The Centre has directed Coal India to supply coal out-of-turn to State and PSU utilities, a move that has irked independent power producers (IPPs) that are already reeling under a shortage of the fuel.
“ln order to avoid possible shortage of coal at thermal power plants it has been decided that wherever it is operationally feasible based on various factors like coal stock availability, where suitable transport arrangements are in place, out-of-turn coal allotment may be made to State and central PSU gencos to meet the surge in coal requirement for power generation,” the Coal ministry wrote in a letter to Coal India.
IPPs, which are under stress on account of high levels of debt and less than optimum plant load factors that have left them struggling to keep the projects afloat, are not amused.
‘Sanctity of contracts’
“Discrimination based on ownership of assets puts into question the sanctity of commercial contracts signed by CIL,” said Ashok Khurana, director general, Association of Power Producers (APP) . “This would lead to more stress for the bankers. This is against the PM’s stated policy of level playing field and ease of doing business.”
The APP has written to the government seeking a level playing field. “We have requested that same priority should be extended to private sector plants. In fact prioritisation beyond contractual obligation should be on basis of efficiency, so that same quantity of coal can produce more power,” Mr. Khurana said.
While state-owned NTPC currently operates at a plant load factor (PLF) of more than 70%, IPPs are averaging about 55% PLF. The scramble for scarce coal has coincided with summer when demand for power is setting new records. This week, India’s electricity demand crossed 170 gigawatts.
“Centre creates hurdles for coal starved power projects by prioritising PSU run projects,” the CEO of an IPP, said on condition of anonymity. “It will take a heavy toll on the ailing sector.”
Published - May 25, 2018 10:48 pm IST
