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The price revision by Coal India Ltd (CIL) will increase electricity tariff by 5-10 paise per unit.
Beginning today, CIL has rationalised prices of thermal coal used in power generation.
Prices of two premium grade (G-3 and G-4) coal were reduced by 12 per cent. The price of G-5 grade remains unchanged. And, prices of all inferior grades from G-6 to G-17 (2200-5800 kilo calorie per pg) were raised by 10 per cent, on an average.
According to sources, the generation cost of NTPC, one of the most cost-efficient power producers of the country, may move up by 5-6 paise per unit.
While NTPC plants enjoy the fruits of better techno-economics, state electricity boards having a fair share of the country’s old power stations may witness a relatively higher increase in generation cost.
West Bengal’s state power generation utility, for example, expects 8-10 paise impact per unit. This is irrespective of the fact that the company will benefit from the price reduction on premium grades for 20 per cent of total fuel consumption.
Captive sector hit
Captive power generation in steel, cement, aluminium and many other energy intensive sectors will get costlier, as thermal coal is sold at 35 per cent higher price (when compared to the regulated power sector) to sectors enjoying the benefit of market determined product pricing.
According to Subhasri Nandi, Secretary General of Coal Consumers’ Association of India (CCAI), a quick estimate suggests generation cost of captive power units may go up by as much as 22 paise a unit. “Power consumers by and large using the inferior quality of coal will be adversely affected by such revision… It would affect specially the non-power utilities, already paying 35 per cent more (price for fuel) than the power sector,” she said.
The consumers of the Nagpur-based Western Coalfields Ltd will be the worst hit. Western Coalfields will enjoy approximately 10 per cent higher price (for lower grade coal) when compared to the other CIL subsidiaries.
WCL produced approximately 42 million tonne of coal, nearly nine per cent of CIL’s annual production, in the last fiscal.
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