‘Negligible' impact on power generation costs

Pratim Ranjan Bose Updated - February 07, 2012 at 08:38 PM.

NEW COAL PRICING

Mr Arup Roy Choudhury, Chairman, NTPC (file photo). -- V. Sudershan

Power producers report minimum impact on fuel costs following the January 31 revision by Coal India Ltd in gross calorific value (GCV) based price list. NTPC, running capacities in excess of 35,000 MW mostly located on the pit-head, reported a ‘negligible' 2-3 per cent cost push under the latest GCV-based prices regime.

According to NTPC Chairman, Mr Arup Roy Choudhury, new coal prices have had “negligible, maybe 2-3 per cent”, impact on the company's generation costs.

Assuming that the company's existing average tariff is around Rs 2.80 a unit, a back-of-the-envelop calculation suggests that electricity supplied by NTPC should be costlier by about 8 paise a unit, following the CIL price revision.

Old capacities

The cost-impact, however, is set to be higher for producers having old capacities, which consume coal of higher heat value or located far away from the coal mining areas in West Bengal, Jharkhand, Chhatishgarh and Maharashtra. Also, coal procured from Odisha has become relatively costlier.

According to sources, Kolkata-based private sector power generation and distribution utility CESC Ltd may report 25 paise ( around 5 per cent) cost push over and above the existing tariff of Rs 5.19 a unit.

The RP-Sanjiv Goenka Group company requires significant quantities of high-calorific-value coal (which has become relatively costly in the GCV regime) for its archaic capacity at Titagarh. This apart, the company procures bulk of the low-grade coal from Odisha-based Mahanadi Coalfields Ltd (MCL).

A wholly-owned subsidiary of CIL, MCL was earlier considered to be the cheapest source of coal — a distinction which was done away with under the new regime where coal of a particular heat value should fetch equal price irrespective of its source.

The case is more or less same in West Bengal, with the government-controlled generation utilities having a fair share of old generation units and the rest are based on supplies from MCL.

According to sources, the tariff of power supplied by state utilities should move up by 25-30 paise a unit (or 4.5 per cent) under the new coal price regime.

Published on February 7, 2012 15:08