Power plants designed to run on imported coal have recorded a decline in generation volume during May, 2022 due to outages faced by some of the major units.
Power generation from these plants decreased 11% y-o-y to 3,986 million units (MU) in May, 2022 against 4,483 MU in May, 2021. The volume was also 21% lower m-o-m compared to 5,046 MU in April 2022.
Upon the directives of the power ministry, several power units based on imported coal made a gradual return to the fleet after their operations were hit by increased coal prices. However, lower generation during May was attributed to lack of demand as the plants already in operation had reported reserve shutdown (RSD).
It is important to note that power generation from the Mundra-based facility of both Adani Power and Tata Power was down 33% and 16% on a monthly basis. These plants have a combined capacity of 8,620 mega-watt (MW) which alone account for half of the total installed capacity of import-based plants.
CERC proposes correction in existing PPAs
At present, there are 15 imported coal-based plants with an installed capacity of 17,255 MW, which account for a mere 8% of the total coal-fired plant fleet.
During May, four of the plants were completely non-functional, including the likes of Salaya, Thamminapatnam, and Simhapuri which are facing lengthy absence from the grid due to coal shortages and lack of power purchase agreements (PPAs).
In an attempt to aid these plants, the Central Electricity Regulatory Commission (CERC) has underlined the need for a correction in computing power tariffs in the existing PPAs.
The provisions in the PPAs comprise a transition to a monthly escalation from the existing six-monthly escalation rates which would take into consideration sub-components such as imported coal, its transportation and inland handling. CERC has informed that the generating company and the buyer can opt for the revised norms upon mutual agreement.
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