Millennium Post

‘Coal India cannot meet all demand till 13th Plan’

National mining company Coal India Ltd (CIL) cannot meet the complete coal demand from indigenous sources till the 13th Five Year Plan (2017-21) period, CIL Chairman S Narsingh Rao said on Monday. The is despite Coal India Ltd’s production growing at 8-9 per cent, Rao said at the Coal Summit organised here by the India Energy Forum.  ‘We need to supply coal to an additional 90,000 mw capacity over the 306 million tonnes (mt) supplied to thermal electricity generation plants currently,’ Rao said.

During the 12th Five Year Plan (2012-16), India would face a supply gap of 185 million tonnes. Coal production by the final year of the 12th Plan is likely to touch 795 million tonnes, after an incremental production of 255 mt compared to the 11th Five Year Plan.

During the 11th Plan, there was a production gap of 140 mt. ‘Environmental and technical issues need to be addressed,’ Rao pointed out. Coal Secretary S K Srivastava said that the Power Ministry is currently preparing a proposal on price pooling for imported coal in consultation with the Central Electricity Authority and CIL. ‘We expect to move forward on that,’ he said.

Price pooling , however, is not part of Coal India Ltd’s fuel supply agreements (FSAs) with power companies, which may not be signed by the 30 November deadline set by the Prime Minister’s Office (PMO), Rao indicated on the sidelines of the conference.

‘The finalised FSA was approved by the CIL board on October 13 and the version posted on our website, as well as circulated to all concerned,’ Rao told mediapersons on the sidelines of the two-day event.

To a query on whether fuel supply to companies would be affected in case FSAs were not inked by the November deadline, Rao replied, ‘This question should be put to them (power utilities that were yet to sign FSAs).’

He clarified that the memorandums of understanding (MoUs) with companies for fuel supply were only an interim arrangement till the end of the year.

‘Our current MoUs (with companies) were extended to 31 December in September itself, from their original validity that was till September 30,’ the CIL chairman said.

Last month the PMO asked power companies to sign fuel supply agreements by November-end even if they don’t have binding accords for sale of electricity.

Even those power producers, who at present have not signed a power purchase agreement (PPA) with any electricity distribution company, can sign the FSA but they will be required to produce the PPAs before lifting coal.  An FSA is an agreement for CIL to supply an annual contracted quantity (ACQ) with penalty trigger, without any price pooling conditions.

On signing the FSAs, CIL is obligated to make up for any domestic shortfall through coal imports.
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