Coal Ministry plans to set up a committee to assess the feasibility of pooling of coal prices by Coal India

The coal ministry plans to set up a committee to assess the feasibility of pooling of coal prices by state-run miner Coal India Ltd.

The idea has been mooted by the Planning Commission and Central Electricity Authority to bring down the cost of coal in the country. The two favour a pooled price formula based on the average price of imported coal, after transportation and insurance charges, and the coal produced by Coal India and Singareni Collieries Co Ltd.

Pooling of coal prices will help private sector companies that have to import coal at costs up to 50% higher than the domestic coal.

Coal India has so far been opposed to this idea as it will be difficult for it to suddenly start importing coal to meet the needs of the private sector as well, a senior coal ministry official said. “But since the country is facing coal shortage due to environmental issues, we will look at the feasibility of the proposed policy.”

In fact, Arup Roy Choudhury, the new NTPC chairman, has supported the idea. “When we can pool the prices of diesel to keep the prices uniform, we can do the same for coal prices as power sector needs coal,” he told DNA in an interview.

Out of a total installed capacity of 1.72 lakh mw in the country, 94,138 mw of capacity is coal-based.

Coal-based power units are facing an acute shortage of the fuel. So much so, the power ministry has warned that shortage of coal supply from Coal India will force the power plants commissioned in 2009-10 to function at 40% plant load factor. Power plants with a capacity of 5,593 mw were commissioned in 2009-10, banking on coal linkage from Coal India. Power plants typically function at a plant load factor of over 80%, with NTPC maintaining a rate of over 90% for its power plants.