Fuel Shortage of Power Generation Units

Some power generation facilities are facing shortage of coal and gas. During the year 2011-12, Power Utilities reported a generation loss of the order of 9 Billion Unit (BU) and 11 BU due to shortage of coal and gas respectively. Details are enclosed at Annex-I & II respectively.

Production of coal from the domestic sources has not been matching with the increasing requirement for electricity generation. The shortfall is being mitigated through blending of imported coal to the extent technically feasible. The coal-based generation during 2011-12, however, registered a growth of about 9.2%.

During the year 2011-12, gas and liquid fuel based energy generation was inter-alia affected due to lower system demand mainly on account of sudden drop in the domestic & agricultural demand due to better availability of water, better weather conditions & increased thermal, hydro and nuclear generations coupled with shortage in supply of gas. Being comparatively costly power, gas based units had to shut down / back down Gas Turbines (GTs) due to receipt of lower schedule from the beneficiary States. The total average daily availability of natural gas during 2010-11 from different sources was 162.1 MMSCMD with a share of 55.35 MMSCMD from KG-D6. During 2011-12, the availability of gas from KG-D6, which is the major source of natural gas, has steadily declined with the availability of 34.3 MMSCMD during the month of March, 2012. The availability of imported R-LNG fluctuates from time to time depending upon the demand, price and tie ups with suppliers due to which supply to Power Plant has reduced.

While efforts are being made for getting supply of coal to power stations enhanced, import of coal subject to blending to the extent technically feasible has been resorted to during the last few years in view of prevailing inadequacy of domestic coal for meeting the electricity generation requirements. It has been decided that CIL will sign Fuel Supply Agreements (FSAs) with power plants that have entered into long-term Power Purchase Agreements (PPAs) with DISCOMs and have been commissioned/would get commissioned on or before 31^st March 2015. The FSAs will be signed for full quantity of coal mentioned in the Letters of Assurance (LOAs) for a period of 20 years with trigger level of 80% for levy of disincentive and 90% for levy of incentive.

Production of gas from KG D-6 has steadily declined. Consequently, the project developers have been advised not to plan projects based on domestic gas till 2015-16.

Annexure-I

Annexure-II