Captive power units urge PMO to address coal supply issue, seek rate parity

15-Oct-2018

Power industry body ICPPA has requested the Prime Minister’s Office (PMO) to take steps to address the issue of coal availability and its supply.

The Indian Captive Power Producers Association (ICPPA) members include players from key sectors such as steel and aluminium.

In the letter to PMO, dated October 4, ICPPA said aluminium is a highly power-intensive industry and around 14,500 kWh (kilowatt hour) units are used for the production of 1 tonne of aluminium metal, which requires 11.7 tonne coal.

“We request your support for an immediate resumption of coal supply for the industry to sustain operations and rakes allocation on priority for optimum coal materialisation at par with IPPs (independent power Producers) as per the FSAs (Fuel Supply Agreement)”.

Supply of coal is a long-standing issue for the captive power producers who unlike the IIPs (independent power Producers) don’t produce it for commercial purpose.

ICPPA further noted that as per MoC’s (Ministry of Coal) notification dated February 15, 2016, 25 per cent of coal allocation should to be done to CPPs (captive power producers), in the proportion of the FSAs, the body said.

Any power outage/failure for two hours or more results in freezing of aluminium pots and shutting down of plant for at least 6 months rendering heavy losses and restart expenses, it said.

The industry, meanwhile has made investments of $20 billion to enhance production capacity from 2 mtpa to 4.1 mtpa (million tonnes per annum) and employs over 800,000 people directly and indirectly and it carries a debt of Rs 700 billion, it added.

On prices, ICPPA had earlier said that the dry fuel must be supplied by Coal India Ltd to CPPs at the same rate at which it is being given IPPs.

“There is a shortage of coal for CPPs and the difference in price is also something which we are concerned about,” ICPPA General Secretary Rajiv Agarwal had said.

Source: PTI