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Monday, December 06, 2021

Blending of imported, domestic coal may increase electricity cost by 30% in Punjab: Power engineers’ federation

Private generators are not covered under the CAG audit and they can manipulate the increase in tariff with the help of forged documents.

By: Express News Service | Jalandhar |
Updated: October 29, 2021 12:27:56 am
All India Power Engineers Federation, AIPEF, RK Singh, power minister, domestic coal, coal, importThe AIPEF also raised concern that there were two aggravating factors — one, the global prices of coal have increased which would make import a costly option and second the coal production in India has stagnated in the past three years while the demand has increased every year. (Reuters File Photo)

The All India Power Engineers Federation (AIPEF) in a letter to Union Power Minister, RK Singh, on Thursday, has expressed concern that electricity costs may increase by at least 30 per cent due to the blending of imported coal with domestic coal.

VK Gupta, spokesperson of the federation, in a press release, said, “The Union Ministry of Power has advised all coal-based thermal generating stations to maintain adequate coal-stock according to their obligations. In the case of domestic coal shortage, the generators can blend the imported coal up to 15% domestic coal to meet the increased power demand in the country.”

“For a load centre thermal stations say in Punjab, the landed cost of Indian coal is ₨ 5150 per tonne with gross calorific value (GCV) of 4000. The landed cost of imported coal is around  ₨ 22000 per tonne with  GCV of 5500 . The blending of 15% imported coal will increase the per-unit cost of electricity from Rs 3.22 per unit to Rs 4.37. State discoms, which are already facing a financial crunch, will not be able to afford this price increase,” Gupta added.

Further, he said that private generators are not covered under the CAG audit and they can manipulate the increase in tariff with the help of forged documents.

The AIPEF also raised concern that there were two aggravating factors — one, the global prices of coal have increased which would make import a costly option and second the coal production in India has stagnated in the past three years while the demand has increased every year.


The power engineers’ federation further urged the Central government to take steps to increase coal production to ensure that the crisis is not repeated next year. There are instances, they said, when specific stations did act to build up required coal stocks before the start of the monsoon season this year.

Independent power producers,  who have contracts of 25 years at fixed rates for each year, must be directed to ensure an adequate supply of coal stock to supply power as per the bid rate contained in their Power Purchase Agreements.

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