Friday, June 24, 2022

States resorting to load shedding due to huge unpaid bills for coal supplies: RK Singh

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  • The minister said that states resorting to load-shedding also have huge unpaid bills for coal supplies, but are still getting coal, which puts Coal India Ltd (CIL) in a precarious position 
  • Commenting on coal shortage at power plants, Singh said logistical issues exist with some power plants, but “there is enough fuel (coal)” 

New Delhi: Minister for Power RK Singh has said that power outages in some states, mostly Opposition-ruled, are of their own making and there is enough capacity in the system to meet the increased power demand. The statement was made by Singh on April 28, the day when India’s peak power demand hit a record high of 204 GW. The minister also said that the states resorting to load-shedding also have huge unpaid bills for coal supplies, but are still getting coal, which puts state-run Coal India Ltd (CIL) in a precarious position.   

“The system has the capacity to meet demand as is evident from the peak demand met. Power is available on the exchanges with a tariff cap of Rs 12 per unit (in the day-ahead market). Still, they are not buying and resorting to load shedding,” the minister was quoted as saying by The Times of India in a report. 

Power Secretary Alok Kumar added that there was still 4,000-5,000 MW available from the Centre’s pool. “So, if any state wants, we can allocate capacity. But we haven’t received any demand. 

States owe  Rs 7,918 cr to CIL for coal supplies so far in April

According to data sourced from Coal India Ltd, various state gencos and state electricity boards (SEBs) owe the PSU miner a total of Rs 7,918.72 crore, till April 18, said sources. Of this, Maharashtra (MAHAGENCO) owes CIL the highest amount of Rs 2,608.07 crore, followed by West Bengal (WBPDCL, WBSEB and DPL) at Rs 1,508.26 crore, Tamil Nadu (TANGEDCO) at Rs 823.92 crore, and Rajasthan (RRUVNL) at Rs 429.47 crore. These four states alone account for about 68 percent of the total dues, said sources. 

Among non-BJP ruled states, Andhra Pradesh (APGENCO) owes CIL Rs 271.04 crore, and Chhattisgarh (CSPGCL) owes Rs 202.85 crore. Among the BJP-ruled states, Madhya Pradesh (MPPGCL) owes Rs 531.42 crore, Uttar Pradesh (UPRVUNL) owes Rs 213.79 crore, and Karnataka (KPCL) owes Rs 134.60 crore, sources added. PSU Watch had earlier reported that despite an 18 percent decrease in outstanding dues owed by the power sector to CIL in March, the figures are likely to go up in the months to follow as demand for coal rises. 

‘Enough coal to meet power demand’ 

Commenting on coal shortage at power plants, Singh said logistical issues exist with some power plants, but “there is enough fuel (coal).” “We have 21 Million Tonnes of coal in reserve stocks at power plants, which is enough for 10 days. We don’t draw from it everyday only when supply is less than consumption. Stocks are being replenished daily, rising to 400 rakes,” said the minister. 

While pointing out that coal supply rose to 662 Million Tonnes (MT) in 2021-22, up from 569 MT in 2019-20, Singh described the current crisis as a demand-supply imbalance caused by a sudden demand spike. “Coal supply is up 16 percent, while demand has risen 20 percent over pre-Covid level,” said Singh. 

‘States resorting to load shedding taking people for granted’ 

Singh said that the states resorting to load shedding are taking people for granted. “It is unfortunate. They will not buy power. They will not resolve commercial issues regarding their PPAs with imported coal-based power plants because they think they can take people for granted. Gujarat has resolved issues with such plants and is getting power,” said the minister. 

While acknowledging that the gap between supply and demand has risen to 70 Million Units (MU) in April, Singh said that the government has asked states to import coal for 10 percent blending with domestic coal to ease the pressure on domestic coal producers. “They cite high global prices. We explain that at 10 percent blending, their tariff will go up by 5 paise or so, which is better than buying power at Rs 12 from the exchanges. Even for imported coal-based power plants, the impact of high coal prices would be cheaper than buying power at Rs 12,” said the Power Minister.

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