Power plants facing acute fuel shortage

PTI, PANAJI | 01 August 2014 20:41 IST

Flagging off concerns about fuel shortages hurting power generation, senior executives today said transportation and quality issues related to coal need to be immediately addressed for ensuring affordable electricity.

"Affordable power is linked to many risk mitigation factors," Essar Energy Plc's Chief Executive Officer Sushil Maroo said here today.

He said it was a "real contradiction" that there are demands for reducing electricity tariffs even as power plants are facing acute fuel shortages. 

Maharashtra State Power Generating Co Ltd's (Mahagenco) Managing Director Asheesh Sharma said quality of coal is a major issue besides high costs involved in transportation of the fuel. These factors make up for a substantial part of fuel costs, he added.

Better transport linkages such as railway lines from the coal mines would help in addressing the issue, Sharma said. 

With regard to addressing coal transportation issues, Maroo said that power plants need to set up at pit heads.

Many power plants in the country are facing severe coal shortages.

Last month, the government had said that power Power projects worth over Rs 36,000 crore and having total generation capacity of 7,230 MW were stranded due to shortage of coal. 

They were participating in a conference organised by the IPPAI ( Independent Power Producers Association of India) here. The session focused on 'managing fuel supply and price uncertainty'.

JSW Power Trading Company's Chief Executive Officer Satish Jindal noted that non-availability of coal has resulted in billions of units of lost electricity generation in the last few years. 
 
The challenges of environmental clearances, illegal mining and high ash content in coal need to be addressed, he said.

Maroo said importing large quantities of coal puts pressure on the foreign exchange rate. Even though India has one of the world's largest coal reserves, the imports are on the rise, he added.

Coal India is the major supplier of the dry fuel in the country. 

Last year, fair trade watchdog CCI had slapped Rs 1,773 crore penalty on Coal India for allegedly abusing its dominant position in fuel supplies. The ruling had come on complaint filed by Mahagenco, among others. Competition Commission of India's (CCI) order has been challenged by Coal India.

In a separate session, former and current regulators as well as executives from power companies deliberated on the need for amendments to the Electricity Act, 2003.

Bihar Electricity Regulatory Commission's (BERC) U N Panjiar said the issue of cross-subsidy in the power sector need to be addressed while amending the Act. 

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