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Consumers of captive power complain of coal supply cuts

(02 Oct 2018)

Captive power consumers, who primarily run their electricity generation units to cater to own industrial production demand, have expressed dissatisfaction over the government’s recent move of prioritising power production utilities and central government companies for loading railway rakes for coal transportation. The decision was taken in a meeting chaired by rail and coal minister Piyush Goyal on September 22, held in the wake of acute shortage of coal in power plants. “We are committed to ensuring an uninterrupted supply of coal to power plants to meet the needs of the growing economy,” the minister had said on Twitter after the meeting.

Captive power plant producers, which traditionally bear the brunt of coal shortages in other sectors, have repeatedly been writing to the central government about the issue. While seeking resumption of regular coal supply in May, the industry had told the coal ministry and the Prime Minister’s Office (PMO) that curtailing fuel supply to captive units would compromise operations of about 28,000 MW of generation capacity, and in turn, jeopardising production in the aluminium, steel, fertiliser, cement and other sectors.

The Aluminium Association of India had also written to the PMO in August about critical coal shortage.  “Such moves jeopardise the government’s ‘Make in India’ and other such initiatives taken up to bring in ease of doing business in the country,” said Rajiv Agarwal, secretary general, Indian Captive Power Producers Association.

Supply by Coal India (CIL) to the non-power sector in the first five months of FY19 remained stagnant year-on-year at 50 MT.

Simultaneously, coal allocated for this sector under the e-auction route, where price can rise as much as 70% over the notified amount, has been increased more than ten times to 3.47 MT.

Though CIL has increased its dispatch to the power sector by 12% year-on-year to 197 MT in the first five months in FY19, 19 power plants had coal stock for less than seven days on September 27.

Analysts at India Ratings, while maintaining its negative outlook for the thermal power sector, recently said the coal supply issue arising from inadequate railway rakes to ferry the fuel remains one of the crucial challenges to the thermal power sector.

News Source : Financial Express