Though the government approved a slew of measures to address the distress of the independent power producers just before the Lok Sabha elections, the industry is still awaiting for the power ministry to formulate concrete plans and procedure to implement them.
The Cabinet Committee on Economic Affairs, on March 7, had approved certain recommendations of a group of ministers and a high-level empowered committee on stressed power assets, mainly related to coal supply issues, payment discipline and sanctity of contractual agreements. However, the sector is yet to reap the benefit of the decisions.
Following the Cabinet decision, the coal ministry had amended the eligibility norms for the ‘Shakti’ scheme, allowing power plants without power purchase agreements (PPAs) to apply for coal linkages. The Cabinet also allowed power plants to retain their existing coal linkages if PPAs are terminated due to payment default by power distribution companies (discoms). The Cabinet also allowed NTPC to buy power from stressed private plants and sell it to discoms against PPAs for its under-construction stations.
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According to a coal ministry document reviewed by FE, the power ministry is yet to send across appropriate methodologies and adequate safeguard measures for implementation of the above decisions. “While we are given to understand that the second round of auctions for these projects (which participated in first round of Shakti auctions but could not secure sufficient coal linkage) will be held soon, we are requesting the power ministry to follow it up with the coal ministry to ensure the same,” Ashok Kumar Khurana, director general, Association of Power Producers, told FE.
The government is also yet to take any concrete action on the other Cabinet decision of not revising PPAs of stressed power plants in the NCLT. Lacking strict advisory from the Union ministry on this account, Uttar Pradesh’s energy regulator had asked Tata Power-backed Resurgent Power — which had acquired 75% in Jaiprakash Associates’ 1,980-MW Bara power plant — to reduce power tariffs by 40 paise/unit. Another issue not addressed yet by the government, but approved by the Cabinet, is non-lapsing of short supplies of coal, wherein power plants, even after making advance payments, are not compensated for short supply of coal due to the fault of Coal India or the railways.