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AIPEF seeks CAG audit of IPPs, says blending of imported coal will raise power tariff

The All India Power Engineers’ Federation (AIPEF) has demanded an energy audit of independent power producers (IPPs) by the Comptroller and Auditor General (CAG)
AIPEF seeks CAG audit of IPPs, says blending of imported coal will raise power tariff
AIPEF seeks CAG audit of IPPs, says blending of imported coal will raise power tariff
  • Blending of imported coal for power generation will result in a hike in tariff by Rs 1.15 per unit, the AIPEF has said
  • The investigations of the DRI regarding forged documents of imported coal by IPPs, and particularly by Adani, are pending decisions in the Supreme Court, said AIPEF

New Delhi: The All India Power Engineers’ Federation (AIPEF) has demanded an energy audit of independent power producers (IPPs) by the Comptroller and Auditor General (CAG) after thermal power stations were allowed to blend up to 15 percent imported coal for power generation. The organisation has claimed that such a move will result in a hike in tariff by Rs 1.15 per unit. The demand comes in the backdrop of a recent order issued by the Ministry of Power, allowing thermal power plants (TPPs) to blend imported coal up to 15 percent for power generation.

The Ministry of Power had advised all coal-based thermal generating stations to maintain adequate coal stock according to their obligations. In the case of domestic coal shortage, the generators can blend imported coal up to 15 percent with domestic coal, wherever technically feasible, to meet the increased power demand in the country, the ministry had said.

Import of costly coal will inflate power tariff: AIPEF Chairman

The issue has been flagged by AIPEF Chairman Shailendra Dubey in a letter addressed to Power Minister RK Singh, in which he has expressed concern over the hike in electricity cost which will be caused due to blending of imported coal. Due to increase in global coal prices, the cost of imported coal has increased. “The data of coal price parameters with respect to coal import from Indonesia and from South Africa shows that the landed cost of South African Coal is Rs 22,205 per tonne with coal of calorific value 5,500. In case of Indonesian coal, the landed price is Rs 21,720 per tonne, with calorific value 5,000. While for a load centre thermal station, the landed cost of Indian coal is Rs 5,150 per tonne with GCV 4,000,” Dubey said in the letter.

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Dubey said that the cost of coal to generate per unit of electricity with indigenous coal is Rs 03.22, while with 15 percent blending of imported coal, the cost will come out to be Rs 4.37 per unit. “Import of coal at Rs 21,000/tonne or Rs 22,000/tonne is not justified as cost is prohibitive and energy cost escalates by about Rs 1.15 per unit. State discoms which are already in crisis/financial difficulty cannot afford this price increase,” said Dubey in the letter.

‘IPPs not covered under CAG audit’

Dubey further said, “Moreover, private generators are not covered under CAG audit. It may be mentioned that the investigations of the Directorate of Revenue Intelligence (DRI) regarding forged documents of imported coal by IPPs, and particularly by Adani, are pending decisions in the Supreme Court.”

As per the Tariff Policy 2016, thermal power stations are required to be ready to dispatch at all times to meet power demand of the grid. “This provision must be applied and implemented on priority for CGPL Mundra (Tata) and to Kawai (Adani) thermal stations which have closed or backed down their power stations during the crisis. The Ministry of Power must direct CGPL Mundra to arrange more fuel to increase PLF of CGPL UMPP Mundra from 20 percent to nearly 100 percent,” said Dubey. 

The AIPEF urged the government to ensure that the extreme crisis of coal shortage must not repeat itself in the future. “CIL must take steps to increase coal production to ensure that the crisis does not repeat next /subsequent year,” said the letter. The Ministry of Power must draw up an action plan so that renewable capacity addition from solar, wind sources is ramped up so that the crisis of 2021 (thermal coal shortage) can be mitigated to that extent, said the AIPEF.

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