Ongoing coal supply problems depress Indian generation

• 11 years ago (2012-06-09)
• Junior Isles

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Coal India Ltd (CIL) has said that ongoing coal shortages mean it can supply only 60 per cent of the required output, below its mandatory 80 per cent commitment. The shortage puts extra pressure on power companies that are already operating at half capacity and this development is likely to mean further power outages and inconvenience for Indian consumers.

A senior National Thermal Power Corporation (NTPC) official has also said that the lack of coal will adversely impact its power generation further.

The Indian power ministry has insisted on a minimum supply level of 65 per cent if CIL cannot meet the mandated commitment of 80 per cent.

"At least 65 per cent (supply) should be there failing which Coal India should be penalised... and it should ramp it up to 80 per cent in the next four years," the official said.

These additional power problems are poorly timed with the Indian economy already slowing and the manufacturing sector having shrunk during the January-March quarter.

CIL may opt for expensive coal imports to offset the shortfall and avoid government penalties for failing in its commitments.

A presidential directive makes it mandatory for Coal India to provide the minimum supply of coal to power plants.

The output of the Maharatna firm has been stagnant in recent years, often attributed to environmental restrictions.

Last year CIL’s production was 431 million tonnes, with current production at 436 million tonnes. There are plans to enhance this to 464 million tonnes by the end of the 2012-13 financial year.

Some 347 million tonnes of CIL coal is currently earmarked for the power sector.