Power firms refrain from asking CIL to import coal

Written by Indronil Roychowdhury | Kolkata | Updated: Aug 23 2013, 06:32am hrs
The Union power ministry has asked 36 power plants to go for direct coal imports, without depending much on Coal India (CIL) and Singareni Collieries as neither company would be able to stretch production beyond the quantity assured for supplies in FY 14.

A Central Electricity Authority (CEA) official told Fe the import requirement of the power sector in FY14 has been estimated at 82 million tonne, with demand for the year estimated at 516 mt. The coal ministry has assured supplies of 441 mt from CIL, Singareni and captive sources, inclusive of CILs LoA (letter of assurance) and trigger-level obligations.

CIL has been asked to meet its 80% trigger level with 65% domestic supplies and 15% imports. CIL chairman and managing director S Narsing Rao is, however, confident the company would be able to meet the 80% trigger level from domestic supplies. So, it doesnt have to go for imports for its own needs.

But if a company asks for imported coal within its LoA quantity and within the trigger-level threshold, CIL would supply imported coal to it. However, so far, no company has asked CIL to import, Rao told Fe.

Power companies such as NTPC, DVC and West Bengal Power Development Corporation have been importing on their own to meet their requirements, which go beyond the amount that CIL can supply.

NTPCs FY14 import target is 17 mt even as CIL is likely to meet its entire commitment. NTPC s requirement in FY13 was 164 mt, of which CIL supplied 132.7 mt, achieving 104% of its targeted supplies.

However, 27 of the 36 power plants that have been asked to import 50 mt have boilers designed for domestic coal, and the rest have boilers for foreign coal. If boilers designed for domestic coal are fired with foreign coal, they are unlikely to function efficiently.

A CEA official said imports have been estimated to cost around $66 billion. Minister of state for power, Jyotiraditya Scindia, has already informed Parliament about it. But the country would not be able to do without imports.