Lack of Coal supply hurting power sector: Experts

State to stand tall with its political will despite critical power scenario, says Saurabh Patel.

Even as Indian power sector is bleeding heavily with mounting losses of distribution companies (Discoms) and shrinking margins of power generation, industry players blame coal availability and lack of transmission infrastructure for acting as a spoilsport for the industry.

Industry insiders have raised an alarm over the worsening condition of fuel linkages, as not all the new power producers are likely to get domestic coal.

"For the coal-based power producers, fuel has become the biggest game spoiler. Fuel availability is shrinking and power capacities are rising. In such a situation, Indian power industry can't survive on imported coal," said, Ravi Sharma, CEO, Adani Power.

Public sector mining major Coal India (CIL) meets more than 80 per cent of the requirement with coal production of about 431 million tonnes achieved last year.

However, company officials maintained that more than CIL, private mining players have to scale up their production so as to meet the growing coal requirements and reduce the dependence on the mining major.

"Of the country's total available coal resources of 276 billion tonnes, nearly 100 billion tonnes falls under 214 blocks that have been allotted to private players for mining. They have to ramp up their production. At CIL, we aim to achieve production target of about 452 million tonnes in the current year," said H K Vaidya, CGM - sales and marketing, CIL.

According to data provided by Central Electricity Authority, India's power generation from coal fell by 4 per cent during April 2010 and February 2011 to 503.9 billion units (a unit= 1 kilowatt hour) from the target.

Meanwhile, Gujarat has stood tall with its power policy and surplus power capacities even in the current troubled times of power industry. Saurabh Patel, minister of state for energy and industries, Government of Gujarat informed that a strong political will and policy backing has helped Gujarat to stand tall in tough times.

"The times are not good for Indian power sector. Domestic coal availability is limited and imports are costly. Secondly, power generation from gas is also in bad shape due to slowing KG production. But Gujarat is saved from this and we could make profits," said Patel, who was addressing a gathering at a conference 'Powering Gujarat' organised by Independent Power Producers Association of India (IPPAI) held in Ahmedabad on Wednesday.

He further maintained that even as nearly 500 Mw of gas-fired capacities stand idle due to lack of fuel supply, the state could manage to offset the losses worth Rs 480 crore per year. "We could offset the losses from power trading on exchanges as we have excess power capacities," said Patel.

Patel called for faster execution of evacuation infrastructure as despite having demand in southern corridor of the country power is not supplied due to lack of inter-state transmission lines.

Some of the noted industry experts delivered address on various aspects of power industry including challenges faced by renewable energy sector, prospects for Open Access for consumers and second licensee for distribution.