The planning commission has mooted the need for pooling imported coal with domestic supply to average out costs and supply it to all users at uniform prices. This will help lower cost for companies that rely on import to meet their coal needs. Imported coal is about 50% costlier than Indian coal despite the recent price increase by Coal India Ltd , the state-run coal miner. "We have to develop a system of pool pricing of coal so that imported coal plants don't becomes uneconomic ," Planning Commission member BK Chaturvedi told ET.
The commission has forecast coal shortage in India will soar to 200 million tonnes by the end of the 12th Plan (2012-17 ), with a demand of 1,000 million tonnes against a production of 800 million tonnes. Next year, the shortage is expected to be around 142 million tonnes, with availability of 554 million tonnes against a requirement of 696 million tonnes. At a meeting with the prime minister last week, the commission had stressed on pooling and the need to expand the role of Coal India to that of a supplier.
The panel's proposal on Coal India was in line with the Central Electricity Authority's suggestion earlier that the state-run miner should act as a nodal agency for importing, pooling and supplying coal. "If we have to meet energy requirements , we need to have large amount of power from coal and gas. Large amount of imports have to done," Chaturvedi said. The Plan panel member said the idea of pool pricing of coal came from a gas pooling policy that helped revive power projects like the Dabhol plant, owned by Ratnagiri Gas and Power. "We had a system of pool pricing for LNG, and plants like Ratnagiri became viable along with others . This is the intention of pool pricing. And we are looking into the possibilities of formulating the policy," Chaturvedi said.
If implemented, the pricing policy will benefit companies such as Adani Power that invest heavily in imported coal. "In my view, pooling prices of coal will rationalise the transportation of coal, reduce congestion and increase efficiency," said Adani Power vice-president Kandarp Patel. But it could impact other players differently, he added. For other stakeholders, such as National Thermal Power Corporation , the largest consumer of coal in the country, coal prices will rise because the company meets most of its needs through domestic output. "It will depend on how the government formulates the pricing policy. We rely heavily on domestic coal, so for us prices will increase ," an NTPC official said.
The electricity authority had also suggested a coal pooling pricing formula based on average price of imported coal after transportation and insurance charges, and taking into consideration coal produced by Coal India and Singareni Collieries Company. However, the proposal has received few takers and will be worked on by the coal ministry after it gets feedback from all users.
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