Hit by fuel shortage, power projects running at partial capacity only

On paper, a cumulative thermal power generation capacity of 30,419 mega watts is reported to have been added during the last two years, an impressive increase of 27 per cent. But when it comes to actual electricity generation on the ground, the corresponding rise is just 15 per cent. The reason: most of the power generation projects commissioned since March 2009 are either idling or forced to operate at partial load.

The continuing shortage of fuel is clearly the biggest impediment, with domestic coal stocks alarmingly low and gas production having hit rock bottom. Added to this are some structural issues, including the fact that Coal India Ltd (CIL) has stopped signing fresh fuel supply agreements (FSAs) with power generation projects. Even in cases where FSAs have been signed, CIL is not willing to release coal to projects that do not have firm power purchase agreements or PPAs with distribution utilities in the states.

The numbers bear this out. A total of 143 FSAs are to be signed by Coal India Ltd by 2014-15 with identified power projects totaling a capacity of 60,000 MW that were assured coal supply following a high-level intervention by the Prime Minister's Office in January last year. Of these, 92 are to be signed by the end of 2012-13. Till February-end 2013, with just a month left for the financial year to draw to a close, only 46 FSAs had been signed, according to the latest Coal ministry estimates.

Complicating the matter further, the signing of fresh PPAs can take place only if the states call for bids from project developers to buy electricity, under the provisions of the Power ministry's tariff policy that makes it binding on states to procure power only through the bidding route. The bidding process itself, though, is hanging fire as basic prerequisites such as the standard bidding documents are still not ready.

... contd.

ALSO READ

CBI chief says report on coal block 'clean and clear'

Pak High Commissioner to visit Sanaullah today

Janampatri to genomepatri, the leap forward in predicting future

Despite fast-track courts, rape conviction rate still low