Power generation from coal set to cost more
Tribune News Service

Patiala, December 23
With the final draft of the Fuel Supply Agreement (FSA) likely to be released within a month, the cost of power generation from the upcoming thermal plants in the Punjab will go up.

The FSA has to be signed by the power companies setting up thermal plants with the Coal India Limited (CIL).

Sources said the final draft of the FSA would be that the CIL would provide 65 per cent of the domestic coal with a clause that the percentage of domestic coal would be increased to 80 per cent in a phased manner in the next five years.

Two big power plants - Talwandi Sabo Thermal Plant (1980-MW) and Rajpura Thermal Plant (1400-MW) are coming up in the state. The deadline for the start of the first unit of the 660-MW capacity of the Talwandi Sabo Thermal Plant is April 13, whereas the first unit of 700-MW capacity of Rajpura Thermal Plant is likely to be operational by January 2014. Earlier, the CIL was supposed to provide 80 per cent domestic coal but because of the prevailing coal crisis in the country, now the CIL wants amendments in the previously drafted FSA.

The CIL board had approved the modified FSA in September, assuring supply of 65 per cent domestic coal and 15 per cent imported coal at cost-plus basis.

Cost-plus basis means cost of importing coal by the Coal India plus additional charges. A senior official of the Power Corporation said: “If the developer takes 65 per cent domestic and 15 per cent imported coal from the Coal India, the cost of power generation will certainly go up because imported coal will cost more.”

Speaking to The Tribune, Finance Secretary of the Northern India power Engineers’ Federation Vinod Gupta said the increase in fuel cost due to blending of imported coal would vary between 37 paise and 44 paise per unit. “When the private power company will file tariff petition with the Punjab State Electricity Regulatory Commission (PSERC) after taking into account all input costs, the power tariff would certainly go up and the electricity consumers of the Punjab will be the suffers,” he added.