Gujarat government’s initiative to swap coal between the state-run Gujarat State Electricity Corporation Ltd (GSEC) and NTPC Ltd will save a staggering Rs 350 crore, informed Saurabh Patel, Energy and Finance Minister, Government of Gujarat. Initially, about one million tonne of coal will be swapped between the two power producers, an agreement for the same will be signed in the next few days.
“Gujarat’s power company has been allotted coal from Korba mines in Chhattisgarh. For this, we have to pay more freight for coal than the cost of coal. And similarly NTPC is sourcing imported coal from Gujarat ports to its Chhattisgarh plant,” Patel told an industry gathering at EnerAsia 2014, a global energy summit held at Pandit Deen Dayal Petroleum University in Gandhinagar on Friday.
“I am sure that in the next 8-10 days an agreement will be signed between NTPC and GSEC where one million tonnes of coal will be swapped in the initial stages. The imported coal for NTPC will be taken by us and coal for GSEC that comes from Korba mines can be used by NTPC. This will result in savings of around Rs 350 crore in the swapping of one million tonnes,” he added.
GSEC can swap a total 2.5 million tonnes of coal quantity with NTPC.
The Union Power Minister, Piyush Goyal had approved the plan earlier this month with a view to rationalise the railway freight and bring down the delays in coal supplies to the plants.
Hinting at the need to increase power tariff to sustain and grow the energy sector, Patel further informed that “As far as consumers are concerned consumers will have to pay a price. Because the fuel cost is a pass on theory. And this pass on theory has to be absorbed if the consumer wants to get quality power.”
Additional Principal Secretary to the Prime Minister, P K Mishra stressed on the need to make power more accessible and reliable for every household. “There is a need to create a policy framework for the two focus areas, sustainability of power entities and comprehensive and effective regulatory framework,” he added during his address.
Expressing concerns about the prevailing macro-economic challenges and the fallout of the government decisions on fuel pricing, Patel stated that Gujarat will be no exception to face the tough times in the energy sector.
“As far as Gujarat is concerned, next 6—12 months are tough for us also. The crucial decisions (on gas pricing) taken by the Centre are equally going to affect the state. There is a back up as far as gas power projects are concerned, but we will have to pay a higher price in the form of variable cost which is working out to be Rs 7 per unit on today’s imported LNG price,” he said.
“We are not worried about the shortage of power but cost of power will be an important factor,” added Patel.