Coal demand to go up to 1000 MT by 12th Plan-end: Plan Panel

The Planning Commission has estimated the country's coal demand to go up to 1,000 million tonne (MT) by the end of the 12th Plan period (2012-2017), necessitating over 200 MT imports.

"... The domestic output is unlikely to exceed 750 MT leaving more than 200 MT shortfall to be met from imports. Even this assumes that the domestic output will be able to increase by over 200 MT from current levels," it said in an approach paper for the 12th Plan Period.

The Planning Commission said the demand for coal rose by about 8% a year during the 11th Plan and may rise by about the same magnitude during the next Plan.

"Coal output expanded at about 7% per year in the five-year period for FY05 to FY10, with specially strong growth in both FY09 and FY10," it said.

However, in FY11, coal production remained stagnant, it said, adding that the domestic coal output was originally targetted to reach 680 MTPA in the 11th Plan. It was scaled down to 630 MT in the Mid-Term Appraisal.

The Planning Commission said uncertainties in coal supply were affecting the power generation.

"Coal India is not entering into Fuel Supply Agreements for more than 50% of the requirement of the thermal plants, and that too only for five years," the Planning Commission said.

The Commission also added that private sector investors in power generation were unlikely to able to access financing from banks if there is uncertainty over coal supplies.

Stressing on aligning domestic and international prices, it said that Coal India should explore the possibility of developing a mechanism to enable power producers procure a mix of domestic and imported coal consistent with their technical constraints.