May22 , 2022

Behind power crisis: Genco dues to coal cos another cog

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Large outstanding dues of power generation companies (gencos) to coal companies may be playing a role in the current power crisis as state gencos had total outstanding dues of about Rs 7,918.7 crore to Coal India, as of April 18. Sources said Coal India reduces supply of coal to power houses from states with high dues when there is inadequate production or there are not enough railway rakes to meet demand.

Low coal stocks at a majority of India’s thermal power plants have led to power outages across several states including Uttar Pradesh, Maharashtra, Madhya Pradesh, Rajasthan, Haryana, Tamil Nadu, Karnataka, Punjab, Jharkhand, and Bihar. High demand for power due to the economic recovery post-Covid and sweltering heat across major parts of India, in addition to low power supply from imported coal-based plants due to high international prices, have strained India’s domestic coal supply chain. Coal-based power is currently meeting about 73 per cent of India’s power demand. On Sunday, 102 of 173 thermal power plants that are monitored daily had critically low inventory levels.

“When there are fewer rakes available (than required) Coal India reduces the supply to states with large outstanding dues,” said a source aware of developments.

Coal India did not respond to an emailed request for comment.

The Coal Ministry has maintained that the stock of domestic coal in the country is sufficient to meet the demand for power generation. The Indian Railways, which is the primary transporter of coal to power houses, has cancelled 753 train trips till May 25 to prioritise the delivery of coal for power generation.

Top 5 states Gencos with dues to CIL

According to government sources, the Maharashtra State Power Generation Company alone has outstanding dues of Rs 2,608.1 crore. The West Bengal Power Development Corporation Ltd has dues of Rs 1,066.4 crore, Tenughat Vidyut Nigam Ltd (a government of Jharkhand undertaking) has dues of Rs 1,018.22 crore. Other state gencos with large dues to Coal India include Tamil Nadu’s TANGEDCO (Rs 823.9 crore), Rajasthan’s RRVUNL (Rs 429.5 crore) and Madhya Pradesh’s MPPGCL (Rs 531.42 crore).

The ongoing power crisis has led to long power outages in several states. On Friday, India had an energy shortage of 214.12 million units and a peak shortage in power generation capacity of 8,120 MW. In the last week of April, Jharkhand was the state worst affected by electricity shortage with supply failing to meet 16.8 per cent of power demand in the state while Rajasthan (13.3 per cent), Haryana (12.3 per cent), Bihar (7 per cent) an and Punjab (6.9 per cent) also faced shortages of over 5 per cent of total electricity demand. The Union Territories of Jammu & Kashmir and Ladakh faced a shortage of 12.4 per cent of demand.

Sources said while state-owned Coal India Limited and Singareni Collieries Company Ltd had just about met production targets for coal in April, captive coal mines of several state power generation companies had fallen short of their target by about 3.5 million tonnes. The ability of power generation companies to make payments to coal companies is also hampered by the poor financial performance of power distribution companies (discoms), which had total dues of Rs 1,05,513 crore to generation companies including Central Public Sector Enterprises, independent power producers and renewable energy producers on April 28.

Maharashtra has overdue payments of Rs 18,143 crore to gencos, Jharkhand has Rs 3,721 crore and Rajasthan Rs 11,245 crore.

Meanwhile, the Ministry of Power has also asked states to import coal to augment stocks and blend up to 10 per cent of imported coal at thermal plants that use the domestic dry fuel. The Ministry has also asked states to use a tolling facility to allow up to 25 per cent of their coal allocation to power houses closer to mines so that electricity can be transmitted from closer to the source, thereby reducing the requirement for railway rakes.





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