The Coal Ministry has fixed a cap on the power capacity beyond which it would not supply coal during the 12th Plan (2012-17) due to scarcity of coal, say CNBC-TV18 sources. The former has also asked the power ministry to check on industry expansion plans during the period.

Earlier, the Planning Commission had asked Coal India, the largest coal producer in the country to sign Fuel Supply Agreements with power firms to ensure sufficient supply of dry fuel even if the coal miner has to import it. A FSA is a document that contains provisions for incentives for meeting commitments and penalties in case of failure

It may also be recalled that the Planning Commission had earlier said it is likely fix a target for about 1,00,000 MW of capacity addition in the power sector in the 12th Plan (2012-17).

The demand supply gap for coal, which stood at 84 million tonnes last fiscal, is likely to touch 142 million tonnes in the current financial year.

Coal India, which accounts for over 80% of domestic coal production, has scaled down its production target for the current fiscal to 440 million tonnes from 452 million tonnes. The public sector firm missed its production target last fiscal and produced 431.325 million tonnes of coal against the revised target of 440.20 million tonnes.

(Sourced from CNBC-TV18)