Punjab Chief Minister Charanjit Channi on Saturday approved the PSPCL’s proposal to terminate GVK Goindwal Sahib (2×270 MW) power purchase agreement (PPA)…reports Asian Lite News
Subsequently, the Punjab State Power Corporation Ltd (PSPCL) has issued termination notice to the company.
A preliminary default notice was served by the PSPCL to GVK for cancellation of PPA due to high power cost.
Punjab scraps pact with GVK thermal plant
An official statement quoting Channi said this step had been taken to safeguard the interest of consumers by way of reducing the burden of costly power.
A spokesperson for the Chief Minister’s Office said the basic premise of entering into the PPA by GVK with the PSPCL was to provide cheaper power. GVK had been generating energy by arranging coal from the Coal India Ltd under SHAKTI Policy.
As per the PPA, GVK was required to arrange a captive coal mine but it failed to do so, even after the lapse of more than five years of synchronization with the grid, he added.
The spokesman said the capacity charges are being decided by Punjab State Electricity Regulatory Commission (PSERC) based on capital cost of around Rs 3,058 crore, which is equivalent to about Rs 1.61 per unit of fixed cost.
Going against this decision, the spokesperson said GVK had moved to the Appellate Tribunal for Electricity (APTEL) for claiming higher fixed cost to the tune of Rs 2.50 per unit based on claims of capital cost of about Rs 4,400 crore which is pending adjudication.
As per claims made by GVK, the spokesman pointed out that variable cost is around Rs 4.50 per unit and fixed cost is around Rs 2.50 per unit. Thus, the total claim of GVK under tariff comes out around Rs 7 per unit that increased further due to surrender of its costly power.
10% of thermal power companies still remain vulnerable in India
About 10 per cent of the 209 GW capacity of coal-based thermal power generation companies (gencos) in India remains vulnerable to outage amid surging demand for coal…reports Asian Lite News
Despite the recent dip in demand (10 per cent over October 16 and 17) due to heavy rains, shortage of coal persists with inventory at 5 days for these power plants.
Over half of these capacities do not have fuel supply agreements (FSAs), which increases their reliance on coal, either through imports or through e-auction where prices remain elevated. The scarcity and higher prices of coal may force these capacities to shut down for a few days as their operating cost could outweigh revenue, a Crisil analysis indicated.
10% of thermal power companies still remain vulnerable in India
Even though domestic coal supply in the second quarter this fiscal is up 16 per cent compared with the corresponding pre-pandemic period of fiscal 2020, part of it is to substitute non-coking coal imports, which have fallen more than 20 per cent, resulting in overall coal supply growing at around 8 per cent, consequently, coal stock at the plants is depleting.
Further, domestic supplies have been erratic due to seasonal rains impacting mining.
Meanwhile, domestic e-auction premiums (over the notified price of auctions conducted by Coal India Ltd) have spiralled due to scarcity of coal to over 130 per cent this September, from 80 per cent in September 2019. Even global coal prices are 160 per cent higher compared with September 2019 due to growing energy requirement across the globe, constraints in production, and high natural gas prices skewing the energy mix.
Crisil Ratings Director Ankit Hakhu said: “We expect high global coal prices to make imports dear and domestic e-auction premiums to remain elevated over the next few months, till supplies stabilise. In this milieu, 20 GW private capacities (out of 209 GW coal-based capacities) will be the most vulnerable as these depend heavily on the open market or imports for coal, and most have committed tariffs for the power sold to utilities.
“Therefore, if these gencos continue operations at these elevated current coal prices, it may lead to operating losses and thus these capacities may prefer to shut down till coal prices cool.”
Outages are unlikely at central and state gencos accounting for 133 GW.
That is because most have FSAs for their entire requirement, which guarantee coal supplies at notified prices. These plants, which cater to over 60 per cent of India’s thermal generation, may at worst see only some variation in coal supplies in the near term.
The balance 56 GW of the private gencos have more than half of their coal requirements tied up through FSAs. While that should help them navigate the scarcity, PLFs would be lower. For the record, as much as 80 per cent of the coal produced in India is supplied to gencos, which generate 75 per cent of the country’s electricity.
Power demand grew 9 per cent in second quarter this fiscal over the same period in the pre-pandemic fiscal 2020, driven by a rebound in economic activity, along with higher than usual temperatures in north and south India. However, reliance on thermal sources increased disproportionately because of lower hydro and nuclear generation during the period.
Crisil Ratings Associate Director Rohan Kulshrestha said: “Thermal PLFs have expanded by 400 bps to 57 per cent in the second quarter of this fiscal from 53 per cent in the corresponding quarter of fiscal 2020 and are expected to remain high at 60 per cent for the full fiscal (vs 56 per cent in fiscal 2020).
“As a result, the pressure on coal demand will also remain high. While coal availability for plants having FSA will be just about adequate for their current generation, gencos are unlikely to be in a position to ramp up inventory, which is expected to remain in single-digit days.”
Coal shortages have occurred in the past as well due to monsoon, lack of evacuation infrastructure, and rake unavailability. These have been partly addressed through higher imports, rationalisation of mines, ramp-up of production, creation and improvement of evacuation infrastructure, and liberalisation of commercial mining norms.
The Crisil estimate factors in supply of coal to plants in line with FSAs. Any reduction would negatively impact the assessment.
The Minister also blamed Covid-19 induced lockdowns for slower deployment of instrumentation and equipments, which, he said, prompted the revised timeline for implementation of the new emission norms by TPPs on March 31, 2021…reports Asian Lite News.
Out of the 442 Thermal Power Plants (TTPs), 355 units are complying with particulate matter — PM norms, 256 units are complying with NOx norm and 68 units are complying with SO2 emission norms, according to revised standards of 2015, the Rajya Sabha was told on Monday.
Also, on the one hand the Ministry of Environment, Forests and Climate Change (MoEF&CC) has been extending the deadline for the TPPs to comply with the revised standards of 2015, on the other, it admitted that it has not done any assessment of impact on environment and health of people due to continued operation of TPPs without complying to revised standards, as per the information provided by Minister of State in the Environment, Forests and Climate Change Ashwini Kumar Choubey in reply to a question by Member of Parliament, Manoj Kumar Jha.
The MoEF&CC, vide its notification dated March 31, 2021 (Annexure-I) had extended the time line for compliance of revised standards of 2015 for coal based power plants. “As per information submitted by utilities to Central Electricity authority (CEA) and Central Pollution Control Board (CPCB), out of 442 units, 355 units are complying with PM norms, 256 units are complying with NOx norm and 68 units are complying with SO2 emission norms,” Choubey said.
The Ministry had notified emission norms on December 7, 2015 for parameters viz. Sulphur dioxide (SO2), Oxides of Nitrogen (NOx) and Mercury (Hg) and revised the norms for Particulate Matter emission for coal/lignite based TPPs, which were to be implemented within two years from the notification i.e. by December 7, 2017.
Subsequently, in December 2017, the timeline was extended on case to case basis from year 2018 to 2022.
The ministry claimed that it took the decision after taking into consideration following factors: i. Technical challenges such as supply and demand assessment done by CEAI ii. The plan with timelines for phasing was prepared and submitted before Supreme Court, considering supply and demand aspectI iii. Market supply condition as limited technology providers are availableI iv. Supreme Court vide order dated July 29, 2020 in W.P. (C) 13029 of 1985 has seized the matter on certain emission norms.
The Minister also blamed Covid-19 induced lockdowns for slower deployment of instrumentation and equipments, which, he said, prompted the revised timeline for implementation of the new emission norms by TPPs on March 31, 2021.
“The Ministry has not done any assessment of impact on environment and health of people due to continued operation of TPPs without complying to revised standards,” Choubey said in reply to a pin-pointed question by Jha that asked whether the Ministry has done an assessment of negative impact on environment and health of people due to continued operation of these TPPs without complying with revised standards?
