Fuel for power in PM’s crosshairs
With the paucity of key fuels threatening to jeopardise power generation from existing plants and derail the scheduled commissioning of upcoming units, Prime Minister Manmohan Singh is set to send a strong signal to the ministries of petroleum, power and coal to take preemptive measures to salvage the situation.
As Singh meets heads of leading power companies including Ratan Tata and Anil Ambani here on Wednesday, the policy direction is clear: Persuade states to renegotiate power purchase agreements for some major ultra mega power projects (UMPPs) given the rise in fuel costs and step up coal imports substantially through Coal India (CIL).
Electricity generation has been growing at rates higher than the overall industrial output in recent months, (it grew 14.6% in November and 5.5% in October) but successive months of decline in coal production and the sharp drop in the Reliance Industries’ KG-D6 gas output have made power companies jittery. The companies are vying for assured fuel linkages at prices that don’t upset their calculations after entering into power purchase agreements with states, their main consumers.
According to official sources, Singh will ask the ministries concerned to consider various policy options to augment coal supply. According to the Planning Commission’s projection, the country’s dependence on imported coal could go up to 238 million tonnes by 2016-17 as against 42 mt in 2010-11due to the fall in CIL’s production. Addressing the managerial inefficiencies which have impacted CIL’s output is one solution.
But at the same time, the Prime Minister also wants CIL to be
