(BS)
Power generating companies (gencos) that use imported coal to produce electricity, may find it difficult to switch on their idle units immediately in the wake of high fuel costs, several players have told Business Standard. Last week, the Union power ministry had invoked Section 11 of the Electricity Act mandating all imported coal-based plants to generate power at full capacity. However, some generating companies that use imported coal, argue that it is simply unviable for them to produce power when the price of coal in the international market is high, while the per-unit price of power has been capped at Rs 12 per unit on the domestic power exchange.
“Fuel costs have been surging, with imported coal price at nearly $380 per tonne currently. It is slowly inching towards the $400-per-tonne-mark, which means there is no respite from high fuel prices any time soon. At the same time, the price of power on the exchange has been capped at Rs 12 per unit. How fair is this,” asked the chief executive officer (CEO) of a power company that has two plants running on imported coal. The executive requested anonymity in view of the sensitivity of the matter.
