CIL, a state-owned largest Coal producer, plans to establish a power project at Odisha in 2015.
CIL that accounts for almost 80% Coal output of the country is planning to set up a 16,000 MW power project near one of its mine in Odisha for the upcoming year.
Coal produced from the mine cannot be shipped due to lack of rail connections and supply problems. The company has been unable to achieve output targets for more than 6 years because of insufficient connectivity which further led to Coal shortages.
Pit-head power plants would be beneficial for India in terms to reduce power tariffs by at least 50 paisa per kilowatt hour compared with conventional plants owing to savings on transportation and other costs.
It’s in the news that India is facing acute fuel shortages and there may be a shortfall in production of around 5 MnT in the current fiscal. Without assured supply from CIL, private companies will have no option but to increase imports.
However, it is important for CIL to ensure that it needs to fulfill the Coal supply obligation to power companies before venturing into electricity generation itself.
CIL has produced around 462.5 MnT Coal during FY14; however the company had targeted 482 MnT of production that missed by 4%.