Power rates likely to surge: could go up by 60-70 paise per unit

Centre having to imports coal at a premium to address the fuel inventory shortage at thermal power plants, says union power minister

Union power minister R.K. Singh:File picture

TT Staff Reporter   |   Calcutta   |    08.07.22  : Electricity charges for consumers on an average could go up by 60-70 paise per unit as the country imports coal at a premium to address the fuel inventory shortage at thermal power plants.

Addressing the 75th foundation day of Damodar Valley Corporation in the city, union power minister R.K Singh said that the government has no choice but to import coal at higher prices to prevent blackouts amid existing coal mining challenges in the country.

According to Central Electricity Authority Data, a total of 73 power plants had critical levels of coal stock as of July 6, 2022.

The minister said that while imported coal price is in the range of Rs 17000-18000 per ton, domestic coal is available at around Rs 2000 per ton.

But, there are problems of land acquisition, rehabilitation and resettlement and faster clearances that still remain major challenges in coal mining.

“There is a need to step up coal production and this is a challenge before us. The government is working to rationalise laws and procedures so as to bring more coal into production as fast as possible,” said Singh adding that at present it takes up to 3 years to start a coal mine.

The power ministry has allowed power generating companies to import up to 10 per cent of coal from overseas for blending with domestic coal.

But generators have expressed concern about tariffs going up and delayed recovery from the stakeholders.

Speaking on the sidelines of the event, the minister said that an average of 25 million tonnes of coal is expected to be imported by various players including central and state power generators and by Coal India for buffer stock creation.

He said there is a need for the state regulators to allow the true cost of generation to be reflected in the tariffs and the state can give subsidies to certain sets of consumers.

DVC targets

The power minister said that there is an ongoing discussion with the corporation to scale up its capacity by an additional 5000-6000 MW in the next 3-5 years by putting up plants within its area where land is available. With logistics also a challenge in the coal supply chain for power plants, the government is keen to put up units which are closer to the coal mines.