Report on Fuel Accounting for Tata Power Ltd, Jojobera, Jamshedpur

“Report on Fuel Accounting for TATA Power Ltd, Jojobera, Jamshedpur”

Summer Intern Project report submitted in partial fulfilment of the requirements for the degree of Master of Business Administration

By

Sandeep Kaur

Reg. no 1527057

Under Supervision of

Dr. Anirban Ghatak

Professor

Institute of Management Christ University, Bangalore

Duration: 13th April to 28th May 2016

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        Christ University Institute of Management

2016

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DECLARATION

I hereby declare that the Summer Intern Project report entitled “Report on Fuel Accounting for TATA Power, Jojobera, Jamshedpur” has been undertaken by me for the award of Master of Business Administration. I have completed this study under the guidance of Dr. Anirban Ghatak.

I also declare that this Summer Intern Project report has not been submitted for the award of any degree, Diploma, Associate ship, Fellowship or any other title, in Christ University or in any other University.

         Sandeep Kaur

Place: Jamshedpur, Jharkhand                                                                   ----------------------        

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CERTIFICATE

This is to certify that the Summer Intern Project report submitted by Sandeep Kaur on the title “Report on Fuel Accounting for TATA Power, Jojobera, Jamshedpur” is a record of summer intern project work done by him/ her during the academic year 2015-2016 under my guidance and supervision in partial fulfilment of Master of Business Administration.

Place: Jamshedpur                                        Signature of the Guide

Date:                                                        Dr. Anirban Ghatak

                                                        Professor

                                                        Institute of Management

                                                        Christ University

                                                        Bangalore

Acknowledgement

As a part of curriculum at Institute of Management Christ University, the “Summer Internship Program” aims at overall development of the student by providing them an opportunity to gain corporate exposure and space to apply their knowledge in practice in a mutually beneficial manner. No summer internship can be successful without the support of the people who keep themselves closely involves with the student undergone the program. The wealth of knowledge and guidance shared and provided by these professional is invaluable.

I have given my all dedication to this project and have been able to manage all of the things as professional. However, it would not have been possible without the kind support and help of many individuals from industry and organizations. I would like to extend my gratitude to all of them.

I would like to express my gratitude toward my Faculty guide Dr. Anirban Ghatak (Professor Finance) and also Father Thomas (Director for MBA, Christ University) for their kind co-operation and encouragement which help me in completion of this project.

I would like to express my gratitude to my organisational guides Mr Anshuk De (Head Accounts, Tata Power, Jojobera); Mr CP Jain (Accounts Dept., Tata Power, Jojobera) and all members of the accounts department for their guidance and constant supervision even though they have their own work they gave their time and attention in providing necessary information regarding the project. It was a privilege to work at Tata power, Jojobera Plant under their supervision.

Executive Summary

This report provides information on “how fuel is accounted for in the Jojobera plant located at Jamshedpur, East Singhbum district”. Tata Power Jojobera plant is a thermal power plant i.e. it burns coal and oil to produce electricity. Coal is the primary fuel and light diesel oil (LDO) being the secondary fuel and used in case of non-availability of coal. It has an installed capacity of 667.5 MV (1* 67.5 MV; 5* 120 MV).

The primary role of Tata Power Jojobera Plant is to make available electricity to Tata Iron and Steel Company (TISCO) which is also located in Jamshedpur. Tata Power is solely responsible for uninterrupted supply of electricity to TISCO at affordable rates. The companies have a Power Purchasing Agreement (PPA) for 2 units, 2 are regulated by JSERC and the other 2 are owned by IEL a separate company where Tata Power is the holding company.

The report will deal with only 4 units i.e. Units 1, 2, 3 & 4 that are under direct control of Tata Power.

The report has been divided into 4 chapters. The first chapter gives a brief introduction of the company and a summary of the generation units inside the plant premises. The second chapter discusses the objective and scope of the study and the methodology used. The third chapter deals with the fuel cycle of coal and is the most important chapter. This chapter is further divided into 3 parts sourcing, consumption and disposal.

The fourth chapter of the report includes suggestions to improve the efficiency of the plant by trying to reduce the fuel usage based on the observations and findings of the report.

Table of Contents

Chapter 1 – Introduction..…………………………………………………………………...1

1. Historical Perspective ……………..………………………………………………………1

1.2 Summary of Unit 1 to Unit 6 …..………………………………………………………….2

1. Unit 1 & Unit 4 …..………………………………………………………………….2
2. Unit 2 & Unit 3 ……………………………………..……………………………….3
3. Unit 5 & Unit 6……………………….…………….………………………………..5

Chapter 2 – Fuel Types & Quality………..…………………………………………………6

2.1 Types of Fuel Used………………………………………………………………………..6

1. Coal ……………..…………….…………………………………………………….6
2. Quality of Coal………………………………………………………………………6
3. Grades of Non Coking Coal…………………………………………………………7

2.2 LDO/HSD..………………………………………………………………………………...9

Chapter 3 – Fuel Cycle……………………………………………………………………...10

3.1 Sourcing………………………………………………………………………………….10

1. Sources of Coal...…………………………………………………………………..10
2. Transit Loss of Coal………………………………………………………………..10

3.2 Consumption……………………………………………………………………………..12

1. Capacity Payment……………………………………………….………………..12
2. Third Party Sales……………………………………………….………………...13
3. Operation procedure and performance test………………………….…………...13
4. Delivery of Energy and Measurement of Availability………...………….……...14
5. Adjustment to the PLF due to the Purchaser……………………………….…….14
6. Actual Gross Electrical Output………………………………………….……….14
7. Capacity Payment Components………………………………………….………15
8. Return on Equity (ROE)…………………………………………………….……19
9. Incentive Computation……………...……………………………………….…...19
10. Energy Payment………………………………………………………………….20

3.3 Billing and Payment……………………………………………………………………...21

1. Payment obligation……………………………………………………………….21
2. Billing…………………………………………………………………………….21
3. Invoice Disputes………………………………………………………………….21
4. Timely Payments…………………………………………………………………22
5. No Set – Off……………………………………………………………………...22

3.4 Utilization and Disposal…...……………………………………………………………..23