State-owned Coal India Ltd is expecting some let up in the fuel shortage crisis in power plants by the first week of November.

The relief will be through additional allotment of 60 lakh tonnes coal to pithead power stations, by diluting pit-head stock, and a ramp up of daily production to 18 lakh tonnes from 16 lt.

A proportion this coal is stuck in remote mines and the power plants will have to lift the stocks by rail or road.

According to the Central Electricity Authority (CEA), 22 non-pithead power stations had less than four days’ fuel stock on October 22. Among the pithead stations, a large number of Central government-owned NTPC power plants had a maximum of two days’ stock. The fuel shortage is reflected in the volatility in spot electricity tariff. Round-the-clock average tariff at IEX was ₹6.92/kWh on Tuesday.

Reasons

Though Coal India (CIL) reported 10.6 per cent increase in supplies during April-September period, the average supply dropped from 16 lt per day to 13 lt between July and September. It didn’t impact the electricity supply due to the availability of hydro-electricity.

The coal supplies improved late in October to 16.5 lt per day but the electricity demand also rose. Also, hydel and renewable energy supplies tapered down, escalating the demand for coal.

NTPC plants ran dry faster as they worked overtime since the middle of this year when the Centre decided to feed the pithead stations on priority basis to ride over the rail infrastructure inadequacies and ensure availability of electricity.

The ministry wants to serve units located in 500-600 km range to improve the turnaround of rakes.

As a solution CIL now offers NTPC additional 50 lt fuel (diluting the mine end stock of 210 lt) from all six subsidiaries to build stock at plant-end over the next 30 days. According to a senior company official, IPPs are also offered to lift 10 lt stock from large Dipka and Gevra mines in Chhattisgarh.

“We have invited NTPC to lift 15 lt from Amrapali and Magadh coal mines of Central Coalfields (Ranchi), 5 lt each from BCCL (Dhanbad) and NCL(Singrauli). At CCL we offered them to operate two sidings exclusively. They can also use our sidings. Payment conditions are relaxed to ease supply. They can carry coal to wherever they want,” the official said.

But the worry is that CIL barely has two weeks’ pithead stock. The official said production will be stepped up to 18 lt a day from November 1. NTPC seems to have started preparing for short term tenders to lift the coal on “as is where is basis”. The company supplies power to discoms on cost-plus basis. So the additional cost will be recovered through tariff.

However, the IPPs are yet to respond to this scheme as they operate on fixed tariff power purchase agreements and Discoms resisting cost increase. “This is a voluntary scheme, and would involve extra cost on logistics, which means we have to take prior approval of the regulator for cost recovery,” a source in a private power company told BusinessLine .

The regulator keeps dragging its feet on such proposals, he said.

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