The thermal power generators in India face numerous challenges, which are to be looked into. In a recent conference, conducted by the reputed research & consulting firm—Infraline Energy—at New Delhi, Sudhir Agrawal, the Head of Coal Procurement division of Vedanta Limited, highlighted the major hindrances encountered by the coal-based power producers in India.
According to Agrawal, the following are the major impediments in the implied context:
>>Poor financial health: The power sector is in a poor financial health, with INR 4,300,000 crore being piled up on distribution companies
>> Inefficient operations of the distribution companies (DISCOM), and high transmission & commercial losses
>>The Plant Load Factor (PLF) of the thermal power plants is dropping continuously (average PLF at 66% in FY14% and 60% in FY17). The drop in the PLF has arisen due to: lesser power demand, non-availability of long-term and medium-term Power Purchase Agreement (PPA) for DISCOMs, power plants can avail the linkage only when the Letters of Assurance (LoA) with DISCOMs are converted into PPA, lesser availability of assured coal linkage, expensive coal allocations through auctions and lower prices of electricity in exchanges and, poor quality of coal alongwith high ash content affecting power plant performance.
>> High domestic coal costs, arising out of: heavy tax incidences ( cess @ INR 400/MT, royalty @ 14%), higher rail and road freights, grade slippages.
To mitigate the hindrances, Agrawal suggested the following measures:
>> Development in the railway infrastructure for streamlining the evacuation and transportation of coal
>>Making the coal market in India competitive by migrating from the current system of administrative allocation of coal to a vibrant coal market
>>Improvement in mining operations by using tools, like SCADA
Leave a Reply