Thermal: Fighting a coal war
Speaking to Business Line, a top executive at a leading infrastructure financing entity said he would not lend even “one rupee” to the power sector. His company is not alone in giving the sector a wide berth. The power sector, particularly the coal-fired thermal segment, which accounts for more than 65 per cent of generation, is in a logjam.
It is not hard to see why. Power plants are not getting enough coal; production cannot be raised because environmental concerns have stalled new mines; and imported coal is costly. The only way out is to produce more coal.
In January this year, Prayas Energy Group released a report on coal mining in India. In the sea of statistics and information the report provides, one bit stands out. It says that in 2011-12, installed coal-based power capacity increased 19 per cent, while domestic coal production rose by a mere one per cent.
The report goes on to note that power plants were promised far more coal than could be produced. “By April 2011,” it says, “coal linkages equivalent to about 270 million tonnes a year had been granted to new power plants, while the most optimistic production increase in the 11th Five Year Plan was only 250 mtpa.”
The reason for that mismatch lies in the 10th Five Year Plan period (ended 2007). The Government drew flak as the country’s installed power capacity increased by about 22,000 MW, less than half of the target for the period.
In the next plan period (e...