Much to the discomfort of the consumers already facing frequent power cuts, rising price of coal in the international market, reluctance of state electricity boards (SEBs) to buy costly power generated from imported coal have forced several power companies to cut down their overall electricity generation. The demand for power generated from imported coal has suddenly plummeted, leaving power plants with no other option but to cut generation to remain commercially viable.
As much as 5.3 billion units of power generation was lost during April-December because of coal shortage, as per Central Electricity Authority (CEA), the government agency responsible for monitoring generation performance of power plants. The loss of generation, coupled with existing high levels of power deficit in the country, will lead to darker days in several states.
The situation has been aggravated by utilities that have not shown much urgency in importing coal to meet domestic fuel shortages. Most of the state electricity boards, the bulk power buyers, are in bad financial health and therefore are reluctant to pay a higher price for electricity. Use of imported coal is expected to shoot up electricity charges as fuel cost is a pass through in tariff, meaning higher price on fuel has to be reflected by a proportionate increase in electricity tariff.
Utilities are required to import 35 million tonne coal in the current financial year to meet their domestic fuel shortfalls. But as of December end, they had imported only 16.187 million tonne, of which 1.428 million tonne was still lying at ports. The high prices of coal in the international market is expected to keep imports at low levels in the remaining part of the current financial year. As a result, electricity generated by coal-based power plants was a nearly 5% short of the pro-rata target envisaged for April-December. The overall plant load factor (PLF) of these generating stations also worked out 3% lower, compared to the same period in the previous year.
Maharshtra utility Mahagenco generated just 6,276 million units between April and December, compared to 6,861 million units during the same period last year. The state utility had imported just 0.83 million tonne coal as of December against its 3 million tonne coal import target for the current financial year.
Reliance Power?s 600-mw Rosa power project in Uttar Pradesh generated 1,748 million units against its target of 1,916 million units for April-December.