Economy

CPPs urge govt to restore full coal supplies

Shobha Roy | | Updated on: Dec 21, 2021

The ICPPA has urged for earmarking at least 50 rakes per day for the NRS sector to enable optimum materialisation

The Non-Regulated Sector consisting of Captive Power Plants has urged the government for normalisation of coal supplies at the earliest. Currently, CPPs claim they have not even been getting 30 to 40 per cent of their committed supply.

According to Rajiv Agarwal, Secretary-General, Indian Captive Power Producers Association, there are plans to ramp up the average coal stock position at thermal power plants to close to 30 days by March 2022, up from 11-12 days’ stock in early December.

‘Sector struggling’

“We are getting feelers that the government wants to build 30 days’ stock at power plants by March 2022. In April-May, production (of coal) is usually slightly impacted and post that there will be rainy season. So the CPPs will face a tough time if 100 per cent normalisation in supplies do not happen,” Agarwal said. The ICPPA has urged for earmarking at least 50 rakes per day for the NRS sector to enable optimum materialisation. It has also asked for immediate resumption of coal supply against linkages.

In November, out of total 272 rakes per day, the power sector was supplied with 255 rakes, while NRS was provided only 17 rakes against the actual requirement of 50. The proposed plan for December envisages just 26 rakes for NRS, possibly leading to a huge coal deficit through rail mode.

“The NRS sector is struggling to retain cost-competitiveness and sustainable industry operations due to the non-equitable treatment when compared to the power sector, specifically with regards to allocation, coal linkages, railway rakes, materialisation, coal pricing,” he said.

The association has further asked for allocation of coal dispatches through rakes in proportion of 75 per cent (power) and 25 per cent (non-power), as per the Coal Ministry circular for auction linkage, dated February 15, 2016.

“Despite the allocation, the NRS sector is getting less than 20 per cent of coal. Moreover, NRS consumers must pay 20 per cent higher price over the notified coal price for the power sector, leading to differential coal pricing for different coal consumers,” he said.

CIL allays fears

ICPPA has said any decision for stopping or curtailing secured coal supplies should not be taken on ad hoc basis and the NRS should be given prior notice well in advance (one-to-three months) to devise mitigation plan with respect to coal or power imports.

However, allaying fears of a possible short supply, Coal India Ltd (CIL) said it was carrying a stock of around 31.5 million tonne (mt) at its pitheads which will scale up further in Q4 providing adequate buffer to meet the demand of NRS.

Even while rushing supplies to power sector, coal despatch to NRS customers grew by around two per cent during April-November at 81.2 mt over same period last year. This is almost 14 per cent higher compared to 2019.

“Despatch to NRS customers has improved to 3.11-lakh tonnes a day in December from 2.71-lakh tonnes in October. Average loading during the referred period also went up to 24.4 rakes a day against the loading of 14.4 rakes in October. CIL is committed to systematically resolve the supply issues of NRS customers,” a senior company official said.

Published on December 21, 2021
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