With coal crisis hitting power plants acutely, Coal India Limited ( CIL) is planning to raise the 'trigger level' or the minimum level of coal supply to them by 15 per cent from the current 60 per cent to 75 per cent and also bring about amendments in fuel supply agreements ( FSA) norms kept in the new coal distribution policy ( NCDP).
Under rules, if CIL fails to maintain the 75 per cent trigger level supply to power plants it will face a penalty. Power plants across the country are demanding that CIL will have to maintain a 90 per cent trigger level. Low coal supply has pushed 56 of the 77 power plants to the 'critical' category and rendered another 33 plants 'super critical' with stocks of less than seven and four days respectively.
“It is true there is pressure from power plants to raise the trigger level to 90 per cent. But that is not possible. At the most it can be raised to 75 per cent after jointly computing the annual contract quantity (ACQ) and trigger level. For this we will give suggestions to the ministry for making amendments in NCDP", said CIL chairman, Partha S Bhattacharya.
NTPC and various states like Maharashtra and Andhra Pradesh have made appeals to the coal ministry to resolve FSA and e-auction issues as stocks in power plants are depleting by the day. The central and state power utilities are firm on not signing FSAs until CIL assures 90 per cent committed supply. NCDP ensures 100 per cent supply to the core sector identified as power and fertiliser units. The tenure of FSAs for new projects should be 25 years considering the useful life of the power plant. The power purchase agreements ( PPAs) will be of a similar tenure. The need for FSAs is to fix supply targets by CIL subsidiaries. Highly-placed CIL officials, however, alleged that the power plants are putting pressure to end the system of coal sale through e-auction as they have to pick up the material at a higher price compared to the administered prices under normal conditions. CIL supplies around 40 million tonne of coal through e-auction. The power plants, which aim to pick up this amount through the normal roue, feel the system only benefits the non-core sector. Currently, CIL is confronted with an acute coal crisis of around 200 million tonne during the 11th plan period and is, therefore, planning an import of the amount at around Rs 18,000 crore ( at current international coal prices). While the target at the end of the 11th Plan is 530 million tonnes the demand is around 720 million with a possibility of peaking further.
Efforts are on to augment underground ( UG) coal production to the maximum through the development of seven UG mines spread out in the coalfields of ECL, BCCL and CCL to meet domestic requirements. CIL has also called in for bids to develop its 18 abandoned mines with private sector players. Says Bhattacharya, " I want to zero in on the final player for development of the abandoned mines by March 31 2009".
