India to import coal for power generation

• 11 years ago (2012-07-28)
• David Flin

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The Power Ministry and the Coal Ministry of the Indian government is reported to be considering asking Coal India Limited (CIL) to import coal to meet the growing domestic demand and adopt pool pricing of international and indigenous coal for supplying to power companies.

The Coal Ministry said in a letter to CIL that: “In the interest of growth of the economy and to increase power generation, efforts are needed to make adequate coal available.” The Power Ministry said: “In this regard, the Central Electricity Authority needs to prepare a detailed operational plan in consultation with Coal India, Railways, and Port Authorities.”

The pool pricing mechanism of coal may be decided by CIL. Power generation companies are battling with fuel shortage due to reduced and erratic supply from CIL.

Earlier, the Prime Minister’s Office had directed CIL to enter into fuel supply agreements with power producers for committed supply. The PMO is believed to have asked CIL to assure power firms of providing 65 percent of the total coal contracted. The Power Ministry has also suggested that “considering the constraints in ramping up production and arranging import in the first two years of the 12th Plan, the penalties for supplies 65-80 percent for 2012-13, and 75-80 percent for 2013-14 may be suitably relaxed.”