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Indian power companies need to secure more own coal mines – Minister

24th October 2018 BY: Ajoy K Das
Creamer Media Correspondent

KOLKATA (miningweekly.com) – India’s Power Ministry has directed thermal power companies to be more aggressive in securing their own coal assets and to reduce dependence on Coal India Limited, as these power plants will continue to be the country’s source of base electricity and will continue to suffer a shortage of dry fuel supplies from State-run miners.

“Thermal capacity expansion is a constraint. We need to do something about it. Companies like NTPC Limited and Damodar Valley Corporation Limited (DVC) will have to set things right and strengthen their mining wings,” Power Minister R K Singh said.

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“These companies need to operationalise the coal mines they already have. There is a need for them to get more. Currently, coal is an issue. They should be getting more mines and at the same time, increase generation from renewables. But renewables themselves will not be enough; the power companies will have to strike a balance between renewables and coal as clean energy will not be able to generate power round the clock,” Singh said.

He said that power demand was increasing at 6% a year and was forecast to rise by 9% with increasing industrialisation and consumer demand.

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The Minister’s stress on acquiring own coal resources comes against the backdrop of government power sector regulator, the Central Electricity Authority, setting a target of 35.79-million units in the current financial year for water resource management and power company, DVC, up 3.12% over the previous financial year.

At the start of the current financial year, DVC had announced setting aside an estimated $150-million to develop a 103-million-ton coal block in the eastern state of West Bengal.

NTPC, the country’s largest power producer, has already decided on floating a wholly owned subsidiary solely dedicated to coal mining and bringing all ten coal blocks allocated to it, with an estimated seven-billion tons of reserves, under the mining subsidiary.

To instill a mining company ethos and shift the management culture of a power generation firm, NTPC, the parent, could also consider offloading part of its equity stake in the subsidiary and seeking listing at bourses, company sources said.

The power company had already started coal production from its Pakri-Barwadih coal block in Jharkhand, in eastern India, producing an estimated 4.3-million tons by June 2018, while production from its Dulanga mines, in Odisha, had just commenced and production of about 1.43-million tons was expected by the close of the current financial year, the sources added.

With its own mining subsidiary in place, NTPC is targeting meeting at least 33% of its total coal requirement from its own coal mines.

However, the Minister’s exhortation to be more aggressive in securing its own coal mines comes at a time when, despite laying down the roadmap for a dedicated coal mining arm, NTPC has been compelled to plan to import at least two-million tons of coal to cope with the immediate shortage of coal supplies to its power plants. 

EDITED BY: Mariaan Webb Creamer Media Senior Researcher and Deputy Editor Online
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