NEW DELHI : The government has ordered state-owned Power Finance Corp. (PFC) and REC Ltd to offer short-term loans to struggling power stations using imported coal to help them restart production, as part of efforts to tackle an electricity crisis that has triggered a blackouts and threatens to harm economic growth.
“These plants need working capital to buy coal and start generating electricity,” the Union Department of Energy said on Wednesday.
Separately, the Department of Coal can regulate the fuel supply of states whose discoms continue to buy cheaper power from domestic coal-fired plants despite their agreement to purchase power from imported coal-fired plants. Rising global fuel prices have made power from power plants that rely on imported coal more expensive, which has weighed on demand from the country’s struggling power distribution companies.
Scorching temperatures across India have led to a surge in demand for electricity to run air conditioners, even as power plants face severe coal shortages. Many states have resorted to blackouts for several hours a day, unable to keep up with the growing demand for electricity. The energy situation could deteriorate further over the next few days as several parts of India face heat wave conditions.
India reported a record peak power demand met of 207.111 GW and a peak power shortage of 10.77 GW on April 29. On Tuesday, peak demand was 194.78 GW, according to data from state-owned Power System Operation Corp. Ltd (Posoco), which oversees the country’s critical electrical load management functions.
The Department of Energy’s directive to PFC and REC to help financially distressed imported coal-fired power stations comes after the government invoked Section 11 of the Electricity Act to force all such power stations to generate electricity. electricity to their full capacity in order to avoid an energy crisis. While 10 gigawatts (GW) of coal-fired imported capacity has started to be produced, approximately 7.6 GW is still idle, mainly due to high imported coal prices and the financial inability to purchase fuel due to pending payments from public electricity distribution companies. (discom). All national coal-fired power plants have also been invited to import coal to meet at least 10% of their needs.
Questions emailed to PFC and REC spokespersons on Monday went unanswered.
“While electricity from imported coal-based projects is plagued with inconvenience at more than ₹7 per unit, that of power plants using domestic coal is around ₹3-3.5 per unit. If states with power purchase agreements fail to purchase power from imported coal projects and schedule power largely from domestic coal projects to meet if requested, it would add additional pressure on these projects,” said a government official, speaking on condition of anonymity.
India’s power plants suffered a sharp depletion of fuel stocks last September as 14 imported coal-fired power projects cut output due to soaring coal prices. As a result, the demand for electricity from domestic coal-fired projects has increased.
The government also wants national coal-fired power plants to stock up on coal ahead of the monsoon season, when mining is affected by rain. Indian power plants burn about 2 million tonnes of coal per day.
“The contracted capacity for the imported thermal power plants is 20.27 GW, which at 80% plant load factor (PLF) is expected to generate 390 million units of electricity. But due to the low capacity utilization of these plants, the current daily output is around 160 million units. The government official quoted above said it also impacts domestic coal demand by 152,000 tonnes per day, or 4.7 million tonnes (mt) per month,” the government official quoted above said. above.
On Tuesday, the ICRA said imported coal is expected to increase the cost of power supply by up to 5% this fiscal year, driving up electricity rates.
According to data from the Central Electricity Authority (CEA), the 173 power plants it tracks have a stockpile of coal of 20.93 mt, only nearly a third of the required stockpile of 66.49 mt. A total of 85 domestic coal-fired power plants had less than a quarter of their prescribed fuel stock and were at a critical level. In addition, 11 power plants running on imported coal had a critical stock of coal as of May 10.
Rituraj Baruah in New Delhi contributed to this story
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