Non-payment issue leading to power crisis
The resolution of payment issues among various stakeholders in India’s power sector may hold the key to meeting electricity demand amid rising temperatures, economic growth and critically low coal stocks.
Amid a rising power demand across the country, state-owned power generating companies are not making timely payments to Coal India and its subsidiaries, observing a debt of ₹15,000 crores.
Power Minister RK Singh asserts that a major part of the outstanding dues of PSU miner Coal India (CIL) has accumulated in the non-BJP States of Maharashtra, West Bengal, Jharkhand and Rajasthan.
According to CIL data, till April 18, various state Gencos and state electricity boards (SEBs) owe the PSU miner a total of ₹7,918.72 crores, sources said.
Of this, Maharashtra (Mahagenco) owes CIL the highest at ₹2,608.07 crores, followed by West Bengal (WBPDCL, WBSEB and DPL) at ₹1,508.26 crores, Tamil Nadu (Tangedco) at ₹823.92 crores, and Rajasthan (RRUVNL) at ₹429.47 crores. These four states alone account for about 68% of total dues, they added.
Of the other non-BJP states, Andhra Pradesh (APGENCO) owes CIL ₹271.04 crores, and Chhattisgarh (CSPGCL) owes ₹202.85 crores. Among the BJP-ruled states, Madhya Pradesh (MPPGCL) owes ₹531.42 crores, Uttar Pradesh (UPRVUNL) owes ₹213.79 crores, and Karnataka (KPCL) owes ₹134.60 crores, the sources said.
Singh told reporters that power demand in energy terms has gone up by around 20% compared to pre-Covid FY20. whatever is left with power plants are reserve stocks, at 21 MT, which can support power generation for around 10 days.
“I don’t draw from this reserve everyday. I only draw from it when coal receipt is less than consumption. We are already supplying 400 rakes of coal per day. There will be some shortages somewhere. Maybe some states have not paid their dues to CIL. Then in some places, coal was allotted but the state was not able to pick it up,” the Minister explained.
The sharp decline in coal imports has increased the burden on the domestic players to fulfil the rising demand in the upcoming months. In FY20, imports by the power sector stood at 69 MT, which declined to 27.2 MT in FY22, Singh said.
“You can’t do this. States should import in advance for blending. They say the price of foreign coal is high ($130-140 per tonne), but you have to import only 10 per cent for blending. So the increase in the cost of power will be 5-10 paise per unit, which is better than buying power from spot markets at ₹12%,” he added.
As many states report blackouts during the coal crisis, Coal India Limited has revealed an increment of 27.2% in its output in April 2022, when contrasted with the year-ago period, the Ministry of Coal on Friday. The despatch of coal also improved by 5.8% year-on-year in April 2022. “Coal production by Coal India Ltd (CIL) has increased by 27.2 per cent in April 2022 as compared to the same period of last year and coal despatch has increased by 5.8%,” the Ministry said in a statement.
