Coal shortages likely to hurt power sector
Agencies

Posted: Sunday, Jul 24, 2011
Tags: Coal Shortages | Confederation Of Indian Industrie | CII
New Delhi: Acute coal shortage could adversely impact the fast-growing power sector, which is expected to see a capacity addition of up to 1,00,000 MW during the 2012-17 period, according to industry body CII.

The Confederation of Indian Industries (CII) has also suggested various measures to improve overall coal production in the country, including fast-track clearances for coal mining projects through a single-window inter-ministerial body.

During the 12th five-year plan period (2012-17), a capacity addition of up to 1,00,000 MW is expected whereas many power projects are grappling with coal supply issues.

"Power shortages due to lack of coal may impact the Industry severely unless these issues get addressed," CII Director General Chandrajit Banerjee said in a statement.

Domestic coal production is being hit by delay various factors including forest clearances and law and order problems in some mining areas.

CIL has not signed fuel supply agreements and is unable to commit delivery of coal conforming to the sanctioned linkage quantity for the last two years.

Consequently, lenders are reluctant to fund new projects which are on the anvil, according to the statement.

"The Indian government and the coal and power industries will collectively need to take action to mitigate impending power crisis in the country as coal is expected to remain the mainstay of power production in the country in the foreseeable future," CII National Committee on Power's Chairman and Tata Power Managing Director Anil Sardana said in a statement.

Among others, CII has suggested rationalisation of existing coal linkages as well as having a single-window inter-ministerial body for fast-track clearances of coal mining projects.

The industry body has also called for an independent coal regulator to oversee mine planning and development, compliance with production schedule, among others.