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Power SOS: Coal running out in 70 units

Power ministry sounds alarm: 26 plants in 'super critical' state,with just 7 days stock.

The power ministry has rung alarm bells saying shortage of coal has pushed 26 power plants into “super critical coal stock positions” — having stocks of barely seven days. And 44 are “critical,” with stocks for 15 days.

It has sought the Committee of Secretaries’ (CoS’s) intervention to secure coal supplies to ensure uninterrupted power generation. In a note to Cabinet Secretary Ajit Seth last week,the ministry said state-run Coal India Ltd (CIL) registered negative growth of about 1.2 per cent during April-October 2011. Its target for coal despatch to power utilities during April-November 2011 was 221 million tonne (MT) but its actual supply was 192.5 MT.

Last March,CIL was told to ensure supply of 410 MT but it said it could supply only 347 MT.

“As coal supply is falling short of the target,generation losses have been reported by these companies. The loss sustained by them was to the tune of 10.9 Billion Units in 2008-09,14.5 BUs in 2009-10 and 7 BUs in 2010-11. During April-November period coal-based generation was 370.8 BUs against a target of 375.1 BUs,” the power ministry said.

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Due to the supply shortage,coal imports have been rising. During April-November 2011,19.8 MT coal was imported. In addition 10.6 MT was sourced by utilities themselves.

Also,CIL has not inked any Fuel Supply Agreements (FSAs) for plants commissioned after March 2009 and supplies are being done through ad-hoc means. The company is pushing for FSAs lasting only five years and with a trigger level of only 50 per cent as against the usual norm of 85 per cent,“which is awfully inadequate for utilities having Power Purchase Agreements (PPAs) for 25 years,” the ministry said. While the Central Electricity Regulatory Commission’s tariff regulations provide for recovery of full capacity charge at 85 per cent Plant Load Factor subject to availability of the fuel,but most of the PPAs of developers linked to CIL provide for escalation of fuel charges based on WPI Index of domestic coal at notified price.

So it would not be a pass through for them even if they sourced coal through e-auction. “As a result developers are likely to default in supply of power as per the PPAs,default in payment to the banks/FIs due to non-recovery of capacity. This has also led to banks now insisting on signing of FSAs before disbursal of even the sanctioned loans,” the ministry said. It cited Damodar Valley Corporation and NTPC have reported that coal firms are either delaying or not signing coal supply MoUs with them. The ministry said MoU for fuel supply to Koderma (500 MW) of DVC and Sipat (660 MW) and Korba (500 MW) of NTPC is yet to be signed,while MoU for Durgapur Steel TPS of DVC,Farakka and Kahalgaon TPSs of NTPC have been inked,but coal supply is yet to commence.

First published on: 21-12-2011 at 12:55:30 am
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