A shortfall of coal supplies due to policy hurdles could prevent India from expanding power capacity by more than a targeted 75,000 megawatts by March 2017, which could crimp its 9 percent economic growth plan for the period, a draft report said.
Coal accounts for more than half of India's power generation, and coal imports are to jump by four times to 213 million tonnes in 2016/17 from 54 million this fiscal year to meet the new power target, according to the draft by the power regulator, which was obtained by Reuters.
“Availability of coal for the coal-based thermal power stations is a matter of concern,” the report by the Central Electricity Authority said.
“Ministry of Coal/Coal India need to be impressed upon to formulate a contingency plan to meet the demand of the power sector,” the report said, basing its projections on 9 percent GDP growth in 2012-17 and elasticity of demand versus price at 0.9 percent.
India has an installed capacity of 182,000 MW, which is only about a fifth of China's power generating capacity.
India's appetite for coal has meant Coal India is the country's second most valuable company after an initial public offering last year raised a record of about $3.5 billion.
Costly imports may be the only way now to meet the country's coal demand.
But distribution firms are reluctant to buy costlier power from producers, which blend imported coal, because they will have to sell power at a discount and incur losses.
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