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Severe coal shortage hits captive power plants in India

Staff Writer | December 25, 2017
Captive power plants for producing different metal-based plants have sent SoS to the Ministry of Coal as they are forced to run at 50% capacity due to severe shortage of coal since April this year.
India power plant
Asia   The Indian Captive Power Producers Association
The Indian Captive Power Producers Association (ICPPA), which is the apex body of captive power producers (CPPs), have also alleged that Coal India Limited (CIL) was not honouring fuel supply agreement (FSA) for supplying coal.

These plants have an installed capacity of about 40,000 MW. Captive power plants are linked to mostly metals sector like aluminium, iron and steel, zinc and also chemicals, paper, cement and textiles.

These power plants require 190 million tonne (MT) of coal annually for their operations for which they were given commitment for 78 MT during April-November.

However, they could get only 9.36 MT, which is just 12% of the commitment, thus a shortfall of 88%, said association secretary Rajiv Agarwal. He said, as a result, these plants had to import only 1-2% coal during this period last fiscal (2016-17), but this fiscal, this percentage has gone up to 25%.

Association president Rahul Sharma said: Most of the CPP-based industries are facing severe coal shortage and struggling even to maintain critical stock level.

Reduced power generation is rendering operations economically unviable with huge risk of plant closure. Sharma added: We have apprised the Ministry of Coal about the situation which calls for urgent attention.

Earlier too, we had faced a huge problem on coal supply, but the situation improved with the timely intervention of the government.

However, since April this year, the coal dispatch has stymied and even though the coal was available, we have not been allotted rakes and independent power plants (IPPs) were preferred on dispatches, he said.

Sharma said he had several rounds of meeting with officials of the Ministry of Coal. We were assured that the coal availability situation would improve after Diwali. However, the situation on the ground continues to be the same, he added.