministry further stated that GCV of domestic coal varied
widely depending on the coal source (whether supply was from ECL, CCL etc.) and added
that even there was no blending, SCC varied from 0.66 to 0.73 at Rihand.
Ministry has argued that domestic coal quality was very poor. Audit noticed that while
domestic coal supplies were from mines which have a 'Declared Grade', the source of
imported coal was not known to the Company (refer Para 4.2 of Chapter 4 - Import of Coal).
Quantity-wise imported coal was considered to be equivalent to 1.3 to 1.5 times of domestic
coal but no perceptible advantage in SCC was noticed even after blending imported coal up
to 30 percent in some months.
7.3 Use of washed coal to reduce environmental pollution

Ministry of Environment and Forests (MoEF) guidelines (September 1997 and June 1998)
stipulated that from June 2001 onwards (extended to June 2002), raw coal has to be cleaned
to reduce the ash content to less than 34 percent, if coal is transported beyond 1000 kms31 or
if burnt in environmentally sensitive areas. In that case, the entire coal to be used in those
stations should be washed coal in order to meet the requirement of MoEF guidelines.
Out of 13 stations selected for audit, six stations (Vindyachal, Korba, Sipat, Rihand, Talcher
Thermal and Ramagundum) are pithead and the above guidelines were not applicable to
them. Use of washed coal by Dadri and Badarpur stations in the sample is given below:
31
Subsequently, vide Notification No.-GSR- 02(E) dated 02 January 2014, these Rules were made applicable for 750-1000
Kms. w.e.f. 01 January 2015 and for 500-750 Kms. w.e.f. 05 June 2016.
42
Table-7.2: Use of washed coal by stations
Name of station Year Total Total quantity Percentage of washed coal to

quantity of of washed coal total coal procured
coal procured procured
(Tonnes) (Tonnes)
a b c d e= d/c x 100
Dadri 2010-11 64,73,355 45,15,269 69.75
2011-12 71,76,435 49,41,399 68.86
2012-13 71,82,266 46,65,349 64.96
2013-14 71,45,332 38,62,744 54.06
2014-15 66,71,333 30,30,935 45.43
2015-16 59,48,795 33,51,437 56.34
Total 405,97,516 243,67,133 60.02
Badarpur 2010-11 32,78,899.73 8,82,067.32 26.90
2011-12 41,60,266.90 3,42,537.74 8.23
2012-13 41,13,054.98 4,50,893.91 10.96
2013-14 38,42,055.75 5,87,812.16 15.30
2014-15 28,39,043.56 4,71,932.64 16.62
2015-16 15,00,499.02 4,44,978.92 29.66
Total 197,33,819.94 31,80,222.69 16.12
Note: Among other five non-pit head stations in the audit sample viz.,Vallur and Jhajjar procured 4957858.60
MT and 15543135 MT of coal respectively during the period of audit, out of which washed coal
quantity was ‘nil’. Data in respect of Mouda, Farakka and Barh were not made available.
From the above data, Audit observed that:

(i) At Dadri station, percentage of washed coal to total coal showed a declining trend
during the period from 2010-11 to 2014-15. In 2014-15, quantity of raw coal exceeded
quantity of washed coal, indicating that there was deterioration in the degree of compliance
with MoEF orders. The situation improved in 2015-16.
(ii) In the case of Badarpur, percentage of washed coal to total coal decreased drastically
from 2010-11 to 2011-12 but has been increasing gradually over the years. However,
procurement of washed coal, on an average during 2010-11 to 2015-16 was only 16 percent
of total coal procured.
Ministry stated (November 2016) that coal of requisite quality conforming to statutory
obligations was required to be supplied by the coal companies. Ministry added that as per
MoEF gazette notification dated 02 January 2014, coal companies were responsible for
supplying coal with less than 34 percent ash to the identified power stations.
Use of un-washed coal infringed upon the guidelines issued by MoEF. NTPC ought to have
taken appropriate steps to ensure compliance (to wash coal on its own or tie up with
washeries) quite apart from the obligations of the coal companies.
43
Chapter 8
Conclusion
Conclusion and Recommendations
8.1 Conclusion
The installed electricity generation capacity in the country as on 31 October 2016 was
307278 MW out of which coal based generation capacity was 186493 MW (60.69 percent).
Coal cost constitutes 60 to 70 percent of the total generation tariff of a coal based power
station. Audit of fuel management in the power stations indicated inefficiencies which
increased fuel cost of the power stations and cost of energy to the ultimate consumers.
Supply of domestic coal to power stations was governed by National Coal Distribution Policy
(NCDP) notified by Ministry of Coal. Domestic coal was supplied to power stations by coal
linkages established through Fuel Supply Agreements (FSAs) at prices notified by Coal India
Limited (CIL). However, inadequate coal linkages of power stations, delay in signing of
FSAs and intra year shortfall in supplies led to procurement of coal at prices higher than the
notified rates. Power stations also incurred additional cost by way of performance incentives
even for quantities within Annual Contacted Quantity (ACQ) and on deemed delivered
quantities, premium on MoU procurement, e-auction etc. Besides, the power stations paid
performance incentives for additional annual supplies even as they suffered generation loss
due to intra year shortfall in coal supply. The Company incurred additional expenditure of
`6869.95 crore over 2010-16 in procurement of domestic coal even as it lost an opportunity
to generate revenue of `4299.80 crore due to full or partial outages of stations on account of
shortage of coal.
Though the Company has been importing coal since 2005-06, no comprehensive policy for
import of coal had been designed resulting in non-uniform decisions regarding splitting of
packages among bidders, qualification requirements, re-tendering and annulment of
packages. Imported coal having higher Gross Calorific Value (GCV) compared to domestic
coal but was stored in the same yard affecting the blending ratio of domestic and imported
coal. Besides, Audit noticed that despite the very significant quality difference (GCV
difference) between domestic and imported coal, the specific coal consumption of the power
station was not significantly affected by a change in the quantity of imported coal blended.
Fuel price depends on the quantity and quality of coal. To accurately determine the ‘quantity
of fuel procured’, proper weighment of coal was necessary. Weighment of domestic coal was
not carried out regularly when the rakes arrived, despite the provision of in-motion weigh
bridges. Instead of ascertaining transit loss of coal (difference between quantity of coal
dispatched from the mines and quantity of coal received by stations) by weighing the railway
rakes, an indirect method called ‘volumetric method’ was used. There were also concerns
regarding accuracy of the stock reported at the stations, considering that some stations
reported larger stocks than the storage capacity of yard.
The quality of coal (represented by GCV) was measured by three different methods; while
paying for coal imports, Air Dried Basis (ADB) method was used, while paying to domestic
45
coal companies for supplies Equilibrated Moisture (EM) method was used and for energy
billing Total Moisture (TM) method was used. ADB method gives the highest value of GCV
while TM gives the lowest. As fuel cost is directly proportional to GCV, working out GCV
on ADB and EB method increased the fuel cost for the power stations. Energy charges are
however inversely proportional to GCV and employing the methodology to generate the
lowest GCV value (TM method) increased energy charges recoverable from consumers.
Besides, there were significant differences in GCV of coal ‘as received’ in the power stations
and ‘as fired’ by them. Such significant differences were not technically expected and were
within the control of the power stations. The energy charges were worked out on the basis of
GCV ‘as fired’. Audit worked out the energy charges on the basis of GCV ‘as received’ for a
one year period (October/ November 2012 to September 2013) and noted that energy charges
would have been lower by `1440.33 crore had it been worked out on GCV ‘as received’
basis.
Audit of fuel management of coal based power stations in NTPC indicated inefficiencies in
coal procurement (domestic procurement and import), storage, supply and consumption
which led to higher fuel cost of the stations which were passed on to the final customer
through higher energy charges.
8.2 Recommendations
8.2.1. In order to undertake corrective measures for overcoming the deficiencies in fuel
management, following recommendations are made for implementation by NTPC:
1. The Company may review the procedures for procurement of coal above notified rates
such as incentive procurement, MOU, e-auction and imports.
2. The Company may invoke, wherever feasible, provisions in the existing Fuel Supply
Agreements for inter-station transfer of coal to tide over temporary coal shortages.
3. The Company may formulate a policy for import of coal. Action may also be taken to
ensure source and quality of imported coal.
4. Methods for measurement of GCV for procurement of coal and billing of energy may be
standardized in coordination with competent authorities.
5. Weighment of coal may be carried out at the time of receipt of coal at unloading point to
ascertain the actual transit loss and take remedial measures.
8.2.2. The Company is the largest power generating utility in the country and the
inadequacies noticed by Audit also require intervention at the Ministry/Regulatory level for
appropriate remedial action for the power sector as a whole. The following recommendations
are, therefore, suggested to Ministry of Power:
6. Pricing of energy is based on Station Heat Rate, which, in turn, is based on quantity and
quality of coal (GCV) consumed by the stations. While quantity of coal received is not
weighed by the stations, quality assessment of coal has inherent as well as manmade
infirmities due to heterogeneous nature of coal and sampling errors. There is a need to
appropriately review the method for energy pricing. Ministry may coordinate with
46
Central Electricity Regulatory Commission to examine this aspect in the light of the
audit findings.
7. The commercial terms in FSAs were not in accordance with New Coal Distribution
Policy and FSAs did not have safeguards for intra-year shortfall in deliveries. Ministry
may, therefore, review the terms of FSAs in consultation with Ministry of Coal/Coal
India Limited to rectify these inadequacies.
The above recommendations were discussed in the Exit Conference held in October 2016 and
Ministry/NTPC Limited were generally in agreement with the recommendations.
47
Annexure 3.1
Range of monthly and quarterly deviation in actual vis-à-vis scheduled supplies
(Referred to in para 3.1.5.1)
Name of Name of coal No. of months having a No. of quarters having a

station company variation of > 10 per cent variation of > 10 per cent
from monthly scheduled from quarterly scheduled
quantity quantity
Instances Range Instances Range (in %)

(in %)
Badarpur ECL 57 out of 67 -100 to 337 20 out of 23 -33 to 112

CCL 49 out of 72 -100 to 41.43 18 out of 22 -98 to 14
Dadri ECL (FSA 28 out of 31 -100 to -1.62 6 out of 10 -33 to -1
signed in
September
2013)
CCL 60 out of 72 -63 to 107 13 out of 24 0 to 32
Vindhyachal NCL 36 out of 72 -36 to 136 7 out of 24 -20 to 24
Sipat SECL 60 out of 72 -99 to 59 20 out of 24 -37 to 71
Rihand NCL 39 out of 72 -36 to 32 12 out of 24 -16 to 16
Korba NCL 28 out of 72 -25 to 35 9 out of 24 -21 to 17
Vallur MCL (FSA 32 out of 32 -27 to -67 10 out of 10 -57 to -42
signed in July
2013)
Talcher MCL (data 49 out of 60 -20 to 68 18 out of 20 2 to 48
for 2015-16
not provided)
Ramagundum SCCL 52 out of 72 -39 to 61 16 out of 24 -13 to 41
MCL 67 out of 72 -100 to 158 21 out of 24 -100 to 58
SECL 67 out of 72 -100 to 648 23 out of 24 -100 to

357
Farakka ECL 47 out of 60 -67 to 56 15 out of 20 -15 to 37
BCCL 51 out of 60 -100 to 146 8 out of 20 -100 to 75
MCL 23 out of 24 -100 to 79 8 out of 8 -82 to -24
CCL 24 out of 24 -100 to 3 8 out of 8 -74 to 25
NECL 54 out of 60 -100 to 192 15 out of 20 -100 to
148
Mouda WCL (clause 15 out of 15 -100 to 11 5 out of 5 -86 to -32
not included
in FSA)
SECL (FSA 10 out of 12 -97 to 134 3 out of 4 -47 to -8
started in Apr
2015)
MCL (FSA 21 out of 21 -100 to -34 7 out of 7 -98 to -41
signed in July
2013 &
terminated in
March 2015)
Jhajjar data not provided
49
Annexure-5.1
Comparison of SHR reported by stations using GCV ‘As Fired’ and SHR worked out using GCV ‘As Received’
(Referred to in para 5.2.1)
(Figures in kCal/kWhr)
Name of station Range of SHR reported Range of SHR worked out Range of difference
by stations (using GCV using GCV 'as received'
'as fired')
1 2 3
Dadri Stage I 2376 - 2411 2416 - 3198 6-803
Dadri Stage II 2356 - 2408 2350- 2951 (-)47 - 568
Talcher 2804 -2828 3429 -3510 625 - 682
Badarpur 2614 - 2765 3187 - 3572 477 - 828
Korba Stage I & II 2371 - 2398 2488 -2870 102 - 499
Korba Stage III 2347 - 2481 2472 - 2852 29 -501
Vallur 2417 - 2659 2765 - 3656 110 -1103
Rihand stage I 2318 - 2368 2728 - 2900 360 - 572
Rihand stage II 2338 - 2384 2724 - 2996 375 - 652
Rihand stage III 2321 - 2530 2536 - 3848 215 - 1124
Sipat 2279 - 2375 2079-2972 (-)44 - 611
Farakka 2395 - 2406 3244 - 3667 848 - 1261
50
Annexure-6.1
Details of stations which had zero stock of coal
(Referred to in Para 6.1)
2012-13 2013-14 2014-15
Month Stations having zero Month Stations having zero Month Stations having zero
domestic coal stock domestic coal stock domestic coal stock
Stations No. of days Stations No. of days Stations No. of days
April - - Dadri 20 April - -
April
May - - Badarpur 3 May - -
Unchahar 2 Dadri 14 June - -
June May
Dadri 1 Farakka 1 July Vindhyachal 2
Farakka 2 June - - August - -
Unchahar 16 July Ramagundum 6 September Ramagundum 7
July
Kahalgaon 1 August - - Rihand 2
Dadri 4 September - - Unchahar 26
August Unchahar 8 October Ramagundum 1 October Tanda 9
Vindhyachal 5 Rihand 1 Badarpur 21
September Tanda 1 November Unchahar 7 Dadri 1
Dadri 5 Talcher Kaniha 1 Vindhyachal 20
October
Sipat 10 Unchahar 14 Badarpur 10
December November
Dadri 13 Ramagundum 1 Tanda 23
November
Sipat 29 Unchahar 18 Unchahar 30
January
December - - Ramagundum 1 Singrauli 16
Dadri 15 February Unchahar 16 December Unchahar 31
January
Sipat 1 March - - January Unchahar 3
February Dadri 2 February - -
March Dadri 28 March - -
51
Annexure – 7.1
Specific Coal Consumption of Stations from April 2010 to March 2016
(in Kg.)
Month Dadri Farakka APCPL Mouda Ramag- Rihand Sipat Talcher NTECL Vindhy- Badarpur Korba Barh
Jhajjar undum III Thermal Vallur achal IV
Apr-10 0.64 0.77 0 0 0.57 0.67 0 0.81 0 0.71 0.80 0.75 0
May-10 0.67 0.77 0 0 0.56 0.67 0 0.81 0 0.70 0.77 0.72 0
Jun-10 0.64 0.70 0 0 0.57 0.67 0 0.81 0 0.71 0.78 0.75 0
Jul-10 0.64 0.81 0 0 0.60 0.68 0 0.81 0 0.69 0.81 0.80 0
Aug-10 0.67 0.66 0 0 0.63 0.64 0 0.82 0 0.64 0.80 0.79 0
Sep-10 0.69 0.64 0 0 0.62 0.63 0 0.84 0 0.65 0.80 0.74 0
Oct-10 0.67 0.63 0 0 0.61 0.60 0 0.82 0 0.67 0.81 0.68 0
Nov-10 0.68 0.63 0 0 0.59 0.63 0 0.82 0 0.65 0.81 0.76 0
Dec-10 0.71 0.60 0 0 0.58 0.62 0 0.82 0 0.66 0.80 0.75 0
Jan-11 0.63 0.59 0 0 0.57 0.62 0 0.81 0 0.67 0.85 0.70 0
Feb-11 0.64 0.00 0 0 0.58 0.63 0 0.82 0 0.68 0.87 0.72 0
Mar-11 0.65 0.58 0.70 0 0.58 0.60 0 0.82 0 0.68 0.84 0.72 0
Apr-11 0.63 0.61 0.78 0 0.58 0.63 0 0.81 0 0.69 0.84 0.74 0
May-11 0.63 0.66 0.71 0 0.61 0.64 0 0.81 0 0.68 0.83 0.72 0
Jun-11 0.65 0.65 0.77 0 0.62 0.68 0 0.82 0 0.70 0.84 0.71 0
Jul-11 0.65 0.66 0.93 0 0.57 0.69 0 0.82 0 0.70 0.83 0.73 0
Aug-11 0.69 0.69 0.91 0 0.57 0.68 0 0.82 0 0.72 0.87 0.72 0
Sep-11 0.67 0.69 0.84 0 0.50 0.69 0 0.83 0 0.65 1.02 0.67 0
Oct-11 0.71 0.67 0.75 0 0.55 0.64 0.64 0.82 0 0.67 0.99 0.68 0
Nov-11 0.69 0.72 0.80 0 0.59 0.67 0.64 0.82 0 0.70 0.89 0.71 0
Dec-11 0.67 0.72 0.77 0 0.65 0.70 0.63 0.81 0 0.69 0.94 0.74 0
Jan-12 0.67 0.71 0.78 0 0.61 0.69 0.60 0.80 0 0.69 0.89 0.74 0
Feb-12 0.68 0.77 0.71 0 0.63 0.67 0.69 0.81 0 0.71 0.86 0.73 0
52
Mar-12 0.66 0.73 0 0.59 0.68 0.67 0.82 0 0.70 0.87 0.71 0
Apr-12 0.69 0.70 0.70 0 0.63 0.70 0.63 0.82 0 0.70 0.87 0.73 0
May-12 0.66 0.72 0.72 0 0.62 0.70 0.62 0.82 0 0.71 0.92 0.72 0
Jun-12 0.67 0.67 0.73 0 0.59 0.70 0.67 0.82 0 0.73 0.93 0.75 0
Jul-12 0.73 0.73 0.79 0 0.59 0.73 0.73 0.82 0 0.76 0.90 0.69 0
Aug-12 0.76 0.89 0.76 0 0.58 0.68 0.63 0.82 0 0.77 0.90 0.73 0
Sep-12 0.74 0.84 0.76 0 0.58 0.66 0.65 0.82 0 0.74 0.92 0.76 0
Oct-12 0.70 0.85 0.80 0 0.69 0.66 0.60 0.82 0 0.72 0.89 0.82 0
Nov-12 0.65 0.78 0.71 0 0.63 0.68 0.58 0.82 0.86 0.69 0.88 0.69 0
Dec-12 0.67 0.79 0.68 0 0.64 0.67 0.62 0.81 0.87 0.73 0.87 0.77 0
Jan-13 0.67 0.88 0.66 0 0.64 0.67 0.67 0.81 0.78 0.72 0.85 0.75 0
Feb-13 0.67 0.87 0.63 0 0.65 0.71 0.62 0.81 0.74 0.71 0.82 0.77 0
Mar-13 0.69 0.85 0.67 0 0.62 0.67 0.63 0.81 0.70 0.74 0.81 0.79 0
Apr-13 0.66 0.79 0.66 0.00 0.65 0.67 0.61 0.81 0.68 0.72 0.85 0.77 0
May-13 0.63 0.77 0.80 0.00 0.67 0.67 0.67 0.82 0.66 0.68 0.86 0.74 0
Jun-13 0.62 0.77 0.80 3.21 0.66 0.69 0.68 0.82 0.60 0.67 0.86 0.78 0
Jul-13 0.62 0.74 0.78 1.30 0.64 0.70 0.66 0.82 0.62 0.70 0.85 0.71 0
Aug-13 0.68 0.75 0.72 1.17 0.66 0.73 0.64 0.82 0.68 0.71 0.87 0.67 0
Sep-13 0.68 0.77 0.70 1.20 0.72 0.69 0.66 0.82 0.67 0.68 0.88 0.67 0
Oct-13 0.70 0.77 0.76 1.52 0.70 0.73 0.64 0.82 0.71 0.67 0.87 0.69 0
Nov-13 0.70 0.69 0.71 1.08 0.69 0.72 0.63 0.82 0.69 0.65 0.88 0.70 0
Dec-13 0.69 0.66 0.71 1.02 0.68 0.75 0.58 0.81 0.73 0.72 0.84 0.74 0
Jan-14 0.68 0.70 0.68 0.86 0.66 0.72 0.62 0.81 0.69 0.71 0.83 0.74 0
Feb-14 0.68 0.67 0.72 0.61 0.66 0.71 0.60 0.81 0.69 0.71 0.83 0.74 0
Mar-14 0.71 0.72 0.76 0.56 0.67 0.72 0.62 0.81 0.68 0.70 0.85 0.81 0
Apr-14 0.70 0.77 0.75 0.56 0.68 0.72 0.59 0.81 0.65 0.71 0.81 0.70 0
53
May-14 0.68 0.75 0.74 0.58 0.68 0.69 0.65 0.81 0.66 0.71 0.81 0.73 0
Jun-14 0.67 0.77 0.78 0.67 0.70 0.70 0.61 0.81 0.68 0.71 0.82 0.74 0
Jul-14 0.71 0.74 0.82 0.78 0.74 0.71 0.57 0.82 0.67 0.72 0.85 0.78 0
Aug-14 0.71 0.77 0.86 0.79 0.75 0.72 0.62 0.82 0.73 0.71 0.87 0.75 0
Sep-14 0.72 0.74 0.83 0.75 0.70 0.70 0.59 0.82 0.66 0.72 0.87 0.69 0
Oct-14 0.73 0.74 0.87 0.73 0.66 0.68 0.62 0.82 0.69 0.68 0.87 0.67 0
Nov-14 0.72 0.72 0.80 0.68 0.66 0.71 0.59 0.82 0.71 0.68 0.81 0.78 0.57
Dec-14 0.74 0.70 0.72 0.74 0.67 0.69 0.59 0.82 0.70 0.69 0.81 0.76 0.59
Jan-15 0.72 0.69 0.71 0.72 0.71 0.66 0.62 0.66 0.69 0.70 0.77 0.71 0.59
Feb-15 0.71 0.72 0.72 0.73 0.68 0.67 0.56 0.81 0.67 0.70 0.76 0.69 0.60
Mar-15 0.71 0.67 0.72 0.71 0.67 0.65 0.57 0.81 0.63 0.70 0.76 0.67 0.65
Apr-15 0.63 0.82 0.71 0.68 0.69 0.66 0.67 0.81 0.64 0.71 0.80 0.69 0.66
May-15 0.61 0.79 0.65 0.70 0.70 0.67 0.66 0.82 0.65 0.69 0.77 0.78 0.64
Jun-15 0.62 0.78 0.69 0.69 0.71 0.71 0.64 0.82 0.66 0.72 0.77 0.73 0.62
Jul-15 0.66 0.78 0.68 0.71 0.69 0.68 0.62 0.82 0.64 0.71 0.78 0.77 0.65
Aug-15 0.68 0.75 0.71 0.73 0.70 0.67 0.64 0.83 0.67 0.69 0.76 0.79 0.64
Sep-15 0.69 0.72 0.70 0.71 0.69 0.66 0.67 0.83 0.73 0.71 0.79 0.74 0.65
Oct-15 0.65 0.72 0.69 0.70 0.68 0.65 0.59 0.83 0.69 0.69 0.73 0.65 0.66
Nov-15 0.64 0.71 0.64 0.74 0.67 0.65 0.61 0.83 0.70 0.70 0.70 0.64 0.66
Dec-15 0.65 0.74 0.72 0.72 0.66 0.63 0.60 0.83 0.68 0.71 0.74 0.68 0.61
Jan-16 0.66 0.72 0.74 0.00 0.65 0.67 0.63 0.82 0.64 0.67 0.74 0.63 0.60
Feb-16 0.65 0.71 0.75 0.73 0.61 0.63 0.62 0.82 0.66 0.67 0.74 0.66 0.57
Mar-16 0.61 0.74 0.71 0.72 0.62 0.63 0.61 0.82 0.69 0.66 0.74 0.61 0.60
54
Annexure-7.2
Impact of blending of imported coal on Specific Coal Consumption (SCC)
Sl. Station SCC (in kg) Month (blending ratio)
No. (Difference of 6% and above taken into account)
1 Badarpur 0.80 December 2010 (8%) August 2010 (21%)
0.81 October 2010 (4%) July 2010 (14%)
0.87 August 2011 (0.01%) February 2011 (7%)
2 Rihand 0.63 November 2010 (2%) September 2010 (10%)
0.66 September 2012 (0%) January 2015 (7%)
0.67 February 2012 (0%) June 2010 (9%)
0.68 August 2012 (0%) August 2011 (15%)
0.69 January 2012 (1%) September 2011 (12%)
0.70 May 2012, June 2012 and September 2014 (13%)
April 2012 (0%)
0.71 February 2014 (0%) November 2014 (8%)
0.72 November 2013, January August 2014 (6%)
2014 and April 2014 (0%)
0.73 July 2012 and December August 2013 (11%)
2013 (0%)
3 Dadri 0.63 April 2011 (9%) May 2013 (25%)
0.64 February 2011 (7%) July 2010(22%)
0.65 March 2011 (3%) July 2011 (25%)
0.66 April 2013 (6%) March 2012(21%)
0.67 February 2013 (8%) June 2012 (30%)
0.68 February 2014 (1%) August 2013(22%)
0.69 March 2013 (1%) August 2011 (23%)
0.71 December 2010 (2%) March 2015 (28%)
0.72 September 2014 (11%) January 2015 (24%)
0.74 September 2012 (1%) December 2014 (23%)
4 Sipat 0.58 December 2013 (5%) November 2012 (16%)
0.59 April 2014 (4%) September 2014 (15%)
0.61 April 2013 (3%) June 2014 (9%)
0.62 May 2012 (1%) August 2014 (13%)
0.63 March 2013 (4%) August 2012 (15%)
0.64 October 2011 (4%) August 2013 (12%)
0.65 May 2014 (8%) September 2012 (22%)
0.67 June 2012 (5%) May 2013 (14%)
5 Vindhachal 0.65 November 2013 (1%) September 2011 (13%)
0.67 October 2010 and October October 2011 (8%)
2013 (2%)
0.68 March 2011 (2%) October 2014 (9%)
0.69 December 2014 and July 2010 (7%)
January 2012 (0%)
0.70 January 2015, March 2012 March 2015 (7%)
and April 2012 (0%)
0.71 February 2014, May 2012, June 2010 (7%)
February 2012, February
2013 and January 2014
(0%)
55
Sl. Station SCC (in kg) Month (blending ratio)
No. (Difference of 6% and above taken into account)
0.72 January 2013 and August 2011 (8%)
December 2013 (0%)
6 Vallur 0.66 May 2013 (30%) September 2014 (49%)
0.67 September 2013 (20%) July 2014 (52%)
0.68 April 2013 (20%) March 2014 (38%)
0.69 January 2015 (32%) October 2014 (43%)
0.70 March 2013 (35%) December 2014 (55%)
October 2013 (13%),
0.71
November 2014 (53%) November 2014 (53%)
Jhajjar 0.70 March 2011 (9.40%) September 2013 (28.65%)
7. 0.71 May 2011 (5.42%) January 2015 (38.21%)
0.72 May 2012 (17.76%) March 2015 (41.25%)
0.75 April 2014 (16.92%) October 2011 (24.05%)
0.76 March 2014 (14.68%) August 2012(38.01%)
0.77 June 2011 (5.01%) December 2011 (17.18%)
0.78 April 2011 (9.88%) June 2014 (32.76%)
0.80 November 2011 (16.38%) October 2012 (31.22%)
8 Ramagundam 0.58 September 2012 (0%) December 2010 (8.55%)
0.62 May 2012 (1.55%) September 2010 (7.59%)
0.63 November & April 2012 August 2010 (10.30%)
(0%)
0.64 December 2012 (0.85%) July 2013 (22.90%)
0.65 December 2011 (0%) February 2013 (9.68%)
0.66 February 2014 (0.86%) October 2014 (22.20%)
0.67 May 2013 (0.60%) March 2015 (25.42%)
0.68 December 2013 (6.34%) May 2014 (21.82%)
0.70 October 2013 (0%) September 2014 (8.28%)
9. Talcher 0.81 February 2014 (0%) April 2010, May 2010,
July 2010, June 2010 (4%)
0.82 November 2012 (0%) August 2010 (1%)
10. Korba September 2011, March
0.67 October 2014 (1%)
2015 (4%)
0.69 November 2012 (1%) September 2014 (8%)
0.71 March 2012 (1%) January 2015 (6%)
0.72 May 2010 (1%) May 2011 (6%)
July 2011 and August
0.73 May 2014 (3%)
2012 (5%)
April 2011, December 2013
0.74 May 2013 (8%)
(1%)
June 2012 and August
0.75 December 2010 (1%)
2014 (5%)
0.76 November 2010 (3%), September 2012 (9%)
0.78 July 2014 (5%) June 2013 (8%)
56
List of Abbreviations
Sl. No. Abbreviation Full Form

A
1. ACQ Annual Contracted Quantity
2. ADB Air Dried Basis
3. ARB As Received Basis
B
4. BCCL Bharat Coking Coal Limited
C
5. CCL Central Collieries Limited
6. CEA Central Electricity Authority
7. CERC Central Electricity Regulatory Commission
8. CIL Coal India Limited
9. COD Commercial Operation Date
10. CPRI Central Power Research Institute
11. CSGS Central Sector Generating Stations
12. CVC Central Vigilance Commission
13. CVO Chief Vigilance Officer
D
14. DC Declaration of Capacity
15. DDQ Deemed Delivered Quantity
E
16. ECR Energy Charge Rate
17. ECL Eastern Coalfields Limited
18. EM Equilibrated Method
F
19. FOB Free on Board
20. FOR Free on Road
21. FSA Fuel Supply Agreement
G
22. GAR Gross as Received
23. GCV Gross calorific Value
I
24. ICB International Competitive Bidding
25. IGSTPP Indira Gandhi Super Thermal Power Project
26. IIA Independent Inspection Agency
27. IM Inherent Moisture
28. IMTF Inter Ministerial Task Force
J
29. JVs Joint Ventures
M
30. MCL Mahanadi Coalfields Limited
57
31. MoC Ministry of Coal

32. MGR Merry Go Round
33. MoEF Ministry of Environment and Forest
34. MoP Ministry of Power
35. MoU Memorandum of Understanding
36. MMT Million Metric Tonne
37. MT Million Tonne
38. MTPA Million Tonne Per Annum
39. MU Million Units
40. MW Mega Watt
N
41. NCCL North East Coalfields Limited
42. NCDP New Coal Distribution Policy
43. NCL Northern Coalfields Limited
O
44. O&M Operation and Maintenance
P
45. PLF Plant Load Factor
46. PI Performance Incentive
47. PSUs Public Sector Undertakings
Q
48. QR Qualifying Requirement
R
49. RR Railway Receipt
S
50. SCC Specific Coal Consumption
51. SCCL Singareni Collieries Company Limited
52. SECL South Eastern Coalfields Limited
53. SHR Station Heat Rate
54. SLC-LT Standing Linkage Committee - Long Term
55. STC State Trading Corporation of India Limited
T
56. TM Total Moisture
57. TMB Total Moisture Basis
U
58. UHV Useful Heat Value
59. UI Unscheduled Interchange
W
60. WCL Western Coalfields Limited
58
Glossary of Technical Terms
Sl. No. Term Description

1. Air Dried Basis A method of determining Gross Calorific Value of coal by
(ADB) taking into account the moisture inherently present in coal
(excluding Surface Moisture).
2. Annual Annual Contracted Quantity is the quantity of coal agreed to be
Contracted supplied every year under the Fuel Supply Agreement signed
Quantity (ACQ) between NTPC and the coal companies.
3. Auxiliary Power consumed within the premises of the generating station
consumption is referred to as Auxiliary consumption.
4. Bomb Bomb calorimeter is a device used to determine the energy
Calorimeter contained in a substance by measuring the heat generated
during its combustion.
5. Carpeting of coal It is the initial process of preparation of coal yard for storage. A
yard layer of compressed coal is spread on the yard to serve as a
carpet upon which further heaps of coal are placed.
6. Central Sector The generating stations of companies owned or controlled by
Generating the Central Government.
Station (CSGS)
7. Commercial The date declared by the generator on achieving maximum
Operation Date continuous rating through a successful trial run.
(COD)
8. Declared ‘Declared Capacity’ or ‘DC’ in relation to a generating station
Capacity (DC) means the capability to deliver electricity in MW declared by
such generating station in relation to any time-block of the day
as defined in the Grid Code or whole of the day, duly taking
into account the availability of fuel and water.
9. Deemed As per the Fuel Supply Agreement signed between NTPC and
Delivered the coal companies, certain quantities of coal, though not
Quantity (DDQ) actually supplied, are deemed to have been supplied. These
include the quantity of coal not supplied owing to omission or
failure on the part of purchaser to submit in advance the
designated rail programmes; the quantity of coal not supplied
owing to cancellation, withdrawal or modification of the rail
programmes; the quantity of coal not supplied owing to seller
exercising the right of suspension of supplies; the quantity of
coal offered from alternative source including imported coal
which is not accepted by the purchaser, etc.
10. Equilibrated A method of determination/computation of Gross Calorific
Basis Value of coal expressed at Equilibrated Moisture level
determined at 60 percent relative humidity, at 40 degree
Celsius.
11. Equilibrated The moisture content as determined after equilibrating the coal
Moisture sample at 60 percent relative humidity, at 40 degree Celsius as
per the relevant provisions of Bureau of Indian Standards.
12. Free on Board FOB is a term used in imports/exports, requiring the seller to
59
(FOB) deliver goods on board a vessel designated by the buyer. The

seller fulfils its obligations and title to the goods is transferred
to the purchaser when the goods have passed over the ship’s
rail.
13. FOR destination A term used in contracts for Sale of Goods wherein the seller
pays the cost of carriage, including insurance, necessary to
bring the goods to the named destination.
14. Fuel Supply FSA is a legally enforceable agreement between the seller
Agreement (FSA) (coal company) and the consumer (generating company)
wherein the terms and conditions regarding coal supplies such
as Annual Contracted Quantity, Grade(s), procedure for
checking quality, source of supply, commercial terms, etc. are
specified. FSAs are valid for 20 years, with a provision for
review every five years.
15. Gross Calorific GCV denotes the heat produced by complete combustion of
Value (GCV) unit quantity of coal in a Bomb Calorimeter. GCV determines
how much coal is required in the power plant.
16. GCV ‘Ás Billed’ The GCV determined by coal companies by collecting samples
at the loading point near the coal mine, which is used for billing
of coal supplies, is referred to as ‘GCV as billed’.
17. GCV ‘As GCV determined by power stations by collecting samples when
received’ the rakes are received at station, is referred to as GCV ‘As
received’.
18. GCV ‘As fired’ GCV determined by power stations by collecting samples from
the bunkers, just before coal is fed to the boilers, is referred to
as GCV ‘As fired’.
19. Inherent Moisture Inherent moisture means moisture that exists as an integral part
of the coal seam in its natural state, including water in pores,
but excluding that present in macroscopically visible fractures.
20. In-motion Weigh In-motion weigh bridge is a machine installed at power stations
Bridge for weighing railway rakes that bring coal to the stations.
Weighment is done when the rakes are in motion.
21. Kilo Watt Hour It is a unit of energy. When 1000 watts of electrical power is
(kWh) utilised for one hour, the quantum of energy recorded is one
Kilo Watt Hour, commonly referred to as ‘Unit’.
22. Megawatt (MW) Megawatt means one million watts. It is a measure of electrical
power produced by a generating unit in any given instant.
23. Memorandum of Memorandum of Understanding is a bilateral agreement
Understanding between NTPC and coal company, wherein terms and
(MoU) conditions for short term supply of coal are specified.
24. Merry -go- Merry-Go-Round system is a closed-circuit dedicated rail
Round (MGR) network operated by pit-head power plants to transport coal
from the mines to the plant.
25. Million Units Million units (MU) is equivalent to 10,00,000 Kilo Watt Hours.
(MU)
26. Performance As per Fuel Supply Agreement signed between NTPC and coal
Incentive (PI) company, if coal is supplied in excess of 90 percent of Annual
Contracted Quantity in a particular year, NTPC shall pay
Performance Incentive at slab-wise agreed rates.
60
27. Pit Head Station Generating station located near coal mine is referred to as Pit
Head station.
28. Plant Load Factor PLF is the ratio of the total number of units of electricity
(PLF) supplied by a generating station to the total number of units
which would have been supplied if the generating station had
been operated continuously at its maximum continuous rating.
29. Secondary Secondary crusher is a large machine deployed at power
Crusher stations to crush coal supplied by coal companies. It is referred
to as ‘secondary’ since ‘primary crusher’ is used by coal
companies to crush coal to some extent before loading.
30. Specific Coal Coal used to produce one unit of energy is termed as ‘Specific
Consumption Coal Consumption’.
(SCC)
31. Station Heat Rate Operational efficiency of power stations is regulated through a
(SHR) parameter called ‘Station Heat Rate’, which denotes the input
heat value incurred by the station to produce one unit of energy.
32. Surface Moisture Surface moisture in coal results from water held on
the surface of coal particles. This is normally due to exposure
to rain, humidity etc.
33. Tapering Linkage Tapering linkage is the short-term linkage provided to those
coal consumers who have been allocated captive coal blocks for
meeting the coal requirements of their linked end use plants, in
cases where the production of coal from these blocks does not
synchronize with the requirement of the end use plants.
34. Total Moisture Total moisture means the sum of surface and inherent moisture
(TM) content in coal, expressed as a percentage.
35. Unscheduled UI charges are a commercial mechanism to maintain grid
Interchange (UI) discipline. The UI charges are payable by generators and
charges distributors who deviate from the schedule given by Load
Despatch Centers for injection/drawl of electricity on a day to
day basis.
36. Volumetric A method through which quantity of coal is determined based
Method on the dimensions of coal heaps kept in the yard using
mathematical formula, i.e., Weight = Volume x Density of coal.
37. Wagon Tippler Wagon Tippler is a machine used for emptying coal from the
loaded railway wagons that arrive at power station. The
machine holds each wagon from the top as well as sides by
using clamping devices and topples the wagon sideways to
empty the cargo of coal to underground chambers.
61

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Report of the

Comptroller and Auditor General of India

Fuel Management of Coal Based Power

Union Government (Commercial)

Chapter Description Page No.

Executive Summary iii

3 Procurement of Domestic Coal 7

5 Assessment of Quality and Quantity of Coal 25

6 Coal Supply Management 35

7 Consumption of Coal by Power Stations 41

8 Conclusion and Recommendations 45

Glossary of Technical Terms 59

The Performance Audit Report has been prepared under the

Coal cost constitutes 60 to 70 percent of the total generation tariff

Audit wishes to acknowledge the co-operation received from

MAJOR AUDIT FINDINGS

Performance Incentive paid under FSA

Deviation in supplies vis-a-vis scheduled quantity

Non recovery of compensation for short supplies under FSAs

among bidders, qualification requirements, type/GCV of coal to be procured,

Reduction in heat value (Gross Calorific Value) of coal

Blending of imported coal with domestic coal

1.2 Profile of the Company

Table-1.1: Types of generation facilities commissioned as of October 2016

1.3 Organisational Structure

1.4 Fuel Arrangements

Table-1.2: Details of coal procurement from different sources

Coal Coal through

1.5 Performance Audit

2.1 Scope of Audit

2.2 Audit Sample

2.3 Audit objectives

2.4 Audit criteria

2.5 Audit Methodology

2.7 Audit Findings

3.1 Fuel Supply Agreements (FSA)

3.1.1 Stations having inadequate fuel linkage

3.1.1.1 Barh-II power station

3.1.1.2 Kahalgaon-II power station

3.1.1.3 Ramagundam III power station

3.1.4 Performance incentive paid under FSA

3.1.4.1 Payment of Performance Incentive for quantities within ACQ

3.1.4.2 Payment of PI on Deemed Delivered Quantity

3.1.4.3 Additional payment of PI

3.1.5 Implementation of Fuel Supply Agreement

3.1.5.1 Deviation in monthly and quarterly scheduled quantities

3.1.5.2 Non recovery of compensation for short supplies under FSAs

3.1.5.3 Rationalisation of quantities under FSAs

3.2 Procurement of coal through MOUs

Table-4.1: Year-wise quantity and price of imported vis-à-vis domestic coal

4.1 Policy framework for import of coal

4.2 Source verification of quantity and quality of coal

4.3 Indices adopted for price settlement of imported coal

5.1 Sample collection and methods of measurement for coal quality

recording collection particulars, witnessing of collection by NTPC personnel etc.

5.2 Reduction in heat value (GCV) of coal

GCV reduction increased energy charges billed to the beneficiaries, as explained in

5.2.1. Impact of GCV differences on efficiency and energy charges

5.3 Weighment of domestic coal

5.4 Weighment of imported coal

30