Power cos told to develop coal mines; curbs on supply

Written by Sanjay Jog | Mumbai | Updated: Jan 21 2009, 06:42am hrs
The coal ministry has indicated that the standing linkage committee (short-term) is likely to restrict coal allocation within overall-approved ceiling of 299 million tonne during 2008-09. Also, the ministry has asked state electricity boards (SEBs), power utilities, which have been allotted captive coal blocks, to develop their mines faster in order to become self reliant and hence be able to tackle demand and supply mismatch.

The ministry informed that as per the annual action plan (AAP) targets fixed by the Planning Commission, Coal India (CIL) is required to supply 293 million tonne during 2008-09. Additional 6 million tonne would be considered for supply from CIL sources on "best effort basis." Besides, CIL has initiated action to import of 4 million tonne coal during the current fiscal. The power utilities have been asked to either directly import coal or utilise CIL's services for meeting their imported coal needs.

Informed sources told FE, "The ministry has requested the power ministry and Central Electricity Authority (CEA) to impress upon power utilities to ensure efficient coal utilisation. The ministry hopes that utilities that are yet to sign fuel supply agreements (FSA) with CIL will complete the formalities by January 31the CIL deadline for conclusion of FSAs. Once FSAs are in place, the role of standing linkage committee will have to be redefined. The committee may not deal with quarterly allocations in future.

CIL said it has been able to meet the AAP targets in the third quarter. The supply to power sector during April-November 2008 stood at 189 million tonne, up 6% as compared with corresponding period last year. Had power utilities been able to import as peer target during the first 9 months of the current fiscal, the present coal stock position would have been comfortable, it added. At present, of the 77 coal plants monitored by CEA, 46 plants have coal stock of less than four days and 34 plants have coal stock of less than seven days.

Meanwhile, in Kolkata coal minister Santosh Bagrodia urged power utilities to import coal as a short term measure to tide over the shortage in supplies. He said although there was actually no shortage of coal supplies in the country, power utilities should also import coal for meeting short-term crisis. He said power companies located at pitheads should have a stock for 15 days and those situated far can pile it for 21 days.