International price of coal has increased, currently at 140 US Dollars per tonne (File)
Highlighting that the demand for power has gone up by almost 20 per cent in energy terms, the Ministry of Power on Thursday ordered all imported coal power plants to operate at full capacity.
Looking at the emergency situation, the Union Ministry directed all States and all generating companies based on domestic coal to import at least 10 per cent of their requirement of coal for blending.
In an official order by the ministry, it read, "The demand for power has gone up by almost 20 per cent in energy terms. The supply of domestic coal has increased but the increase in the supply is not sufficient to meet the increased demand for power. This is leading to load shedding in different areas. Because of the mismatch between the daily consumption of coal for power generation and the daily receipt of coal at the power plant, the stocks of coal at the power plant have been declining at a worrisome rate."
"The international price of coal has gone up in an unprecedented fashion. It is currently around 140 US Dollars per tonne. As a result of this, the import of coal for blending, which was of the order of 37 Million Tonnes in 2015-16 has gone down, leading to more pressure on domestic coal."
"The imported coal-based generation capacity is around 17,600MW. The PPAS for imported coal-based plants do not have adequate provision for pass-through of the entire increase in the international coal price. At the present price of imported coal, running of imported coal-based plants and supply of power at the PPA rates will lead to huge losses to the generators and therefore the generators were not willing to run those plants," it read.
"All imported coal-based power plants shall operate and generate power to their full capacity. Where the imported coal-based plant is under NCLT, the Resolution Professional shall take steps to make it functional," read the order copy.
In order to ensure that all power plants based on imported coal start functioning, the States have been advised that the price of coal should be a pass through. Most states have done that and about 10,000 MW out of 17,600 MW of imported coal-based generation capacity has started operating. However, some imported coal-based capacity is still not operating, the ministry said.
The plants are have been told to first supply power to power purchase agreement (PPA) holders and sell surplus to power exchanges. If generators/group cos own coal mines abroad, mining profit is to be set off to extent of shareholding, the statement said.
PPA holders shall pay generating co on weekly basis, either at benchmark rate or mutually negotiated rate, it added. If discoms/states are unable to buy power, either way, it will be sold in power exchange
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