Relief to Gencos as MoP withdraws imported coal blending orders

File photo for representation.

File photo for representation. | Photo Credit: RAGHUVIR SRINIVASAN

In a huge relief to generating companies having domestic coal-based power plants, including those in the public sector such as State Gencos, the Ministry of Power (MoP) has withdrawn with immediate effect its May 26 order in which it had directed the power plants to blend domestic coal with imported coal.

As per its May 26 order, the directions were applicable till March 31 next to overcome the coal shortage. It was issued when coal-based power plants in the country were facing huge shortage of coal following high surge in demand for energy. The direction was to blend at least 10% imported coal in the plants’ consumption and place the orders for import of coal by sending the details to the Ministry.

Further, it was stipulated that if the Gencos did not place orders for import of coal for blending by May 31 and the ordered coal failed to start reaching the power plants by June 15, the defaulter Gencos would have to import higher quantity of coal so that blending goes up to 15% in order to meet the shortfall.

However, Telangana Genco having 4,043 megawatt thermal (coal-based) generation capacity with average consumption of 50,000 tonnes of coal a day did not bite the bullet to go for coal imports as the State Government took a firm stand against importing coal, whose price was ranging above ₹24,000 a tonne, against about ₹4,000 a tonne for the domestic coal.

All the power plants of TS-Genco have coal linkage with Singareni, a company owned by the State Government in which the Centre too has 49% shareholding, and the import of coal for blending which could have been about 7,500 tonnes a day would have been a huge burden on it. The additional burden would have been ₹15 crore a day as the price of imported coal was six times the cost of domestic coal price for its own plants.

Besides, the Genco has long-term and medium-term power purchase agreements with 1,200 MW capacity Singareni thermal power plant owned by Singareni and the Sembcorp Energy, respectively. The MoP, however, stated that the power plants which have imported coal as per May 26 orders till the issue of this (August 11) orders shall utilise in accordance with the methodology given in the May 26 order.

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Printable version | Aug 13, 2022 10:43:49 am |