Power cost to soar as Haryana moves to purchase imported coal

The cost of electricity generation in Haryana is set to escalate with the Haryana Power Generation Corporation Limited (HPGCL) ordering the purchase of about 9

The cost of electricity generation in Haryana is set to escalate with the Haryana Power Generation Corporation Limited (HPGCL) ordering the purchase of about 9.04 lakh metric tonnes (MTs) of imported coal to tide over the coal shortage in the state.

MEGHALAYA,INDIA - APRIL 30: Laborers load a truck with coal at coal depot in Jaintia Hills, Meghalaya in India on April 30, 2014. Indian government announced in September that it would double the coal production to one billion tons over the next four years to ease the ongoing power shortages. (Photo by Kuni Takahashi/Getty Images) (Getty Images)

The purchase of expensive imported coal is being done as the Union power ministry in April had advised the power generation companies to use imported coal for blending purposes to the extent of 10% instead of 4% to enable stocking of coal at power plants as per the revised stocking norms.

Imported coal to be bought at $189 per MT

“The HPGCL has accepted the bid of Mohit Minerals Ltd for supply of 9.04 lakh MT imported coal as the cost, insurance and freight (CIF) price of $189 per MT. About 4.30 lakh MT will be used for blending at Khedar Thermal Power Plant in Hisar, 2.50 lakh MT at Panipat Thermal Power Plant and 2.24 lakh MT at Yamunanagar Thermal Power Plant,” said a power official, asking not to be named.

Centres pushed states to procure imported coal

The Union power ministry in December 2021 had told the states that due to increased demand and consumption of electricity, the share of coal-based power generation has increased since July 2021. As a consequence, the coal consumption at power generating units has increased but the coal supply from subsidiaries of Coal India Ltd was not commensurate with the requirement of thermal power plants. “Therefore, the coal stock available with power plants is low. Accordingly, the states are advised to procure imported coal for blending during 2022-23 to avoid depletion of stocks to critical level,’’ the central ministry wrote.

State Power officials said the Union power ministry estimated that the imported coal requirement for three thermal plants of HPGCL, at 4% blending with 85% plant load factor, at about 3.62 lakh MT. However, in April, the Centre advised the state generation companies and independent power producers to use imported coal for blending purposes to the extent of 10% instead of 4%, as this will ensure adequate coal stocks at the thermal power plants as per the advised coal stock norms.

“The state government was also asked to expedite the procurement process of getting imported coal so that power plants get the stock by June end. Accordingly, the revised requirement of imported coal for our thermal plants was worked out to 9.04 lakh MT,” another power official said.

Worry on account of domestic coal

The state government is also anxious regarding the purchase of domestic coal through road cum rail (RCR) mode. The HPGCL is buying 4.50 lakh MT of domestic coal which will be transported from coal mines in Ranchi and Singrauli through road cum rail (RCR) mode. The apprehension is that it is difficult to ensure quality control of coal transported through the RCR mode. “For instance, most of our coal mines are located about 30-35 kilometres from the railway goods shed sidings. This means that coal consignments would have to be dispatched by road for this distance. “It is very difficult to ensure that the coal of a certain calorific value sent from the coal mine reaches the railway siding as local transporters and mafia substitute the consignments with coal of low calorific value,’ said an official.