Limited availability of coal could trip mega power plans in India

Thursday, 03 Mar 2011 By ET

An acute shortage of domestic coal is threatening to destabilize new power generation projects in which developers have already invested an estimated INR 75,000 crore.

A senior official with the power ministry told ET that "New capacity of about 15,000 MW is likely to be stranded for want of coal. This capacity is enough to light up three states bigger than Delhi.”

Coal India Limited had promised to supply 92 million tonnes of fuel to these projects, most of which were expected to be operational over the next one year. But the state run firm now says it can deliver only 13 million tonnes. The available coal, which needs to be blended with imported coal before it is ready for use by generating companies, could produce barely 3,000 MW of power.

The official added that "Coal India has indicated that availability for power utilities is likely to be 319 million tonnes only. Of this, fuel supply agreements have already been signed for 306 million tonnes generating units commissioned up to March 31st 2009.”

The official added that "There is coal available at pit head locations, which is not being mined out due to inefficiency of Coal India and its subsidiaries.”

Power project developers on Tuesday called on the Central Electricity Authority to raise their concerns over the fuel supply issue but the authority said it could not do much.

A CEA official said that "We are helpless as Coal India has indicated that there is no coal for new projects.”

The coal ministry official said CIL production would not improve unless the environment ministry clears the hurdles for mining projects. He said more than 150 mining projects of Coal India are awaiting clearance from the environment ministry. These projects have a coal production potential of 210 million tonnes.

Experts say importing coal will also not solve the problem for new projects as there is a limit to which Indian boilers can use imported coal.

Imported coal has higher heat value as compared with domestic coal and it is believed that it also corrodes boiler parts and emits more smoke when used in Indian boilers over longer period.