Less production from imported coal-based power stations drove power crisis in August-October last year

New Delhi: With a shortage of coal reported in several power plants during August-October period this year, power traded in the Indian Energy Exchange touched an all-time high monthly volume of 9,125 million units (MU) in August, 8459 MU in September and 8866 MU in October registering an increase of over 67 per cent, 52 per cent and 35 per cent respectively for the same period last year. This has resulted in increase in electricity prices hitting the maximum limit of Rs. 20/kWh for some periods in the day. Even the average prices remained in the range of Rs.5-Rs.8 during this period. The growth in the economic and industrial activities led to the increase in demand for power in the current financial year. The overall demand of electricity has also increased by 10 per cent, even it is higher by 5.36 per cent as compared to the pre-Covid period.

In order to be better prepared, the Government has issued advisory to maintain coal stocks at a level of 17 days at pithead and 26 days at non pit head stations. Ministry has also issued advisory to NTPC and DVC to import coal equivalent to 10 per cent of their requirement for the next financial

year. At the same time, State gencos and IPPs were advised to import only 4 per cent of their requirement for the next financial year.

However, it needs to be understood that one major reason for power crisis was non availability of power from power stations built on imported coal. Incidentally, this

issue has not been getting adequate attention. As per data, imported coal-based stations add up to a total capacity of 17.5 GW. These plants reported 43 per cent less generation in the current financial year till date as per the information published by the Central Electricity Authority. If the entire capacity would have been generating power, it is quite possible that the crisis would have never occurred. While these plants did not supply power as per their commitments, it is understood that a few of these actually were supplying power through the exchange and made lots of money. This raises the issue of meeting

the PPA commitments as well as the need to enforce the sanctity of the contracts. There need to be a strict mechanism to ensure that the gencos do not create a scarcity situation and make a killing on the market.

The obvious contradiction is that while the imported coal-based plants are not operating as per requirement,

plants designed for domestic coal are being advised to use imported coal which does not appear logical.