Govt may freeze power capacity to be supplied with coal in 12th Plan

  • The Coal Ministry is likely to fix a cap on the power capacity beyond which it would not supply coal during the 12th Plan (2012-17) due to scarcity of the fossil fuel.
  • The ministry feels there is a need for freezing the capacity of power projects to be supplied coal by Coal India (CIL) during the upcoming Plan period. The matter is likely to come up for discussion in a meeting of the Standing Linkage Committee to be held in second week of feb.
  • The development comes in the wake of the Committee of Secretaries constituted by Prime Minister Manmohan Singh recently deciding that CIL would be penalised it if does not supply fuel at an 80 pecent "trigger" level.
  • Earlier, the Planning Commission had asked CIL to sign pacts (Fuel Supply Agreements) with power firms to ensure sufficient supply of dry fuel even if the coal miner has to import it.
  • A Fuel Supply Agreement (FSA) is a document that contains provisions for incentives for meeting commitments and penalties in case of failure.
  • Power Minister Sushilkumar Shinde had earlier emphasised on the need to ensure adequate availability of coal in the current fiscal as well as during the 12th Plan (2012-17). He had stated that CIL is at present not willing to sign FSAs assuring a high enough percentage of coal will be delivered.
  • The Planning Commission had earlier said it is likely fix a target for about 1,00,000 MW of capacity addition in the power sector in the 12th Plan (2012-17).
  • The demand-supply gap for coal, which stood at 84 million tonnes (MT) last fiscal, is likely to touch 142 MT in the current financial year.
  • CIL, which accounts for over 80 per cent of domestic coal production, has scaled down its production target for the current fiscal to 440 MT from 452 MT.
  • The public sector firm missed its production target last fiscal and produced 431.325 MT of coal against the revised target of 440.20 MT.
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