Tuesday, 20 January 2015

Govt to increase coal production to 1 billion tonne by 2020

With power demand rising across the country and the coal industry still in the doldrums, Union Power and Coal Minister Piyush Goyal has his work cut out. And he is seen to be making the right noises as he promises to increase coal production to 1 billion tonne by the year 2020.

"We will be investing in setting up new rakes for evacuation of coal as well as in technology, equipment modernisation and efficiency measures. Already the production of Coal India has increased 15.8 per cent between June and November 2014 compared to same period in 2013," he said.

A week after scrapping the bidding process for two ultra mega power projects (UMPPs) in Tamil Nadu and Odisha, Goyal now aims to invite tenders for at least 4-5 UMPPs over the next one year. The government cancelled the bids for the two proposed 4,000 MW plants due to tepid private sector response and funding issues raised by bankers.

"The Odisha project was scrapped due to problem of the coal company and electricity company being two different entities which is not permitted in the current scheme of things, while the other one received only one bid from state-run NTPC. Since we believe that there should be competition to ensure that consumers get the benefit of lower tariffs, we scrapped both of them," Goyal informed.
He also said the ministry has set up a new expert committee that will take into consideration all the view points of all stakeholders and only then new biddings process would start. "We are reviewing the entire situation. We are consulting experts. We hope to invite bids for at least 4-5 UMPPs in the next one year."

Currently, only two UMPPs are operational -the 4000-mw Mundra UMPP of Tata Power in Gujarat and the 3,960-mw Sasan UMPP of Reliance Infrastructure in MP. Private companies, including Adani Power, CLP India, Jindal Steel & power, JSW Energy, Sterlite Energy and Tata Power, were in the fray for the Tamil Nadu plant. Of these, four bought the request for proposal document but decided not to go ahead further in the process.

The Odisha UMPP saw nine bidders, including Adani Power, CLP India, GMR Energy, Jindal Steel & Power, JSW Energy and Sterlite Energy. However, after private companies backed out, only NTPC and National Hydroelectric Power Corporation (NHPC) were left for bidding.

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