To meet latest govt order, CIL needs 30 mt extra coal

In what may increase the pressure on Coal India to augment its production, the government has told the company to meet the fuel needs of about 10,000 MW of captive power projects, in addition to the 78,000 MW of generation capacity for which it had earlier signed fuel supply agreements (FSAs).

These captive power projects (CPPs) are either already commissioned or are getting commissioned by March 2015.

The new fiat would require CIL to mobilise an additional 30 million tonne (mt) of coal and possibly, divert coal from its lucrative e-auction platform, sources said. CIL, though, would not need to meet any linkage needs of CPPs to be be commissioned after March, 2015.

CIL is already mandated under a presidential order and FSAs to meet fuel needs of 78,000 MW of independent power projects coming up till March 2015. This means the company will have to mobilise additional 182 MT of coal. In addition, the Cabinet Committee on Economic Affairs (CCEA) has asked CIL to meet fuel needs for another 4,660 MW of power projects that do have any linkage commitments.

The 10,000-MW of captive power projects would be in addition to all these consumer categories. CPPs were last granted coal linkage in January 2010. According to the power ministry, an estimated 13, 000 MW of captive power generating capacity was slated for construction by various industries till the end of 12th plan.

?An inter-ministerial group looking at the issue of providing fuel linkage for captive power projects of cement, steel and other industrial units wants CIL to offer linkage to this segment on the lines of 4660 MW of unlinked power projects. This should, however, be done after meeting the commitments for IPPs,? said a government official, privy to the development.

The power ministry has already suggested to the IMG that linkage to CPPs should be considered up to March 2015 and after the cut off date, there should not be any consideration for linkage to CPPs, which should be notified as a policy.

?We are yet to hear about this decision (to allow coal linkage for CPPs). But if this is suggested, we could sign non-binding MoUs for coal supplies on an annual basis even with CPPs. An offer for such MoU has already been made to unlinked power projects,? said a CIL official.

CIL is expected to produce 475 MT of coal in 2013-14 and close to 392 MT would be available to the power sector. With previous commitments, this leaves CIL with only about 104 MT for new projects.