Demand soaring: ‘Tolling’ on the table as imported coal prices heat up

On April 7, the electricity shortage rose to 80.1 million units, with the country being short of 6,124 MW of generation capacity during peak demand.

In a repeat of the post-monsoon shortage seen last October, high global prices have led to greater demand of domestic coal for power supply from thermal stations. (File)

The Centre may soon ask states to use tolling to allow other thermal power plants to utilise their coal linkages and transmit power to reduce the need to transport coal, as per a senior government official.

In a repeat of the post-monsoon shortage seen last October, high global prices have led to greater demand of domestic coal for power supply from thermal stations. Rising demand for power due to the onset of the summer season as well as the post-Covid economic recovery is also putting pressure on thermal plants. This has led to supply concerns. States, including Andhra Pradesh, Madhya Pradesh, Telangana, Punjab and Bihar, have already faced blackouts as a result of the crunch. On Friday, 72 plants that utilise domestic coal had 22.7 million tonnes of coal, or 37 per cent of normative stock levels, with 72 plants classified as having critical levels of coal inventory.

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On April 7, the electricity shortage rose to 80.1 million units, with the country being short of 6,124 MW of generation capacity during peak demand.

Union Power Secretary Alok Kumar told The Indian Express that the Centre may soon advise states to opt for “tolling”, under which states “can give coal to some other plant through competitive bidding” where power can be generated and transmitted to the state with the original coal linkage. Kumar added there was no shortage of domestic coal but that logistics for coal delivery were designed for “a certain amount of imported coal”. He added the Ministry was working with Railways to maximise coal dispatches.

NTPC and DVC have started importing coal to supplement domestic coal requirements through blending in line with a circular issued by the Centre.

Kumar said the Centre was also in talks with imported coal-based power plants and discoms relying on power from such plants to restart operations. He said about 10,000 MW of the 17,000 MW of imported coal-based power generation was operational. A key concern for such plants has been the ability to pass through the higher cost of imported coal to discoms under Power Purchase Agreements.

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thermal power plants

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