Domestic Coal Substantially Cheaper for Power Generation than Imported Coal

Delhi, March 21, 2012: The cost of domestic coal used for power generation is substantially cheaper as compared to the cost of imported coal. This was stated in rajya sabha the other day by Pratik Prakashbabu Patil, the union minister of state for coal in response to a member question from Parimal Nathwani.

He said some quantity of coal had to be imported by the power utilities due to lesser availability of indigenous coal vis-à-vis its estimated requirement for power generation in the country.

Patil informed that the government had switched over from the existing UHV (Useful Heat Value) based grading and pricing of coal to GCV (Gross Calorific Value) system from 1st January 2012. In the new mechanism, the coal’s classification is done on the basis of GCV into seventeen bands with 300 Kcal/kg each; he added.

The coal India Limited reviewed and revised the issue of coal pricing by taking into account the weighted average price of the band. Since the revenue neutrality and existing price is by and large maintained and ensured to the extent possible, no impact of switch-over to GCV was likely on power, cement and steel sector; the minister said.