India's coal deficit is
expected to double to 265 million MT in the next five years despite a
three-fold increase in government spend on the sector.
Importing such quantity of coal
even at today's prices would mean a whopping $32 billion forex bill, but it
would be necessary to light up only a third of the country's power capacity by
2016-17.
Large imports look unviable given
by the volatility in international coal market. International coal prices
increased by almost 60% between October 2010 and March 2011 due to regulatory
changes in exporting countries, such as Indonesia and Australia. However, prices
did soften a little only in the last 2-3 months due to slow down in economies.
All existing imported coal-based
power project developers have asked the government to revise tariffs.
As per latest government estimates, demand for coal will grow to 980.5MT by
2016-17 as against domestic availability of 715MT. The estimated demand is
about 100MT higher than projections made by Planning Commission's Integrated
Energy Policy. At present, the country has a coal deficit of 137MT.
Coal output during the 12th plan
is expected to grow 5.31% per annum, against 5.16% a year in 2007-12. The
deficit would grow even as the government spend on coal sector is expected to triple
to Rs 1,09,824 crore during 12th plan.
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