Uttar Pradesh based thermal power producers have junked plans to import coal for their projects amidst raging coal supply constraints across India.
The twin factors of higher cost of imported coal and the consequent impact on the state energy prices forced the public and private producers to drag their feet on the contentious issue.
The landed cost (including price, handling and transportation costs) of imported coal is estimated to be more than Rs 17,000 per tonne compared to Rs 3,000 per tonne for the commodity supplied by Coal India Limited (CIL).
The state energy price was likely to upsurge by nearly Re 1 per unit if 10 percent imported coal was mixed with the domestically supplied inventory.
Meanwhile, power consumers’ rights activist Avadhesh Verma thanked chief minister Yogi Adityanath to firmly decide against the proposed coal import although the union power ministry was pushing for the same.
He claimed the state thermal power plants, including those operated by state utility UP Rajya Vidyut Utpadan Nigam (UPRVUN), would have collectively incurred an additional financial burden of nearly Rs 11,000 crore with imported coal blending.
Recently, UP Power Corporation Limited (UPPCL) had also written to the power generating companies to seek prior permission before contracting for coal import.
“The state government does not want to hike energy prices at this juncture and stoke anger among consumers,” according to sources. Interestingly, UP energy prices are among the steepest in the country
Meanwhile, the state has decided to procure electricity even at a much higher rate of Rs 12 per unit from energy exchange if required to make up for shortfall in energy generation following inadequate coal inventory with power units.
UPPCL has been working on two pronged strategies to overcome power crisis – through rostering (power supply schedule) and procuring additional power from exchange.
This year, the state power demand has already exceeded 25,000 megawatt (mw) although the rainfall and dust storm over the past few days has plummeted demand by almost 25 percent.
Earlier, All India Power Engineers Federation (AIPEF) chairman Shailendra Dubey had urged the union power ministry to withdraw its April 28 directive to the state power generating companies to import 10 percent coal to overcome coal supply shortfall.
In a letter to union power minister R K Singh, Dubey had underlined that if states were forced to import coal then the Centre should bear the additional cost burden on the already distressed power distribution companies (discoms) as also power consumers.
“The present coal shortage is the combined result of a number of policy errors of the central government with the shortage made worse due to shortage of railway wagons,” Dubey alleged.
The central decision to funnel away the accumulated revenues of the Coal Indian Limited (CIL) – Rs 35,000 crore in 2016 – had crippled the development of new mines and augmenting the capacity of existing mines, he claimed adding had the surplus been ploughed back into the coal mine sector, the present shortage would not have occurred.