Start mining activities or return coal blocks
Government will take back coal blocks bought by private players if they do not start mining activities within two years of purchase.
The ultimatum was given by Sushil Kumar Shinde, Union Minister for Power at the 3rd India Energy Summit recently organized together by the Ministry of Power, Ministry of New and Renewable Energy and the Indian Chamber of Commerce (ICC).
The Summit also brought out the need for having sustainable, clean and cheap power for the development of India. Speaking at the Inaugural session of the Summit, the Minister reiterated the Government’s position that access to electricity for all households and power demand was to be fully met by 2012 as per the National Electricity Policy announced by the Government.
Admitting that the main reasons for delay in commissioning of power projects during the 10th Plan was due to the delay in placement of orders, lack of manufacturing capacity of plants and lack of adequate regulatory controls, Shinde said that the development of the transmission network has to go hand in hand with generation.
National grid with an inter-regional transfer capacity of 20,750 MW has been established for optimization of resources and dispersal of power. This inter-regional capacity will be enhanced to more than 32,000 MW by the end of the 11th Plan. An investment of Rs. 75,000 crore is envisaged in the central sector and Rs. 65,000 crore in the state sector for transmission during the 11th Plan.
AK Balan, Minister of Electricity, Government of Kerela, said that Kerela considered electricity “as a tool for development with social justice, and not a commodity for profit.” The demand for power in Kerela is increasing sharply at 14% per annum. The detailed plan to meet this growing demand adequately includes using LNG. The LNG terminal at Kochi will help the expansion of Kayamkulam NTPC project to 1950 MW. The coal Ministry has allocated a coal block to Kerela in Orissa sufficient for a 1000 MW power project.
Highlighting the challenges that are plaguing the Indian energy sector, Vishambhar Saran, President ICC said that the poor quality of Indian coal, coupled with a lack of infrastructure to clean it, poses a major environmental threat. Although it is the world’s third biggest coal producer after the United States and China, India’s coal reserves could run out in forty years.
With a GDP of US$ 1.23 trillion, India is currently the world’s fourth largest economy in Purchasing Power Parity (PPP) terms (the GDP in PPP terms is estimated at approximately US$ 3.2 trillion) and the fifth largest energy consumer in the world. However, due to its high population of approximately 1.1 billion, the per-capita consumption of most energy related products is extremely low.
The per capita energy consumption is estimated to be a very modest 530 Kg of Oil Equivalent (kgoe) while the world average is approximately 1800 kgoe. Jayanta Roy, Sr VP, ICC, voiced the industry’s concern on India’s growing dependence on oil imports in the current market scenario of volatile prices. India now imports about 65% of its petroleum. Roy said that India’s limited domestic gas reserves spell a need for foreign dependency in this sector as well.