(EnergyAsia, November 11 2014, Tuesday) — Utilities representing nearly 95% of India’s 78,000MW of coal-fired power capacity have secured feedstock through supply contracts with state-owned Coal India Limited (CIL), said the Coal Ministry.
But doubts persist as to whether the underachieving CIL will be able to even deliver on the 161 fuel supply agreements to the utilities which control a combined generation capacity of 73,675 MW. As it is, despite pressure from the Coal Ministry and the Cabinet Committee on Economic Affair (CCEA), CIL and the power industry have failed to meet the September 2013 deadline to seal all 172 supply agreements for 78,000MW of India’s coal-fired power capacity.
The Coal Ministry said the company, which accounts for 80% of India’s domestic coal production, has been unable to conclude the agreements with companies that are undergoing ownership restructuring or making their own supply arrangements.
The utilities with existing supply deals with CIL complain they often encounter supply disruptions and problems with the fuel quality of the coal delivered.
According to the Central Electricity Authority (CEA), coal stockpiles at India’s 103 main coal-fired power plants last month plunged to a 25-year low of 7.2 million tonnes, sufficient to meet just several days of consumption. This comprised 6.58 million tonnes of domestically produced coal and 706,000 tonnes of imports.
The Coal Ministry laid the blame on CIL and its subsidiaries for not meeting their production targets. Without sufficient coal supply, more than 60 thermal power stations were forced to sharply reduce operations, contributing to brownouts and power supply disruptions to several major cities across the country.
CIL produced 462 million tonnes in the last fiscal year to March 31 2014, significantly below its target of 482 million tonnes. Analysts doubt the company will achieve its latest production target of 507 million tonnes in the current fiscal year to March 31 2015.