Coal Minister Sriprakash Jaiswal has asked his Power Ministry counterpart Sushilkumar Shinde to freeze the capacity of coal-based power projects at 63,450 mega watt and desist from pushing fresh projects for new linkages in the next five years.
In a January 20 letter,Jaiswal said Coal India Limited (CIL) and its subsidiaries have so far issued 171 Letters of Assurance (LoAs) for ensuring fuel supply to power projects for a total capacity of 96,178 MW. He has categorically stated his inability to supply more than 450 Million Tonne over the next five years till 2016-17,the last year of the Twelfth Plan that begins next year.
CIL is already struggling to maintain supplies by resorting to supply of 50 per cent of the normative requirement of the power projects,and the balance through imports. Jaiswal said CIL’s efforts to secure imports have met with limited success since exporters are not keen to supply through long term contracts.
Against the Cabinet secretariats move to secure fuel supply beyond 50 per cent,the coal ministry has taken a tentative view to reduce the contracted quantity of projects already commissioned to 90 per cent and supply the rest to other coal-starved utilities. This means that power utilities commissioned before March 31,2009 too may face rationed supply.
Out of 96,178 MW capacity for which LoAs have been issued,only 65,450 MW is expected to go on stream by 2016-17 end and the balance 30,728 MW is unlikely to fructify,Jaiswal said citing the Central Electricity Authority (CEA) projection.
“So unless this projected capacity of 65,450 is frozen,it would be difficult for the coal firms to plan production,dispatch and related activities and sign Fuel Supply Agreements accordingly. If any of the 30,728 MW come up during the 12th Plan and coal is to be supplied to them also,the entire exercise will become meaningless. I request you to advise concerned authorities to finalise the list and freeze it,” Jaiswal said.
Meanwhile,the Prime Minister’s Office today reviewed the progress in streamlining coal supply in a meeting with key functionaries from the coal,power and commerce ministries. The broad consensus was on pegging the trigger level (minimum supplies against assurance given by CIL) at 80 per cent. The PMO is likely to call for another meeting next week to take a final call on the fresh measures to improve supplies.