The Central Energy Regulatory Commission (CERC) has defined the blending ratio, for power plants consuming imported coal, up to which prior consultation from the beneficiaries would not be required.
The commission in a suo moto order has provided relaxation in Rule 43 (3) of Tariff Regulation, 2019 by stating “prior permission from beneficiaries shall not be a precondition for blending up to 20% from alternate sources of fuel supply including imported coal, subject to technical feasibility, unless otherwise agreed specifically in the power purchase agreement”.
Moreover, the provisions limiting use of imported coal in generating stations concerning, higher blending ratio and consequent hike in energy charge rate, have been put in abeyance.
CERC has informed that these directives would remain in place till 31 October, 2022.
Need for imports
The decision was taken to facilitate higher coal imports so that the shortfall in domestic supplies can be compensated. At the same time, it addressed prevailing issues of stakeholders regarding use of imported coal.
It may be recalled that the government had asked power plants to import at least 10% of their requirement of coal for blending. This was done in consideration of the depleted coal stocks and necessity to build adequate inventory levels before the monsoon.
However, some generating companies had pointed out that they were facing problem to comply with the directives due to delay in accord of permission by the concerned beneficiaries.
Besides, there were concerns regarding use of costlier imports as it would lead to excessive increase in energy charge rate for power supply and ultimately impact power cost for end consumers.
The stakeholders were already of the view that cost of imported coal should be allowed to be recovered in full as a pass through and for that consent requirement from beneficiaries should be removed.
Power Plant inventory position
India’s coal-based power plants have recorded a continual uptick in inventory levels supported by increased supplies.
As per data provided by the power ministry, coal inventory at the plants have gradually improved to 29.52 mnt as on 25 July, 2022. This marks significant recovery from the lows of 21.94 mnt seen at the end of April, 2022.
At present, power plants have built up imported coal inventory of 6.06 mnt, which is more than 3-times compared to mid-May when the inventory had dropped to 1.83 mnt. On the other hand, domestic coal inventory was assessed at 23.46 mnt.
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