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Captive Power Producers Say Facing 'Severe Coal Shortage'

Most CPP-based industries are facing severe coal shortage and even struggling to maintain critical stock level. Reduced power generation is rendering operations economically unviable with huge risk of plant closure.

PTI

Updated:December 14, 2017, 8:38 PM IST
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Captive Power Producers Say Facing 'Severe Coal Shortage'
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New Delhi: Power industry body ICPPA, whose members include players from key sectors such as steel and aluminium, has urged the government to ensure coal availability, saying most captive power producers (CPPs) are facing severe shortage of the fuel which may lead to closure of plants.

The Indian Captive Power Producers Association (ICPPA) further said that the dry fuel must be supplied by Coal India Ltd to CPPs at the same rate at which it is being given to the Integrated Power Procures (IPPs).

"There is a shortage of coal for CPPs and the difference in price is also something which we are concerned about," ICPPA General Secretary Rajiv Agarwal told PTI in New Delhi.

Most CPP-based industries are facing severe coal shortage and even struggling to maintain critical stock level. Reduced power generation is rendering operations economically unviable with huge risk of plant closure, he added.

The government has always intervened whenever the industry has faced supply issues.

"We are hopeful this time too the coal ministry will come forward to help us. We have already requested for an appointment with the coal and power secretary to brief him about the situation," he said.

Since April FY17, Agarwal said, the coal dispatch to CPPs has stymied. During the period even though the coal was available it was not delivered to the CPPs. It was allotted to IPPs who unlike CPPs produce power to sell and make profits, he said.

He further said the government's intervention is required on an urgent basis as due to shortage, CPPs are suffering huge financial losses and forced to procure coal from alternate sources in spot market at higher prices.

Another issue is that CPPs are not being supplied coal by CIL at rate at which IPPs are getting. "IPPs are being given coal at a lower price as compared to CPPs. There is a difference of at least 20 per cent between the rates at which CPPs buy coal and IPPs buy from the CIL," he said. CPPs should be provided coal at par with rest of the power producers, the secretary said.

The average cost of extraction is Rs 300-400 per tonne. The billing to IPPs is done at Rs 800 a tonne. After some taxes like handling, it rises to Rs 950-1,100 a tonne, he said.

"To us it is done at 20 percent higher. To CPPs, the billing is done at Rs 1,600 a tonne. So something which was of Rs 400 is given to us at four times more. On global comparison what we are getting is in the highest bracket, he said.
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