Coal India Gives Ntpc A Breather On Imports

Jul 18, 2013

Coal India has assured NTPC, its biggest customer, that it will go beyond fulfilling its commitment under the fuel supply agreement (FSA) and try to lessen its woes over import of coal.



“Possibly, with the exception of the Simhadri unit, there is no plant of NTPC which is receiving less than 80% of the annual contracted quantity. If we make a little more effort, we can even fulfil 80% supply to that unit as well,” S Narsing Rao, chairman and managing director (CMD) of Coal India, said on Wednesday.



To recall, in February, NTPC was forced to temporarily shut down a unit of the 2,000 mw Simhadri Super Thermal Power Station due to want of coal.



Under the new FSAs being signed with power producers, Coal India’s obligation is limited to 80% of the annual requirement of any plant. For the balance 20%, NTPC and other power producers have to arrange the coal themselves through imports or by sourcing from auctions.



But there is a catch. Of the 80% FSA coal quantity, Coal India is obliged to supply only up to 65% from domestic sources at notified prices and the balance 15% through imports – at higher prices, which have to be borne by the power producers.



An assurance of up to 80% domestic coal, therefore, is music to NTPC’s ears, more so because higher imports mean higher costs, which translate into higher tariffs.



“If Coal India is meeting our requirement from domestic sources, then nothing like it, because that’s what keeps power prices low,” said Arup Roy Choudhury, CMD of NTPC.



NTPC recently floated tender to import 5 million tonne of imported coal for 18 of its plants as part of a plan to get 17 million tonne from overseas during the whole of the year.



The power producer is also open to sourcing it from Coal India, an option given under the FSAs.



“We don’t mind sourcing imported coal from Coal India. We have been importing coal for the past 3-4 years and we would like to have them as our preferred supplier. But what’s important for us is the price, and we have to ensure that price is reasonable as that’s what gets passed on to consumers,” said Choudhury.



Choudhury and Rao on Wednesday signed six FSAs for 3,890 mw of generation – out of 29 FSAs for an aggregate 14,010 mw the companies are supposed to sign. To be sure, NTPC has already signed two FSAs with CIL subsidiary ECL for a generation capacity of 1,000 mw on June 11. Rao said CIL was committed to finalising the third party sampling by end-August and that would be made effective from October 1.

Source:-www.dnaindia.com