Power plants with own coal mines under CEA scrutiny

The apex planning body for power sector will carry out a fresh survey of power plants that have captive coal mines as it looks to ensure that environment disputes did not derail projects which have made substantial progress. The power ministry has asked the Central Electricity Authority (CEA) to get a clearer picture on the progress made by such projects.

“This (the fresh survey) will help the government in suggesting policy prescription to addresses environmental concerns and limit disruption of development projects,” a power ministry official said.

The environment ministry has categorised major coal mining areas in the country as “go” and “no go” areas, specifying regions where mining can be permitted after necessary clearances. Though the categorisation is indicative in nature, it has made power project developers jittery as several of their existing and upcoming coal mining operations and captive mines now fall in the areas barred for mining.

The categorisation has already delayed the award of two 4000 MW ultra mega power projects in Orissa and Chhattisgarh. It is feared that several other power projects may suffer from the `no-go’ categorisation, putting the country’s power generation capacity addition programme under further stress.

Under the directions of the prime minister’s office, a group of ministers led by Finance Minister Pranab Mukherjee will work out the final policy on the matter after further mapping of forest and coal reserves. The CEA’s input will be important for determining the fate of captive blocks. Coal minister Sriprakash Jaiswal and environment and forest minister Jairam Ramesh are the other members of the GoM.

After the intervention of the PMO, the environment ministry has shown some flexibility, agreeing to free some more (about 10%) ‘no go’ areas for mining with proper environment management exercise. This position may be watered down further when the policy is finalised.

The focus of the CEA survey will be on projects whose captive mines fall in `no go’ areas. Coal mining projects that do not require large scale diversion of forest land and do not disturb the ecological balance and where companies have already made some investment may be kept out of the list of companies barred from mining.“While CEA nod is must before work on projects starts, fresh survey will help to know the level of commitment of developers,” said the power ministry official.

In terms of captive coal blocks, so far about 208 blocks have been allocated with reserves of 45 million tonnes. Only 26 captive blocks have started operations. The CEA study could cause problems for projects that are sitting on captive mines without much development work.