About 14,000 MW of capacity addition in the pipeline, based on Indonesian coal, appears to have hit a roadblock after Indonesia made it mandatory for coal exports to be benchmarked to international prices from September 23.
Tata Power, Reliance Power, Adani Power, JSW Energy and Lanco Infratech, had aggressively bid in the tariff-based competitive bidding process for power projects, based on their agreements/ arrangements they had made for fuel stock from Indonesia.
It is also learnt that the developers had worked the financials of their projects factoring in the coal price they had entered into in Indonesia for long-term supply, which in some cases are about $26-$30/MT, almost half the benchmark prices.
Tata Power has commissioned the first of its 830 MW unit at Mundra. Reliance Power has slowed down work at its 4,000 MW Krishnapatnam project till a decision is taken as no substantial investments had been made and lenders too were reluctant to release funds citing fuel price cost.
Mr Ashok Khurana, Director-General, Association of Power Producers, the apex body of power developers in the country, said “the issue concerns about 20,000 MW of stranded capacity”.
The association is only asking the Government for a forum or mechanism where the voices of the developers would be heard. A decision needs to be taken. It is not only about imported coal even domestic producers are impacted as Coal India is not able to address their requirements, he added.
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