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AUG 07 2012

Coal price pooling: CEA favours 15-20% blending

  • Economic Times, ET Bureau / Hyderabad
  • Created: Tue 07th AUG 2012

Fuel costs may rise Rs 87-105/ tonne

For pooled pricing of coal, the Central Electricity Authority (CEA) has proposed blending up to 20 per cent of the committed coal quantity with imports.

The CEA has proposed this in a strategy paper. The paper is being discussed by all the stakeholders.

The modus operandi has been planned keeping in mind that Coal India would supply up to 80 per cent of Letter of Assurances (LOA) and power producers will have to accept imported coal. Coal India would be responsible for importing coal.

The power units situated up to 300 km from the coast (port) will have to blend imported coal up to 20 per cent of committed coal quantity. Other non-coastal, non-pit head and pit head units, where transportation of coal is a major constraint, will have to blend up to 15 per cent.

Rest of the power stations would not physically receive imported coal.

“Since the cost of imported coal is higher than domestic, every user would pay incremental charge per tonne on domestic coal to compensate for increased quantity of imported coal required to be used by coastal and non-pithead, non-coastal units,” said a Power Ministry official.

The additional cost of imported coal is to be recovered from all power plants receiving domestic coal, the official explained.

The identified power plants would get imported coal at Gross calorific value (GCV) parity price of indigenous coal, which is Rs 4,500 for every tonne of GCV of 6,300 kcal/kg.

According to estimates made by CEA, considering the transportation of 16 million tonnes coal to coastal stations over 200 km and 4 million tonne to non-pit head, non-coastal stations over distance of about 800 km, the price increase would be in the range of Rs 87-105 for each tonne.

This would result in increase of electricity generation cost by about 6-7 paise for every unit.

The Government is pushing for a pooling strategy as an interim measure for the next three to four years to overcome shortfall of domestic coal supply.

According to Power Ministry estimates, it would facilitate additional electricity generation of about 32 billion units in 2012-13; 44 billion units in 2013-14 and 57 billion units in 2014-15.

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Coal Central Electricity Authority Power

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