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Coal production: billion tonne target within sight

| | Updated on: Mar 08, 2015
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Minister Piyush Goyal says production of coal and power has increased significantly since the NDA came to power

Coal production in the last nine months has increased by 7 per cent, no mean feat if you consider the rate of growth in recent years, said Piyush Goyal, Minister for Power, Coal and New & Renewable Energy.

Speaking to corporate leaders at ‘Breakfast with BusinessLine ’, he said it was easy to dismiss this as insignificant, but the difference is stark considering that the compound annual growth rate was just 1.5 per cent over the last five years and 3-4 per cent in the best years.

Observing that the media often fails to take note of such positive developments, he said power generation also had increased – thermal by 13 per cent and overall by 11 per cent.

BusinessLine Editor Mukund Padmanabhan led the interaction with Goyal and moderated it.

The Power Minister revealed that it was during a long review with Coal India officials that he had, in a moment of frustration, come up with a coal production target of one billion tonnes in the next five years.

“An off-the-cuff comment became our target,” he admitted. Coal India had achieved 925 million tonnes, which gave him the confidence that even a billion tonnes was possible.

The bigger challenge was where to use the coal. He said he had persuaded the Railways to provide 25 additional rakes to move coal in March. He had also requested government-owned NTPC to lift additional quantities of coal so that stocking capacity at mines was freed up, enabling them to produce more.

Referring to the proposal to have five new ultra-mega power projects, each of 4,000 MW capacity, he wondered whether it was worth pursuing UMPPs that rely on imported coal. It was for the States to decide, especially coastal States such as Tamil Nadu, Gujarat and Maharashtra, where the cost of transporting coal from mines was high.

His worry was how the 1 billion tonnes of coal that Coal India produced would be consumed. “I am trying to encourage more and more domestic coal UMPPs. There may be some possibilities of UMPPs on the coast through imported coal, but we have to be careful that we don’t get into a situation like the Tatas in Mundra,” Goyal said.

Cabinet nod In the last fortnight, he said, the Cabinet had cleared a proposal as a test case where NTPC would bundle about 1,500 MW of unallocated thermal power from the Central pool with solar power and market both together. This would increase the cost of thermal power a little, but it would still be below the marginal rate at which distribution companies buy power.

This, he said, would enable 3 GW of solar power to go onstream. It would also help achieve economies of scale gradually, after which solar power tariffs would come down.

Goyal said NTPC and other PSUs had aggressive plans for renewable energy. The Minister added that he was working on a few ideas that would make renewable energy cheaper than thermal power.

The increase in coal cess to ₹200 a tonne, given the aggressive coal production plans, would see the national clean energy fund get nearly ₹25,000-30,000 crore every year, which would also go a long way in supporting renewable energy initiatives. To further promote renewable energy, the Centre was pushing for obligations on the generation side. This means that those setting up conventional thermal power plants will also have to set up renewable energy generation capacity.

Admitting that transmission was an issue, the Minister said transmission capacity addition had to be done 15-20 years into the future. Unfortunately, because of observations by the CAG in the past about poor capacity utilisation in transmission lines, there has been a slowdown on this front. The minister said he was working towards a one-nation, one-grid with the ultimate goal of having a grid for the SAARC countries.

Goyal said his ministry was looking at “socialising the transmission costs pan-India. We are making it free of charge to transmit renewable energy inter-State and I am encouraging the States to make intra-State also free.” The grid had to be managed in such a way that the frequency mismatch did not affect transmission overall, he said. At the same time, Goyal added that he would appeal to wind-power generators to better schedule and forecast their generation.

Also read: ‘Renewable energy targets not unrealistic’

Published on January 24, 2018

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