Captive mine development gets a push

Government keen to ensure 75,000-Mw capacity addition in the 12th Five Year Plan

After missing targets in the previous two Five Year Plans, the ministry of power now wants to ensure that a capacity addition of 75,000 Mw is achieved in the 12th Plan starting in April.

Accordingly, the ministry has tightened its supervision over NTPC Ltd with regard to developing captive coal mines. It has also asked state governments and independent power producers (IPPs) to speed up the development of the country’s mines.

Only last week, the PMO issued a directive to Coal India Ltd (CIL) to meet supply commitments, even if it means importing. This brings in an assured addition of 75,000 Mw in the 12th Plan, a ministry official said. “The instruction to sign agreements to supply at least 80 per cent of committed quantity will bring about 60,000 Mw capacity,” he said. “The rest, we will add through imported coal, besides generating gas- and hydro-based power.”

There has been no official target for the 12th Plan (2012-17), but the Working Group on Power has recommended an addition of 75,000 Mw.

Besides, the ministry has asked the state governments, IPPs and NTPC to expedite the development of coal mines. NTPC is expected to start the first coal production from its mines by 2013; five coal blocks have been allotted to it. “There is a regular monitoring exercise that we do with regard to coal mining production from our coal blocks,” the official added.

Sensing the acute shortage of coal, the ministry also encourages its import. This can be done after taking into account technical specifications of the pertinent power plants.

Domestic coal shortage has impacted the power industry, with many power plants running at a low load factor. The government had fixed a target of 78,000 Mw for the 11th Plan, before revising it to 62,374 Mw during the Planning Commission’s mid-term appraisal

The capacity addition in the 11th Plan is expected to be around 58,000 Mw. For the 10th Plan, the government had fixed a target of 40,000 Mw, but only 21,180 Mw was added during 2002-07.

According to the decision announced by the Prime Minister’s Office (PMO), CIL will have to sign supply agreements with power plants that will get commissioned over the next three years ending March 2015. Also, the company has been asked to sign agreements for supply within a month for plants commissioned up to December 31 last year. The agreements, the PMO said last week, would be signed for full quantity of coal mentioned in the letters of assurance for 20 years with a trigger level of 80 per cent for the levy of disincentive and 90 per cent for the levy of incentive.