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Advisory group recommends to boost India’s Coal production

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Advisory group recommends to boost India’s Coal production
in Commodity News 23/12/2014

An Advisory Group appointed by the Narendra Modi Government has submitted its report on India’s Integrated Development of Power, Coal, and Renewable Energy.

In the Report, suggestions have been made for enhancement of coal production in short, medium and long terms. Improvements needed in Coal India and its subsidiaries including CMPDI have also been identified and appropriate actions have been recommended. It has been suggested that opening up of the coal sector may be necessary, to supplement in a significant way, the domestic production by Coal India and a few other Companies.

The Group has also suggested the salient aspects of the Coal Block Auction Process, Coal Linkage Rationalization, Swapping of Coal Linkages, need for Urgent Action on Coal Linkages to Power Plants already Commissioned, and likely to be Commissioned by March, 2015, Railway Infrastructure from Coal Mines to main Railway System, to be developed through various options including JV Company on Infrastructure by CIL etc.

Concerning Power Sector issues, on which recommendations have been made in the Report by the Advisory Group include Amendments to Electricity Act, Tariff Policy, Standard Bidding Documents (Case I and Case II), approach to and challenges associated with 24X7 Power Supply, Urgent need for Distribution Sector Reform with targeted actions including Privatization /PPP in Distribution, Enhanced role of and Improvements in working of CEA, Transmission constraints – short term and long term actions, enhancement of Thermal Power Capacity Addition, Advance actions for Coal Linkage and other inputs for Thirteenth Five Year Plan Projects, Need and Actions for Accelerating Hydro Power Projects, Role of POSOCO for a Congestion free Transmission and Market Development, Phasing out of old and inefficient Thermal Power Plants which consume excessive fuel etc.

Recommendations on Amendments to Electricity Act include separation of Carriage and Content in the Distribution license, authorization to Central Government to adopt measures for incentivizing Renewable Energy generation, making Tariff Policy obligatory for Regulatory Commissions, New Coal based Generating Plants to also have obligation to set up Renewable Energy Generation Station as a percentage of the Conventional coal based Power Plant as specified by the Government, restricting the authority of the State Governments to issue directive to prevent Open Access, to provide options to Consumers to choose their Power Suppliers with the objective of facilitating competition in power supply, further strengthening of Penal provisions with a view to improving quality of service, and Grid discipline, establishment of regional Regulators in consultation with States at an appropriate time, mechanism for review of performance of Regulatory Commissions through Forum of Regulators etc.

Renewable Energy, particularly Solar and Wind, require large scale capacity addition which will not only balance the skewed power sector profile, but will also lead to price parity with conventional power due to economy of scale. Green Transmission Corridors, Incentivizing Renewable Capacity Addition, Coal based Generating Companies to be obligated to also set up Renewable Power generation, Priority in purchase of Renewable Power by Distribution Utilities, Improving the functioning of Solar Corporation and IREDA, are some of the important recommendations in respect of Renewable Energy. Many of the amendments suggested in the Electricity Act also aim at encouraging and incentivizing Renewable Power development.

It has been suggested that MNRE should get comprehensive studies conducted for more accurate estimates of Solar and Wind including Off-shore wind potentials, since the present estimates are grossly underestimated.
Source: Commodity Online