WBPDCL to mine its own coal to avoid spot power purchase

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Kolkata | Published: September 30, 2018 1:58:15 AM

With the day-ahead power market achieving higher volumes (306 million units for Saturday delivery) and prices going haywire (Rs 10.54 at evening peak) on the Indian Energy Exchange, the power ministry has asked state discoms to develop their own mines instead of depending on linked, e-auctions and imported coal.

coal, coal industry, coal sectorThe West Bengal State Electricity Distribution Company Ltd (WBSEDCL) is looking for a tariff hike and this could be true for other state discoms too, a WBSEDCL official said.

With the day-ahead power market achieving higher volumes (306 million units for Saturday delivery) and prices going haywire (Rs 10.54 at evening peak) on the Indian Energy Exchange, the power ministry has asked state discoms to develop their own mines instead of depending on linked, e-auctions and imported coal. The state discoms’ financial health would be further affected since the gap between the average cost of supply (ACS) and average revenue realised (ARR) is widening. The West Bengal State Electricity Distribution Company Ltd (WBSEDCL) is looking for a tariff hike and this could be true for other state discoms too, a WBSEDCL official said.

West Bengal Power Development Corporation Ltd (WBPDCL) has been failing in giving demand projections because of which the WBSEDCL has been unable to make any medium- or long-term contract with the exchange. “We are absolutely depending on spot power, purchasing at an average `8 per unit. An average increase in tariff by Rs 1-150 would help us adjust the cost of supply. The tariff hike should reflect in the ARR by the end of the fiscal even though it would not affect the average price realised (APR) for now,” the official said.

While Coal India Ltd has made it clear that it would not be able to stretch production beyond its aspirational target of 652 million tonnes for the fiscal, West Bengal power minister Shobhondeb Chattopadhyay told FE that the WBPDCL would develop its own mines within the next six-eight months. Once Barjora-1, Gangaramrup Chawk, Tara and Panchwara North Coal blocks, allotted to the WBPDCL, start producing, the state would not have to depend on coal from outside. The state has received all necessary clearances—at present, only Barjora coal block is producing. There is another block—Kasta—from where lifting coal is difficult since it’s within the coal-fire area. “All these blocks together have a reserve of 456.50 mt. By sourcing coal from these blocks, power can be produced at below `3 per unit,” Chattopdhyay said.

He said that, at the present point in time, the state is not considering any tariff hike, “but we are setting a target of eight months to mine our own coal and produce cheaper power.”

The state has also been in a technology hunt and there have been representations from Poland to put all the old thermal units to efficient operations. The GoI had given directions to close all coal-guzzling units over 25 years old. But after successful implementation of R&M (rehabilitation & maintenance) and EE (energy efficiency) in four units of 210-mw each in West Bengal, Maharashtra and Haryana with $225 million worth of World Bank assistance, the government now wants to alter the directive. It plans to roll out R&M and EE in all the units above 25 years of age in state and central sectors to produce power at below `3 per unit.

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