The monthly electricity budget of the aam aadmi may soon be in for a jolt, with the power ministry pointing out that jacked up prices of imported coal, coupled with deteriorating financial health of power utilities have lead to a rise in electricity generation costs by 30-35 paise per Kilowatt hour (kWh).
Stating that acute shortage of coal was unleashing a telling effect on power utilities, the ministry, in a note to the Group of Ministers (GoM) on coal on February 11, said that poor supply from Coal India has led to utilities increasingly importing thermal coal.
Imports have shot up to 23.2 million tonnes (MT) in 2009-10 as against 16 MT in 2008-09, the ministry said. Already, in 2010-11 (April-December period), due to short supply of coal, power companies have sustained a generation loss of 5.3 billion units.
This apart, the ministry of environment and forests’ (MoEF) concept of ‘Go’ and ‘No Go’ areas has upset projected coal production plans, the ministry said, pointing out that 26 coal blocks of power utilities were stuck up after being classified to be in the ‘No Go’ category, putting production of 660 million tonnes of coal production on hold.
Stating that resorting to imports had a tendency to increase global coal prices, the ministry said that due to surge in demand, prices of Australian coal have already shot up.
“Given the financial health of the electricity distribution companies in the recent months, power utilities are reluctant to import coal. The cost of power with 10-13 per cent blending of imported coal has, depending on the location, led to increase in power generation cost by 30-35 kWh.
In case of Farakka thermal power station, the power cost of West Bengal Power Development Corporation Limited, during the fiscal, has already gone up by 70 paise per kWh,” the ministry said. It further pointed out that the power utilities have already started urging that directions for import of coal may be reviewed, as the cost increase due to blending of imported coal has started impacting their operations and finances.
“Discoms have reported that due to blending of imported coal, the average per unit cost of power procurement having gone higher than average power purchase approved by the State Electricity Regulatory Commissions, there was under-recovery,” the power ministry said in the note.
The power ministry warned that the problem of coal shortage was likely to turn acute from 2011-12 in view of inadequate availability of coal from CIL and limitations in blending beyond 10-15 per cent of the total consumption. CIL officials had told the Planning Commission on January 27 that out of the total demand of 480 MT in 2011-12, they are in a position to supply only 319 MT.
Short supply
Stating that acute shortage of coal was unleashing a telling effect on power utilities, the ministry, in a note to the Group of Ministers (GoM) on coal on February 11, said that poor supply from Coal India has led to utilities increasingly importing thermal coal.
Imports have shot up to 23.2 million tonnes (MT) in 2009-10 as against 16 MT in 2008-09, the ministry said. Already, in 2010-11 (April-December period), due to short supply of coal, power companies have sustained a generation loss of 5.3 billion units.
This apart, the ministry of environment and forests’ (MoEF) concept of ‘Go’ and ‘No Go’ areas has upset projected coal production plans, the ministry said, pointing out that 26 coal blocks of power utilities were stuck up after being classified to be in the ‘No Go’ category, putting production of 660 million tonnes of coal production on hold.
Stating that resorting to imports had a tendency to increase global coal prices, the ministry said that due to surge in demand, prices of Australian coal have already shot up.
“Given the financial health of the electricity distribution companies in the recent months, power utilities are reluctant to import coal. The cost of power with 10-13 per cent blending of imported coal has, depending on the location, led to increase in power generation cost by 30-35 kWh.
In case of Farakka thermal power station, the power cost of West Bengal Power Development Corporation Limited, during the fiscal, has already gone up by 70 paise per kWh,” the ministry said. It further pointed out that the power utilities have already started urging that directions for import of coal may be reviewed, as the cost increase due to blending of imported coal has started impacting their operations and finances.
“Discoms have reported that due to blending of imported coal, the average per unit cost of power procurement having gone higher than average power purchase approved by the State Electricity Regulatory Commissions, there was under-recovery,” the power ministry said in the note.
The power ministry warned that the problem of coal shortage was likely to turn acute from 2011-12 in view of inadequate availability of coal from CIL and limitations in blending beyond 10-15 per cent of the total consumption. CIL officials had told the Planning Commission on January 27 that out of the total demand of 480 MT in 2011-12, they are in a position to supply only 319 MT.
Short supply
- In a note to the GoM on coal, the power ministry has said that thermal coal imports by power utilities have shot up to 23.2 million tonnes in 2009-10 as against 16 MT in 2008-09
- Jacked up prices of imported coal and deteriorating financial health of power utilities have lead to a rise in electricity generation costs by 30-35 paise per Kilowatt hour (kWh)
- In case of Farakka thermal power station, power cost during this fiscal has already gone up by 70 paise per kWh
- Ministry says that the problem of coal shortage will get more acute from 2011-12 in view of inadequate supply from CIL
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