Coal news and updates

Power sector idling capacities

he thermal power sector is no longer complaining about chronic short supply of fuel, chiefly coal. Instead, it is idling capacities now.

The reason: Not insufficient demand, but the inability of power distribution utilities to pay remunerative rates for the generated electricity.

Recently, NTPC, the country’s largest generation utility, reported a drop in plant load factor (PLF) due to idling of nearly 5,000 MW capacity (including 2,000 MW of gas-based and 3,000 MW of thermal power).
Low coal off-take

Coal miners are saying at least five state utilities — in Maharashtra, West Bengal, Rajasthan, Odisha and Gujarat — have reduced coal off-take substantially, indicating lower utilisation of thermal power capacities. While the lower demand for coal from Odisha is partly linked to a good rainfall and higher availability of cheaper hydro-electric power, West Bengal and Gujarat have scaled down generation due to lower export opportunity at remunerative tariffs, sources say. Unlike the rest of the country, West Bengal, Gujarat and Chhattisgarh have financially sound distribution utilities.

While Chhattisgarh is the thermal power generation hub of the country, West Bengal and Gujarat had taken early steps in ensuring adequate supply.

According to a senior official in Chhattishgarh, the State has scaled down electricity purchases from private utilities due to lower demand.

West Bengal reported a fall in PLF in its own generation utilities — from 72 per cent to 66-67 per cent. This is despite an eight to nine per cent growth in peak consumption this year.

The state prefers to pay fixed charges to NTPC rather than taking delivery of nearly 1000 MW of allocated power and exporting the same through the national grid, due to lack of demand from other states.
Restricting supply

“The average pooled price of electricity (including 1,200 MW of central allocation) is Rs 3.60 a unit. But, if we try to trade the entire surplus power on grid, it may bring down the grid tariff from Rs 3 a unit (round-the-clock average) to Rs 2 a unit or even lower,” a source in the West Bengal distribution utility told .

The indication is clear: West Bengal can supply no less than 15,000-20,000 million units of energy to the national grid. However, to ensure remunerative return on export it is restricting grid supplies at 4,000-5000 million units.

West Bengal is not alone. “A rough estimate suggests West Bengal and Gujarat together are restricting supply of nearly 30,000 million units to the grid to prevent a crash in grid tariff,” another source told Business Line. Officials in Gujarat were not available for comment.
 

Source: The Hindu Business Line