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Coal shortage: Gujarat buys Rs 150-cr worth of electricity daily to prevent power cuts; grim situation

The move comes as the high cost of imported coal and natural gas has adversely impacted the power supply situation in Gujarat, which currently has to manage without thermal and gas-fired power plants of 6,400-MW capacity.

Written by Avinash Nair | Ahmedabad |
Updated: October 12, 2021 10:43:32 pm
Gujarat, Gujarat electricity, Gujarat textile, Gujarat coal shortage, Covid-19, Gujarat, Gujarat news, Ahmedabad news, Indian express news, Indian expressAdani’s plant at Mundra and Essar Power’s plant at Salaya use imported Indonesian coal to fuel their plants. These power plants have stopped supplying power to Gujarat, after the prices of Indonesian coal doubled. (File)

Amid concerns of power supply constraints due to rising coal shortage, the state-run Gujarat Urja Vikas Nigam Ltd (GUVNL) is buying an estimated 100 million units of power daily from the power exchanges at a cost of Rs 150 crore to ensure there are no power cuts. The high procurement cost is expected to be passed on to the customers later through Fuel and Power Purchase Price Adjustment (FPPPA) charges.

The move comes as the high cost of imported coal and natural gas has adversely impacted the power supply situation in Gujarat, which currently has to manage without thermal and gas-fired power plants of 6,400-MW capacity. “We are buying 4,000-5,000 MW of power daily from the exchanges. This power costs us about Rs 15 per unit. So, daily we are purchasing about Rs 150 crore of electricity from the exchanges,” a senior official in the state government told The Indian Express Tuesday. The state currently buys electricity from the Indian Energy Exchange and the Power Exchange of India Ltd.

“The cost of imported coal has gone up by two-fold… Currently, we have only two options–load-shedding or buy the power and supply it to the consumers. Our government has disallowed the option of load-shedding. We have been asked to manage the power supply at any cost and in any condition,” the official said.

The purchase happens throughout the day as private power producers in the state have temporarily shut 4,000-MW thermal power plants fueled by imported coal. These private power plants belong to Adani Power (1,000 MW), Essar Power (1,000 MW) and Coastal Gujarat Power Ltd–a subsidiary of Tata Power (2,000 MW).

For Gujarat, which has been a power surplus state selling power to other states, the current situation, coupled with the coal crisis, presents a grim picture. The state has a 29,000-MW of power generation capacity of which 19,000-MW is conventional power (inclusive of 14,000-MW of thermal power), while the remaining is renewable energy. Though the peak power demand in Gujarat (during the summer months) exceeds over 18,000-MW, it is lesser at this time of the year.

“The current situation is stressful but we are managing. The amount of power that is being purchased depends on the day, weather conditions and temperatures,” the government official said.

To compound the issue, the prices of natural gas have risen, leaving gas-fired power plants of 2,400-MW non-functional. Furthermore, the state-run thermal power plants are functioning at 50 per cent capacity due to wet coal received from Coal India Ltd.

According to veteran energy expert KK Bajaj, electricity consumers in Gujarat should be ready to pay high FPPPA charges from January next year if the state government continues to buy expensive power. “GUVNL has no option other than to purchase costly power from exchanges as coal is not available for thermal plants. Lignite plants are operating at 20 per cent capacity and gas is not available for gas-based power plants. The power situation in Gujarat is grim as three private producers–Adani, Tata and Essar–have stopped generation from Mundra and Salaya plants. This is due to the steep increase in Indonesian coal prices that have jumped from Rs 8,000 per metric tonne to Rs 12,500 per metric tonne,” Bajaj said.

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