Coal news and updates

‘Low lifting by power units not indicator of low demand’

September 16: Non-lifting or low lifting of coal by some power sector consumers during the past 4-5 months cannot be taken as an indicator for lack of demand, Coal India Ltd (CIL) Chairman S Narsing Rao said.

“The non-lifting or low lifting of coal by some companies during the past 4-5 months cannot be taken as an indicator of lack of demand,” Rao told ICMW.

“Overall, I agree the original target is not being achieved, but I won’t really say that it (demand projection) was over-targeted. There are other factors too,” he said.

According to Rao, 7-8 years ago when the country was doing its planning for coal consumption, then the analysis was that generation was the biggest constraint. Therefore, power plants should be set up.

“Subsequently we realised generation has been a constraint and therefore huge capacities have been added during the past 5-6 years, but then transmission and distribution and, more importantly, the financial health of the distribution companies are the biggest threats today than generation because they have no means to buy the kind of power that is generated,” Rao said.

The CMD said that whatever be the reason power companies are not passing the buck to the consumer by not revising tariffs, but it is certain there are many challenges before the power sector.

“There are impediments like transmission, distribution the financial position of the distribution companies. That is what we are seeing today in the form of stranded generation capacities.”