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Coal shortage may hit power

Acute shortage of coal in the country is likely to derail the ambitious power capacity addition targets of 90,000 mw to the current 100,000 mw in the upcoming 12th Plan Period (2012-17), the Confederation of India Industry (CII) has said.

business Updated: Jul 24, 2011 21:58 IST
HT Correspondent

Acute shortage of coal in the country is likely to derail the ambitious power capacity addition targets of 90,000 mw to the current 100,000 mw in the upcoming 12th Plan Period (2012-17), the Confederation of India Industry (CII) has said.

Coal India Ltd (CIL), which is also the world’s largest producer of the mineral, has scaled down its production targets for 2011-12 to 452.0 million tonnes (MT) from the targeted 460.5 MT in 2010-11.

Moreover, during 2010-11, against the target of 460.5 MT, only 431.3 MT was produced due to a delay in getting forest clearances, non-completion of contracts due to litigations and law and order problems in areas.

Compounding the issue, the industry chamber said that CIL has not signed fuel supply agreements (FSAs) and is unable to commit delivery of coal conforming to the sanctioned linkage quantity for the last two years. Consequently, lenders are reluctant to fund new projects.

“With the power ministry estimating that about 17,000 MW of new and upcoming projects not likely to start operations and 5,593 MW of plants likely to generate only 42% of their actual output due to fuel shortages, the Indian power industry is clearly witnessing a crisis,” the CII said.

“Power shortages due to lack of coal may impact the industry severely unless these issues get addressed,” said Chandrajit Banerjee, director-general, CII.

"Clearly, the Indian government and the coal and power industries will collectively need to take action to mitigate the impending power crisis in the country as coal is expected to remain the mainstay of power production in the country in the foreseeable future," said Anil Sardana, chairman, CII national committee on power, and managing director, Tata Power Company Ltd." http://www.hindustantimes.com/Images/HTEditImages/Images/25_07_11_buss22a.jpg