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Govt asks states to ensure adequate coal stocks as power demand surges
Union power ministry also made it clear that the supply of coal to gencos will only be made on a proportional basis.
New Delhi: As the demand for electricity spiked amid soaring temperature, the government on Saturday asked all states, Union territories and electricity generating companies (gencos) to ensure adequate coal stocks and timely turnaround of the mineral’s supply (unloading from railway rakes).
Owing to a continuing shortage of coal due to its record high prices in the wake of Russia’s invasion of Ukraine, the Union power ministry also made it clear that the supply of coal to gencos will only be made on a proportional basis.
“The procurer and sellers are legally bound by the PPA (power purchase agreement) signed by both parties. While the procurers are bound to pay the bills timely, the gencos (sellers) are bound to maintain adequate fuel stocks and offer availability as per PPA,” the ministry said in a circular issued on Saturday. “Not maintaining adequate fuel stocks or not giving availability on any pretext (such as the high price of imported coal etc) is inexcusable.”
The circular, a copy of which HT has seen, further said such conduct on the part of a seller should be immediately responded to by the procurer sternly by using all possible contractual and other available legal interventions at the level of state government.
“If any gaming is noticed on the part of the seller, such as not supplying electricity under PPA and selling in the market, it should be brought to notice of the regulatory commission without any delay under intimation to the ministry of power for immediate intervention,” it added.
With mercury soaring, the ministry has projected this year’s peak electricity demand to touch 215,000 MW (megawatt) and to meet the same, the government has asked gencos to import about 9 million tonnes of coal for blending at thermal power stations, Union power secretary Alok Kumar had told HT last month.
The power ministry also said that domestic supply will be made proportional to the coal received from CIL/SCCL for all gencos and it will not be possible to give more coal other than on proportionate basis to make up any shortfall.
The country witnessed its highest ever peak power demand of 200,570 MW on July 7 last year. This year, the record is set to be broken again, Kumar said, adding that ensuring adequate coal stocks at power stations will be a key challenge.
India has been reeling under a coal crisis, which aggravated between October and November last year owing to extended monsoons and an increase in the demand for domestic coal over expensive imported coal. The crisis triggered power supply issues in several states and UTs such as Delhi, Maharashtra and Gujarat where distribution companies (discoms) had to resort to scheduled power cuts.
The circular also mentioned certain actions to be taken on priority to enhance the supply of domestic coal. Firstly, production in captive coal mines allotted to power plants may be maximised to the limit permitted by the ministry. Secondly, it has been decided that a lesser number of rakes would be made available to such power plants where there is slackness in prompt unloading of coal. This step has been taken to maximise the utilisation of available railway rakes and it may be monitored at the state government level.
“It has been reported that several power plants are taking much longer than the norm in unloading coal from railway rakes, which is affecting the turn-around time,” the circular stated, adding that the central electricity authority (CEA) has been asked to monitor the unloading time at power plants.
Thirdly, many generating companies have overdue (for coal companies) running in several hundred crores of rupees. Such a huge overdue amount affects the ability of coal companies to continue the supply, the ministry said in the circular. “Therefore, the bills of coal companies must be paid in due time so that coal supplies to such generating companies are not affected on this account.”
The ministry also said that necessary action may be taken to import coal in a transparent and competitive manner for blending purposes based on the demand assessment and to deal with any shortfall of coal availability. It also asked gencos to bundle conventional power with renewable energy.
