August 28, 2008

Thermal units set to get less coal supplies

BL reported that, in an unprecedented move, union ministry of coal has reduced monthly coal allocation to the power sector for the April to June 2008 quarter, raising the possibility of a severe power crisis during the ensuing summer.

As per report, Standing Linkage Committee in the ministry of coal has brought down the amount of coal to be given to the thermal power plants during the summer months even though coal based power generation is expected to go up by 12.2% during April to June 2008 quarter.

Alarmed over the situation, Central Electricity Authority has written to the coal ministry to increase allocation to power plants to avoid a crisis situation. Reminding the coal ministry of its earlier promise of providing additional coal to the power plants during the first quarter, the CEA, in a letter to the coal ministry, has said that “We were given the impression that there is a stock of around 46 million tonnes at the mines, which is more than the norms. Coal companies and the ministry of coal were in agreement to supply around 8 to 10 million tonnes additional coal during the quarter."

CEA has also pointed out that in case of Coal India Limited and Singareni Collieries, the quantum they have to supply to the power sector is lower than what they gave last year. On the other hand, allocations from captive mines have been increased substantially, which they may not be able to fulfill.

Taking a note of ground realities that the proposed amount had not been made available in the past year, CEA states that "The materialization in the past has been hovering around 90%. Therefore with the proposed linkage of 31.374 million tonne, actual receipt will be of the order of 28.24 million tonnes only."

CEA’s requirement for coal generation per month is estimated at 30.40 million tonnes and another 4 million tonnes for stock build up while another 0.54 million tonnes is estimated as standard transit loss. This totals to 34.94 million tonnes per month as against SLC’s proposed monthly linkage of 31.374 million tonnes. Stating that stocks at the power stations are already low at around 10 million tonnes against the normative condition of 22 million tonnes, CEA has urged the coal ministry to allocate 34.7 million tonnes per month by increasing the linkage by 3.33 million tonnes.

	Apr-Jun 2007-'08	Apr-Jun 2008-'09	Change
CIL	27.304	27.098	-0.75%
SCCL	2.755	2.231	-19.02%
Captive mines	0.654	1.080	65.14%
Import	0.917	0.965	5.23%
Total	31.630	31.374	-0.81%

In million tonnes

Coal ministry officials, however, are of the opinion that in case of any shortage, the power companies can always import under the open general license.