Coal
Coal has smaller energy densities than oil and natural gas,
thus lowering its value as an internationally traded asset compared to oil.
Australia is a large international exporter, however. In wide piles near to
shipping ports or other end-use locations, coal is easy to carry. If newly
industrialized regions search for more fuel for energy, demand for globally
imported coal will continue to increase. Coal is an essential energy source.
Electricity and heat are created after the burning of coal. Coal has its
meaning in the commercial sphere. Of the world's power, about 40 percent comes
from coal.
For thermal power generators, coal is the single biggest
cost factor, usually accounting for 60 to 70 percent of input costs. And coal
management is difficult, with players facing a variety of challenges in the
supply chain, from manufacturing to storage management, bulk processing, yard
management, and overall quality management. The addressable value loss will hit
7 to 12 percent of the overall cost of coal across the entire chain in emerging
markets like India.
Where does value getting lost?
In the sector of coal procurement, to begin with. Many power
utilities are dependent on alternate paths, such as spot and short-term coal
contracts or imports, which are unable to satisfy the specifications of
long-term contractual contracts with domestic suppliers. This leads to
logistical difficulties in the context of capacity limitations (including rail
and port) and substantial reductions in quantity due to inadequate external
infrastructure. Furthermore, it is a tremendous challenge to handle quality
declines across the supply chain, compounded by insufficient calculation of
output and inadequate yard and stockpile management activities.
Understanding and evaluating the overall delivered cost of
coal, including FOB port costs, storage, and other indirect costs such as
consistency losses, is needed to assess the best of a variety of possible
sourcing choices. A short supply of domestic coal causes several power plants
to examine imports, which includes a detailed analysis of global coal markets
and the discovery of strategic sourcing opportunities. For example, for
countries such as India and China, small and mid-size mines in Indonesia, with
low cash costs and higher sulphur content, are good bets from a cost
perspective. In addition, as demand-supply and regulatory situations continue
to shift, power players could develop flexibility and take advantage of
developing opportunities to import and use coal of varying grades and quality.
The prospective ban on imports of low-grade coal into China,
for example, would free up prospects for other Asian countries to supply
low-calorific-value, inexpensive coal. Similarly, while Indonesia will continue
in the next 10 to 15 years to be the primary source of imported coal for
India's power players, other markets are developing as long-term strategic
alternatives, including South Africa, Australia, and the United States. It is
also a smart decision to set priorities for continual updating and continuous
promotion, development, and encouragement for the purchase of goods and services
with good practice codes.
In deciding on the best coal mix to feed into the boilers,
most Indian power plants that use multi-source coal face a challenge. It can be
a challenging process to arrive at the most cost-effective and operationally
efficient blend that needs the correct collection of instruments and the
appropriate execution of blend trials. All possible cost elements (direct and
indirect), including the effect of a blend adjustment on performance, are
analyzed by a good analytical model. Kearney developed a model that explores
considerations such as the cost of coal per tonne by grade, the performance of
the boiler at each input (gross calorific value and overall humidity), and
other indirect costs, including the removal of ash and improvements in
auxiliary usage. Trials can supplement the study by supplying the model with
realistic inputs, stress-testing main nodes and conclusions, and understanding
the necessary organizational improvements. Figure 3 illustrates our preferred
three-step strategy for arriving at the optimum blend: preparation,
implementation, review.
Usually, the emphasis in India's coal yards is on timely
distribution to the downstream node (for instance, distribution to bunkers) and
timely discharge of coal at the yard. Other critical aspects, such as proper
yard arrangement that makes first-in, first-out (FIFO) operations and optimum
use of the equipment and usable yard area, are also taken into account by these
practices. In addition, attempts to regulate spontaneous combustion, the key
cause for failure of GCV, are largely retroactive, not well-planned, and marred
by myths about procedures of combustion regulate.
The first step in adopting FIFO strategies and resolving GCV
losses is to identify the correct configuration of the yard. This includes
considering the quantity of each grade of coal used, the retention duration of a product, and the optimal usage of facilities. Help for this comes from a tracking
method for coal pile age that tracks the stack-wise age of coal and encourages
FIFO events, providing advice on which stack to use for distribution and when
to stack new coal.
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