Posts Tagged ‘coal’

De-allocation of coal blocks

November 22nd, 2012 No comments

Recently, the government issued letters de-allocating coal blocks of various companies, based on the recommendations of the  Inter Ministerial Group (IMG).  This post discusses the history behind the de-allocations, the parameters the IMG used while examining the progress of various coal blocks and the action that has been taken by the government.

The Comptroller and Auditor General (CAG) released a performance audit report on ‘Allocation of Coal Blocks and Augmentation of Coal Production’ on August 17, 2012.  Some of the key findings of the Report were:

The IMG on Coal was constituted for the periodic review of the development of coal blocks and end use plants.  The IMG had requested a status paper from the Coal Controller, MoC.  This has been submitted to the IMG but is not available.  The IMG will decide if private allottees have made substantial progress based on certain parameters.  The parameters used by IMG are:  approval of Mining Plan, status of environment and forest clearance, grant of mining lease and progress made in land acquisition. They are also examining the physical status of End Use Plant (EUP), investment made and the expected date of opening of the mine and commissioning of EUP.

The IMG has made the following recommendations:

Table 1: Coal Blocks Recommended for De-allocation by the IMG (as of November 22, 2012)

Coal BlockAllotteeCaptive End Use
Source: "Government Deallocates three more Coal Blocks," PIB, September 18, 2012, Ministry of Coal; "IMG Recommends Deallocation of Three More Blocks," PIB, September 19, 2012, Ministry of Coal; Ministry of Coal,; PRS
Gourangdih ABC, West BengalHimachal EMTA Power Ltd and JSW Steel LtdPower
Rawanwara North, Madhya PradeshSKS Ispat and Power LtdSponge Iron
New Patrapara, OrissaBhushan Steel LtdSponge Iron
Brahmdiha, JharkhandCastron Mining LtdIron and Steel
Chinora/Warora (West), MaharashtraFieldmining and Ispat LtdSponge Iron
North Dhadu, JharkhandElectrosteel Castings LtdSponge Iron
Choritand Tailaya, JharkhandRungta Mines Ltd, Sunflag Iron and Steel LtdSponge Iron
Bhaskarpara, ChhattisgarhElectrotherm India Ltd, Grasim Industries LtdSponge Iron
Dahegaon/ Makardhokra-IV, MaharashtraIST Steel & Power Ltd, Gujarat Ambuja Cement Ltd, Lafarge India LtdSteel, Sponge Iron and Cement
Gondkhari, MaharashtraMaharashtra Seamless Ltd, Dhariwal Infra Ltd, Kersoram Industries LtdSponge Iron and Cement
Macherkunda, JharkhandBihar Sponge Iron LtdSponge Iron
Lalgarh (North), JharkhandDOMCO Smokeless Fuels Pvt LtdPig iron

Table 2: Coal Blocks for which Bank Guarantees Recommended to be Deducted by the IMG (as of November 22, 2012)

Coal Block AllotteeCaptive End Use
Source: "Government Deallocates three more Coal Blocks," PIB, September 19, 2012, Ministry of Coal; "Updated List of Coal Blocks," December 16, 2011, Ministry of Coal; Ministry of Coal,; PRS.
Nerad Malegaon, Maharashtra Gupta Metaliks and Power Ltd, Gupta Coalfields LtdSponge Iron
Lohari, Jharkhand Usha Martin LtdSponge Iron
Radhikapur East, Orissa Tata Sponge Iron LtdSponge Iron
Bijahan, Orissa Bhushan Ltd Sponge Iron
Seregraha, Jharkhand Arcelor Mittal Indian Ltd, GVK Power LtdPower
Durgapur-II/Sariya, Chhattisgarh DB Power LtdPower
Dumri, Jharkhand Nilanchal Iron and Steel Ltd, Bajran Ispat Pvt LtdSponge Iron
Moitra, Jharkhand Jayaswal Neco Ind. LtdSponge Iron
Marki Mangli-II, III and IV Blocks, Maharashtra Shri Virangana Steels Ltd Sponge Iron
Bhaskarpara, ChhattisgarhElectrotherm (India)
Sponge Iron
Dahegaon/Makardhokra-IV, MaharashtraIST Steel & Power Ltd Steel & Sponge Iron
Moitra, JharkhandJayaswal Neco LtdSponge Iron
Jitpur, JharkhandJindal Steel and Power LtdPower
Gondkhari, MaharashtraMaharashtra Seamless
Sponge Iron
Of the coal blocks that the IMG has recommended for de-allocation, until now the government has accepted the de-allocation of the following: Bramhadih block, Gourangdih, New Patrapara, Chinora block, Warora (Southern Part) block, Lalgarh (North) block, Bhaskarpara block, Dahegaon/Makardhokra-IV block, Gondkhari block and Ramanwara North block.  The government has accepted the deduction of bank guarantees for blocks such as Moitra, Jitpur, Bhaskarpara, Durgapur II/Sariya, Dahegaon/Makardhokra-IV, Marki Mangli II, III and IV, Gondhkari, Lohari, Radhikapur East, Bijahan and Nerad Malegaon. The letters issued by the government de-allocating coal blocks and deducting bank guarantees are available here.

For a detailed summary of the CAG Report, click here.

Tags: , , , , ,

Power situation in Tamil Nadu and other states

November 1st, 2012 4 comments

Reports suggest that the first reactor of the Kudankulam power plant is close to operational. With state discoms struggling, advocates of nuclear power see Kudankulam as a necessary boost to India’s struggling power sector.  The Kudankulam power plant will have two reactors.  At full capacity, the plant would produce 2 GW of energy, making it India’s largest nuclear plant, and significantly increasing India’s nuclear capacity (currently at 4.8 GW or 2.3% of  total capacity). Internationally, nuclear power plants contributed 12.3 % of the world’s electricity production in 2011.  In terms of number of nuclear reactors, India ranks 6th in the world with 20 nuclear reactors (in seven power stations across five states: Rajasthan, Uttar Pradesh, Gujarat, Karnataka and Tamil Nadu).  The Kudankulam power station would be Tamil Nadu’s second power station after the Madras Atomic Power Station (MAPS).

Tamil Nadu is struggling to meet electricity demand, recently moved the Supreme Court, asking the Centre for more power. Peak demand deficit (the difference between electricity supply and demand at peak periods) in the state was 17.5% in 2011-12.  The per capita consumption of electricity in the state was 1,132 kWh in 2009-10, significantly greater than the India average of 779 kWh.  Currently, electricity in Tamil Nadu is fueled by a mixture of coal (35% of capacity), renewable sources (42%) and hydro sources (12%).  A fully operational Kudankulam reactor would boost Tamil Nadu’s capacity by 6% (including state, private and centrally owned generating entities).

The interactive table below provides a state-level breakdown of key power sector indicators.  To view data in ascending or descending order, simply click the relevant column heading.  (For a detailed overview of the power sector and even more state-wise statistics, see here.)

Power statistics in the states

StatePer capita consumption, kWh (2009-10)Coal capacity, % of total capacity (Aug 2012)Nuclear capacity, % of total capacity (Aug 2012)T&D Loss, % of avl. electricity (2010-11)Peak demand deficit, % (2011-12)
Andhra Pradesh96750.131.6516.0614.80
Himachal Pradesh1,3803.640.9214.617.10
Jammu & Kashmir95212.583.2760.0125.00
Madhya Pradesh60254.622.9334.137.10
Tamil Nadu1,13234.942.9618.0017.50
Uttar Pradesh34875.082.4528.862.30
West Bengal55083.660.0023.540.90
Arunachal Pradesh4700.000.0035.602.50
All India77956.922.3023.7310.60


Source: Central Electricity Authority; Planning Commission; PRS.

Note: capacity for states includes allocated shares in joint and central sector utilities.

T&D (transmission and distribution) losses refer to losses in electricity in the process of delivery


Tags: , , , , , ,

N(I)AB-ing that environmental clearance

October 18th, 2012 3 comments

There has been much discussion about bringing the GDP growth on track and the need for expediting infrastructure projects in this regard. At the Planning Commission Meeting to approve the Twelfth Five Year Plan, last month, there were concerns about the  implementation of such  projects because of the delay in the grant of environment and forest clearances.

In this context, there has been talk of setting up a singular body that will grant approvals for large infrastructure projects. News reports suggest that the government is considering forming a National Investment Approval Board (NIAB). The NIAB will be responsible for expediting the clearances for mega project proposals above a certain financial threshold. The Board would be headed by the Prime Minister and will have the authority to provide the ‘final decision’ on investment projects. According to news reports, the NIAB will be the final decision making body. The Ministry of Environment & Forests (MoEF) has raised concerns that this would create ambiguity in the current process of granting clearance for projects. While the formation of the NIAB is still being deliberated and discussed, it would be relevant to understand the process that the MoEF follows before granting clearance to a project and look at data on number of clearances granted and pending.

The MoEF has developed certain processes to examine the potential environmental impact of new projects or expansion of existing projects. These are contained in the Environment Impact Assessment Notification, 2006. This notification empowers the Expert Appraisal Committees (EAC) to review the environmental impact of projects. The EAC carries out a combination of these steps depending on the classification of the project:

The MoEF considers the grant of environmental clearance to development projects in terms of the provisions of EIA Notification, 2006. From July 13, 2011 to July 12, 2012 the MoEF has given environmental clearances to 209 development projects. For a sector wise break up see Table 1.

Table 1: Number of Environment Clearances Accorded

Sector No.  of  projects
accorded EC
Industry (Steel & Cement)


Thermal Power


River Valley and Hydro-electric


Coal Mining


Non-Coal Mining


National Highways




Source: “Environmental Clearance accorded from 13.07.2011 to 12.07.2012”, MoEF

A total of 593 proposals are pending for environmental clearance as on August 13, 2012.[i]

It remains to be seen how the process of granting clearances as established by the MoEF will be reconciled with the expedited process of the NIAB.

[i] MoEF, Lok Sabha, Unstarred Question no. 637, August 13, 2012,

Tags: , , , , , ,

CAG Performance Audit on the Allocation of Coal Blocks

August 17th, 2012 No comments

The Comptroller and Auditor General (CAG) released a Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production, on August 17, 2012.  Some of the main findings and recommendations of the report are highlighted below:

A one-page summary of the main findings and recommendations can be accessed here.  The full report can be accessed on the CAG website.

Tags: , , , ,

Power producers refuse to sign supply agreements with Coal India

May 22nd, 2012 No comments

There has been no resolution so far to the issue of assured fuel supply from Coal India Limited (CIL) to power producers.  According to reports, while CIL released a model supply agreement in April 2012, so far only around 13 Fuel Supply Agreements (FSAs) have been signed.  Originally around 50 power units were expected to sign FSAs with CIL.  Power producers have objected to the model FSA released by CIL, particularly its force majeure provisions and the dilution of financial penalties in case of lower than contracted supply.


The adverse power supply situation has attracted greater attention in the past few months.  According to Central Electricity Authority’s data, the gap between peak demand and peak supply of power in March 2012 was 11 per cent.  The decreasing availability of fuel has emerged as a critical component of the worsening power supply situation.  As of March 31, 2012, there were 32 critical thermal power stations that had a coal stock of less than 7 days.  The gap between demand and supply of coal in the past three years is highlighted below:

Table 1: Coal demand/Supply gap (In millions of tonnes)
















Source: PIB News Release dated May 7, 2012

Read more…

Tags: , , , , , , , , ,