New Delhi: Around one-tenths of India’s installed power generation capacity of 250,000 MW is under-utilised because of domestic coal shortages, a report here has said.
The report comes after the Supreme Court on Wednesday cancelled 214 coal blocks allocated from 1993 to 2011, except four vested with the NTPC, SAIL and the Sasan Ultra Mega Power Project (UMPP).
“It is estimated that around 25,000 MW capacity is being sub-optimally utilised because of inadequate availability of domestic coal,” local think-tank Integrated Research and Action for Development (IRAD) said in a report.
It said the country is likely to suffer a shortfall of 200 million tonnes of coal by the end of the 12th Plan period 2012-16.
“India is facing lot of difficulties in production of domestic coal due to various reasons. The scenario is likely to remain the same till the end of the 12th plan,” it added.
The apex court bench granted six months breathing time to mining companies to wind up their operations in the coal blocks.
The court also imposed an additional levy of Rs.295 per tonne of coal extracted from exempted or operational mines.
The State Bank of India on Friday in its Ecowrap report said the cancellation of coal blocks would impact power generation capacity as well as the investment climate.
“After the cancellation of coal blocks, the government companies are not in a position to supply the required quantity of coal to power generation companies. Power stations have a supply of less than one week of coal and therefore there are possibilities of power outages,” the SBI report said.
“Huge investments up to about Rs.287,000 crore have been made in 157 coal blocks as on December 2012 and the judgment will give a temporary setback to the investment climate,” it added.
Going forward, a swift and transparent bidding process for reallocation is needed, the SBI said.
The IRAD report also said the country needs investments of over $250 billion for development of the power sector in the next few years.
“Total investment of over $250 billion is required for development of the power system during the 12th plan,” the IRAD said.
During the 12th Plan period, India plans to add nearly 89,000 MW capacity, of which close to 70,000 MW will come from coal.
