For July 8 Power prices may go up by 60-70 paise per unit: RK Singh

Power prices are set to rise by 60-70 paise per unit due to higher coal imports and discoms requiring to pass on the increased cost to consumers, Union power minister RK Singh said on Thursday.

Speaking to reporters on the sidelines of the 75the foundation day of the Damodar Valley Corporation, he said the generation cost would increase since the landed cost of imported coal would come at around 16,000 -17,000 per tonne against an average price of 2,000 per tonne of domestic coal, Singh said.

He said while NTPC has been asked to import 20 million tonnes this fiscal, DVC would import 3 MTs, state generating units around 5-6 MTs and Coal India Ltd (CIL) around 15-16 MTs.

The two tenders floated by CIL for a total of 6 MT imports for the medium term has kept an option of increasing the bid quantity by 100%. This could take CIL’s total medium term imports to 12 MTs and added to that the 2.416 MTs of import tender for the short term, could take CIL’s total import to close to 15 MTs, a ministry official clarified.

Singh said the higher cost of generation has to be factored in tariff and state discoms and regulators would require to increase tariff, if they had to maintain the financial health of the discoms. ” If state Discoms refuse to increase tariff the subsidy has to provided by the states then”,Singh said adding states would have to buy power from the Central generating sector at the cost of generation.

On the imported coal based power plants, Singh said some of the 5 closed plants have already been referred to NCLT but the remaining plants generating a total of around 13,400 MW has been directed to scale up generations after reporting their coal stocks to the power ministry. These units have already been directed to import coal, he said.

He said the demand for power has increased and peak demand grew 15% year -on-year in FY 22 touching a level of 2.12 lakh MW.

He said DVC would to increase its installed capacity from present 6,897 MW to 16,000-17,000 MW in another 5-7 years on its own land closer to coal mines and would create a national foot print instead of confining only within West Bengal and Jharkhand. From a loss making utility it has turned to a profit making utility and its profits at present have started growing, Singh said.

He said there has to be more efficiency brought in managing transmission and distribution losses, especially by the state owned transmission and distribution companies. While many private sector power distributors have been able to bring down their T&D losses to level 5-6%, the state sector was still continuing with an average T&D loss of 20-25%.