Sluggish coal sector to dampen power generation

Submitted by VK Gupta on Sat, 19/01/2013 - 5:48am

Sluggish coal sector to dampen power generation

The sluggish coal sector will continue to dampen the thermal power generation this year also because of gap between coal demand and supply.
The demand supply gap for domestic coal has been increasing rapidly. In 2011-12, installed coal based thermal plants capacity increased by about 19.3 % while domestic coal production went up by just over 1.4%. In the current financial year more than 10000 MW thermal capacity additions is expected. Moreover coal linkages given to power plants are well in excess of possible increases in coal production.
The root cause of the current problem is that much more coal has been promised to consumers than is realistically possible for CIL to supply. Importing coal to meet the shortfall and pooling prices is a suggestion that has been mooted to address this problem. This is the main reason for the spurt in coal based thermal power capacity without corresponding increase in coal production – leading to the current supply shortage.
Coal demand has increased significantly with the commissioning of new coal-fired thermal plants in the country. Given India's chronic power deficit, this trend is likely to continue. A lower-than-expected increase in domestic coal production, particularly due to delays in the development of captive coal blocks allocated to the power generators, has added to the demand-supply gap
The current imbroglio over the coal crunch began in 2009, when Coal India Ltd (CIL), monopoly supplier of the fuel refused to sign fuel supply agreements for new power projects, citing constrained output. Under pressure from the Government, however, it started supplying coal to meet half the demand from projects where letters of assurance had been signed.
Now Fuel Supply Agreement with a trigger level of 80% (65% domestic and 15% imported coal) would result in coal availability to the extent of 68% plant load factor leaving a gap of 17% to be bridged through import to meet the normative availability of 85%.The upcoming Talwandi Sabo, Goindwal Sahib and Rajpura thermal plants in Punjab which are scheduled to be commissioned in next financial year will also face coal shortage problem.
Even today there are 24 thermal plants in the country which have less than 4 days coal stock. Another 8 thermal plants have less than a week stock. The main reason for this is short supply by CIL or its subsidiaries.
On the other hand CIL partially blames Railways for unending supply problems for its thermal power project in northern region. This happened due to lack of railway rakes for loading and incomplete rail linkages. CIL claims that they ensure at least 75 per cent coal availability to all power stations in the region.

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