A dip in the coal production by India’s top producer, Coal India, is all set to bring down the capacity utilisation of power projects, across the country, a power ministry official said.
“Coal India may have a slightly flat or even a negative growth. We will have to do with less,” said G B Pradhan, special secretary in the ministry of power.
Pradhan also said while National Thermal Power Corporation (NTPC) might be able to maintain its target plant load factors (PLFs) at 85-87 per cent, new capacities which will be set-up by private sector might face a dearth of coal.
“The initial plant load factors of private sector power plants could be as low as 50-60 per cent,” said Pradhan. The average plant load factors across the country for the financial year are expected to be around 75 per cent.
The power ministry is also undertaking an extensive review of both case one and case two bid documents. Some of the issues which will addressed for future projects and agreements will address issues like the pass through of fuel cost escalation, which has become an issue for two ultra mega power projects in Mundra and Krishnapatnam. After the Indonesian government indexed its coal sales to international prices, the viability of these bids have undergone a change.
“We will also address issues like the timeline for power purchase agreements. Should they be as long as 25 years?” said Pradhan. The review is expected to be finished within two to three weeks.
COAL WORRIES
Coal India, which has over 80 per cent market share of domestic coal, has taken production cuts due to various issues including insurgency, rains as well as transportation issues.
Sriprakash Jaiswal, Union coal minister also said Coal India had not been able to increase its capacity as per its target. “We have set high targets for ourselves. Considering the problems we have been having, it is praiseworthy that we are able to stabilise production” he told reporters at an industry conference.
Coal India’s production grew by around seven per cent in 2010-11.
While its production growth might remain flat for the current financial year which is 2011-12, the minister said he expected the company to increase its production by around seven per cent in 2012-13.
