Power companies' fuel crunch to continue

Power Secretary RV Shahi today said the crunch in coal and gas experienced by power companies was likely to continue for another two-three years though coal imports were projected to rise from the estimated 14 million tonnes this year to 20 million tonnes during 2006-07.

"The shortages are likely to continue through 2006-07 and 2007-08. By 2008-09, we think the situation will improve," he said at a seminar on strategies for mitigating the fuel crisis, organised by the Confederation of Indian Industry.

National Thermal Power Corporation (NTPC) Ltd will start captive coal production by July next year, Shahi said, adding that the company was already importing 4 million tonnes of coal to tide over shortages from domestic sources.

The company, which was awarded a captive coal block in Jharkhand last December, will eventually produce 10 million tonnes of coal per year. Production will start from July 2007.

Besides imports, domestic production would also have to be stepped up, Shahi said.

Shahi said there were about 24 coal projects which were linked to various power projects in the 10th Five-Year Plan, but only six had received all clearances. The process had now been expedited. The remaining projects would be cleared shortly, he added.

Power companies were also facing acute gas shortage with many stations running at a 60 per cent plant load factor (PLF), which was less than the national average of over 75 per cent PLF, Shahi said.

The current gas production is about 90 million standard cubic meters per day and the shortage is to the tune of 18 mscmd. ONGC, the country's largest oil and gas producer, had a total production of about 63 mscmd at present, a level which was likely to remain stagnant till 2011-12, he said.

By 2008-09, however, other private and joint venture firms that had struck gas in recent times would start producing about 40-45 mscmd, he added.