To address the issue of acute coal shortage, the Ministries of Power and Coal will soon hold discussion on supply of the dry fuel to power projects on priority basis.
The Power Ministry has asked the Coal Ministry to provide coal supplies for power projects before going ahead with e-auction, a process where the dry fuel is sold at market price.
"e-auction [of coal] should be resorted to after they [producers] meet the requirement of the power sector," Power Secretary P Uma Shankar said at a Ficci event here today.
Without divulging much details, he said that the Ministries of Power and Coal would meet soon to deliberate on the issue of fuel supplies for power projects.
According to Shankar, Coal Secretary has given assurance that Coal India will be able to spare coal, provided the developer picks the dry fuel directly from the mine.
Around 10% of the total production of Coal India is sold through e-auction.
Domestic coal production has been unable to meet the demand, as a result of which many power project developers are importing coal.
Going by estimates, the Compound Annual Growth Rate (CAGR) of coal supply has been just 4% in the last five years while the demand CAGR rose 7.5% during the same period.
"Coal blocks were given to private developers thinking that they would do a better job than Coal India," Shankar said.
But most of the coal blocks allocated to private companies are yet to be developed, he added.
Ninety eight coal blocks were given, of which only 13 have been developed so far -- that produce 20 million tonnes of coal per annum. While other blocks have not even received preliminary environmental clearances, Shankar said.
Shankar also said that the Ministry of Environment and Forests (MoEF) has given in-principle approval to exempt power transmission lines from getting clearance under the Forest Regulatory Act (FRA).
