Goyal asks Coal India to boost output, cut e-auction quantity

Says power generation has suffered as CIL has been unable to meet production targets for reasons including delayed approvals for new mines

Beginning the Herculean task of increasing electricity generation, Power Minister Piyush Goyal today asked Coal India to raise production from existing mines and reduce the quantity offered in e-auctions so that utilities can get more supplies of the fuel.

Goyal, who is also the Coal Minister, met top power honchos, including Anil Ambani, Chairman of Reliance Power, Gautam Adani, Chairman of Adani Group, Vineet Mittal, Managing Director of Welspun Energy, and Naveen Jindal, Chairman of Jindal Power, to look for solutions to address the country's electricity shortage, which was as much as 7,000 MW in May.

Power generation has suffered as Coal India has been unable to meet production targets for reasons including delayed approvals for new mines. Importing coal to make up for the shortfall is more expensive and utilities are not always able to pass on the costs to consumers.

Coal India, the world's largest coal producer, sells about 7% of its production through e-auctions, where smaller, non-power users walk away with most supplies as electricity generation companies do not bid aggressively in view of tariff caps.

About 60% of India's installed generation capacity uses coal. The minister asked Coal India to increase supplies of the fuel to power stations and said projects where construction is complete should get preference in allocation.

"The projects which are in position to start generation should be given coal first," Goyal told reporters after the almost four-hour meeting with the private power producers and other stakeholders.

Coal India had earlier reduced the e-auction quantity from 10% to 7%. Lower e-auction quantity will help to increase supplies.

The minister and power generation firms discussed a range of issues, including fuel availability for coal and gas-based plants.