Coal news and updates

Power and coal have been among the most action-packed sectors in the first two years of the National Democratic Alliance government at the Centre. Fixing fuel supply even as the Supreme Court struck down previous coal mine allocations and bringing the distribution companies out of losses when they are heavily debt ridden were some of the challenges. Union Minister of State for Power, Coal and Renewable Energy Piyush Goyal, in an interview withShreya Jai and Jyoti Mukul, said the era of tariff increases is gradually changing to an era of possible reduction. Edited excerpts:

 

Is economic growth a concern for power demand and future investment in the sector?

 

The gross domestic product (GDP) growth will touch eight per cent this year. Next year, we will reach 10 per cent, hopefully. This is coupled with energy efficiency. In March 2016, overall growth in power generation was 11.3 per cent. Thermal generation grew 15.8 per cent. Hydropower is down from 8.6 billion units to 6.9 billion units because of a three-year drought. We made up for that by increasing thermal. Gas is up by 43.7 per cent because of innovative schemes with which we revived the gas-based power sector.

 

The Electric Power Survey conducted among states has lowered the power demand projections for 2022 to 239 Gw from 289 Gw earlier. How do you explain such a scenario?

 

The demand projection earlier did not anticipate the saving which will come from just one programme. We will get 22,000 Mw from one energy efficiency initiative (the LED programme).There are huge aggregate technical and commercial (AT&C) losses which are assumed to be given. They are expected to come down by nine per cent by 2019-20. Earlier, it was perhaps just 1.5 or two per cent. So, there is a difference between earlier trajectory and now.

 

The third factor is the efficiencies we have in systems like coal supply. Earlier, it was assumed that coal will be in shortage, so you needed more capacity. But now Sasan ultra mega power projects (UMPP) achieved 100 per cent plant load factor in April 2016. So now, we are encouraging people to run at higher rate. I have asked NTPC to ensure that their plants run at 90 per cent.

 

Where do you see power demand rising?

 

There are one crore agriculture pumps not connected to the grid. Very high efficiency pumps will replace these pumps and reduce diesel imports. We are looking at more uninterrupted power to replace diesel gensets. Some $2 billion of diesel is consumed by the telecom companies which would be connected to electricity. We have to think out of the box, bold and big. Like, can India think in terms of a 100 per cent domestic manufacturing of electric vehicles by 2030? Our own estimates should be a rolling plan. Certainly Uday will empower us to look at greater demand. We want India to be free from diesel gensets and completely run on grid and off-grid.

 

What kind of benefits you anticipate from higher plant load factor (PLF)?

 

If more capacity gets utilised, my cost will come down. If PLF goes up from 60 to 90 per cent, the cost of power comes down by Rs 1 a unit. My whole effort is to make power affordable and I'll give an example. Today people encourage industry by giving subsidy and tax waivers. I spoke to the Madhya Pradesh government, and said they should give low-cost power to attract industry. They currently give an incentive of Rs 0.5-1 a unit for incremental use of power. I asked them to change the thinking. You reduce Rs 1 in Rs 6. Imagine if we go to the US and ask them to invest in a state, and offer power at Rs 4 or Rs 3.5 for the next 10 years. We are now looking at giving a kick start to the Make in India programme through these kind of innovative measures. We will talk to all states and help them get cheap power.

 

We will have a back-to-back arrangement with the NTPC at a fixed price, provided distribution companies give it further for the benefit of industry and manufacturing. Imagine the benefits - job creation, increase domestic manufacturing, look at economies of scale, you can increase indirect tax collection like excise duty VAT, entry tax, professional tax and income tax on wages and salaries. The entire system benefits.

 

Power sector till now has seen cross-subisidisation. Will this mean an end to that era?

 

That will continue and I am the last person who will advise this. Farmers have small land holdings. Many are doing subsistence farming. Technology is outdated. They are monsoon dependent. Irrigated area is less. In such a situation, it is incumbent upon all of us to support farmers. We are committed to doubling the income of farmers in the next five years. Certainly, I don't think there is any room for stressing them with more power cost. And our Indian cost of power by itself is quite low. With Uday scheme (restructuring of debt in distribution sector), there will be a saving of Rs 1.8 lakh crore on cost of power annually from 2019-20 in a business as usual scenario. I see no reason to burden the farmers with any more cost.

Source: Business Standard