The government may assure a year's fuel supply to power projects stuck for want of forest clearance to attached coal blocks, a move that will benefit 8 power plants with a total capacity of over 12,000 mw.
The matter will be decided on Monday, when the coal ministry meets to review long-term linkages to power utilities, a government official said requesting anonymity.Power generation capacity in India is around 1.72 lakh mw, with a peak-hour deficit of around 11%. Coal supplies to the power sector fell 10% to 303 million tonnes during 2010-11, against the targeted 335 million tonnes. State-run Coal India Ltd has lowered its production target for 2011-12 to 454 million tonnes from 461.5 million tonnes in 2010-11, due to forest clearance related issues.
Eight power plants are in an advanced stage of completion, but are awaiting forest clearance to attached coal blocks.According to the power ministry, coal shortage is likely to hold up new power projects of over 17,000 mw aggregate capacity, and prevent plants commissioned in 2009-10 with total generation capacity of 5,593 mw from operating above 42%.
The coal ministry at present gives short-term linkages to companies that have cited valid reasons for not having synchronised development of coal blocks with end use plants.Short-term supply, also called tapering linkage, is given at 75%, 50% and 25% of the requirement for the first, second and third year of operation.
"The standing committee for recommending long-term linkages would take a view on what should be the procedure to regulate cases where project developers achieve all milestones, except environment and forest clearance, in time. The committee would also decide on grant of 100% fuel supply for one year to companies whose blocks fall under 'no-go' area," the official said.
Blocks lying in thick forests, wildlife parks and sanctuaries are classified as 'no-go' areas, and all mining applications are rejected.About 40% of coal reserves in India are estimated to be under dense forest cover.
The committee, chaired by coal ministry special secretary Alok Perti, will also decide on cancellation of linkages of 22 captive power plants that have no end use projects or have not achieved the required milestones.Linkages to power projects scheduled for commissioning before December 31 will also considered by the ministry.The meeting will also take stock of cases where validity of granted coal linkages will expire in 2011-12. Some linkages that expire in the current fiscal are NTPC's projects at Solapur, Mouda, Meja and Nabinagar, Damodar Valley Corporation's projects at Raghunathpur, Jindal Power's Tamnar project, Lanco's Amarkantak and Adani Power's Tiroda projects.A review committee on progress of allocated coal blocks has already recommended de-allocation of 31 blocks held by 26 companies, including Tata Steel, NTPC, MMTC, Nevyeli Lignite Corp, Mahanadi Coalfields and Electrosteel Castings. The de-allocated blocks will be allotted to Coal India or its subsidiaries.
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