April, Wednesday 13,
Central Electricity Authority (CEA) has said that the price disparity between domestic and imported coal is the root cause behind discouraging coal imports by power utilities.*
In a recent note addressing power ministry, the CEA anticipated shortage in coal supply to some extent by 91 million tonne (MT) this financial year and it is a big reason to worry that power utilities showed their unwillingness to import coal,as its landed cost was currently hovering around $4-4.2 per MMBTU (Million Metric British Thermal Units), while the price of domestic coal was around $1.76.
“Under-pricing of domestic coal discourages use of imported coal by power utilities and this generates higher demands for domestic coal. If there is a price pooling, power plants using imported coal will not be discriminated against due to merit order dispatch policy,” the Authority said.
Claiming for uniformity between the domestic and import rates, the authority has asked the government to devise a “price pooling mechanism” to offset possible under-recoveries by coal companies.
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