Of the 92 major power projects reviewed by the Central Electricity Authority (CEA) for their fuel position, 54 are facing ?acute coal shortage?, which is resulting in inadequate power supply/blackouts in various parts of the country, crippling of industrial output and impact on households.
Blame this not only on the stagnation in India?s coal output and a widening demand-supply gap for the fuel, but also on the Centre?s standing linkage committees (SLCs).
According to sources, three SLCs on power have met only once this fiscal (in January), while these and the other two SLCs (for cement and sponge iron industries) are supposed to meet at least twice every quarter to review the demands of existing linked consumers and provide linkages to new projects.
At its January meeting, which took up cases of a host of existing power plants fighting acute coal shortages, no new projects were taken up for review. This explains the delays in execution of new projects in the sector, crucial to revving up the economic growth engine.
?There is an increasing trend in the cement and sponge iron sectors of using illegal coal, since the linkage committees are not reviewing their demand for coal and providing linkages,? a coal ministry official said.
The coal ministry has asked the SLC on power to take initiative for giving long-term linkages since a number of new power projects are in the line-up with letters of assurance. Supplies from Coal India increased 11% year-on-year in the first nine months of FY 13.
According to RP Sanjiv-Goenka Group chairman Sanjiv Goenka, the CESC alone has four projects stuck in Jharkhand, Bihar, Orissa and West Bengal for want of coal linkage. A CEA official said of the 54 power plants that are fighting acute coal shortage for a long time, 35 have coal stock for less than seven days and 19 plants have stock for less than four days.
Lack of self regulation and reduction in coal imports are the prime reasons why the existing power plants have fallen under critical coal stock shortage. But unless the linkage committee reviews the requirement, addressing such issues becomes a problem, the ministry official said.
The linkage committee has been holding back new linkages since the power plants set up after March 2009 are supposed to come under fuel supply agreement (FSA). But out of the 175 pending FSAs, only 55 have so far been signed. The NTPC has said the provisions of the newly formulated FSA have not gone down well with power producers. CIL chairman S Narsing Rao has made it clear the company was no more certain about the timeline of signing FSAs and it had no trouble in supplying coal to the power producers under a memorandum of agreement. ?The agreement doesn?t have any penalty clause for either of the parties, so there is no pressing need for the CIL to force an FSA with NTPC,? Rao said. But FSAs should be made enforceable since it has been made to regulate supplies, he added.
The coal ministry, however, has asked the CIL to ask its subsidiaries to commence executing the signed FSAs and not wait for all the parties to complete signing.