The failure of Western Coalfields Limited (WCL) and and other coal companies to supply contracted quantity of coal to Maharashtra based power plants is going to cost state’s power consumers dearly.
States’ power generating firm, Mahagenco is importing one-third of its coal requirement which will increase its generation cost. This will be recovered from citizens by way of higher tariff by the Maharahtra State Electricity Distribution Company (MSEDCL).
Mahagenco’s seven power stations need about 60 Lakh ton coal every year. Due to acute shortage, the company has decided to import 20 Lakh tonne. It will put an extra burden of INR 700 Crore on the company.
A source in Mahagenco said that since last six months, coal companies were not supplying contracted quantity of coal. “Only 57% of coal was supplied leading to a shortage of 43%. We were forced to reduce our generation,” he added.
To add to the problems, there was a long break in rains this this year. Temperatures in late September and October were quite high. The highest ever demand of 24,900 MW was registered in October.
“MSEDCL desperately needed extra power but we could not generate more than between 5,000 MW and 5,500 MW. This forced MSEDCL to buy costly power from exchanges at around INR 6 per unit. At times, the power purchase rate touched INR 8.75 per unit. In spite of buying costly power, MSEDCL had to shed about 500 MW load on some days of October,” said the official.
CIL officials have told Mahagenco that they will supply only between 36-38 Lakh Tonne against the contracted quantity of 60 Lakh Tonne next year. With Lok Sabha elections round the corner, the state government does not want do load shedding. Therefore, it has decided to import 20 Lakh Tonne coal.
Despite its failure to meet the coal demand, WCL has noted a decent growth of 14% Y-o-Y in coal dispatch to 34.72 MnT during the first 8 months of FY19 (Apr’18-Nov’18), even dissipating coal from its pithead stock in the process.
However, amid the rise in power demand Mahagenco will have to spend INR 1,400 Crore on importing coal, which is INR 700 Crore more than the cost of domestic coal. At present, domestic coal costs INR 3,500/MT on an average while imported coal costs INR 7,000/MT.
The extra cost incurred on imported coal will increase the company’s power generation cost by 30 Paise per unit. Currently, it is INR 4.10 per unit.
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