Lok Sabha Question No. 2277 (UNSTARRED), answered on 2018-03-08
Subject: Impact of Coal and Freight Prices on Thermal Power Plants
Ministry: POWER
Asked by: SHIVAJI ADHALRAO PATIL, SHRIKANT EKNATH SHINDE, VINAYAK BHAURAO RAUT, PRITAM GOPINATH MUNDE, ANANDRAO  ADSUL

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.2277 TO BE ANSWERED ON 08.03.2018

IMPACT OF COAL AND FREIGHT PRICES ON THERMAL POWER PLANTS

2277. SHRI ADHALRAO PATIL SHIVAJIRAO: DR. SHRIKANT EKNATH SHINDE: SHRI VINAYAK BHAURAO RAUT: DR. PRITAM GOPINATH MUNDE: SHRI ANANDRAO ADSUL:

Will the Minister of POWER be pleased to state:

- (a) whether the thermal power plants are suffering due to hike in railway freight and thermal grade coal prices, if so, the details thereof along with the percentage of  price  of  thermal  grade  coal  and  freight  hiked  recently  and  the  impact  of  the aforesaid hikes on the generation cost of thermal power plants;
- (b) whether the thermal plants are operating at lower load due to rising demand for renewable power, if so, the details thereof;
- (c) whether hike in coal and railway freight costs is a blow on the operations of the coal based  units and  the plants  without  long-term  Power  Purchasing Agreements (PPAs) have suffered the most, if so, the details thereof; and
- (d) the extent to which the price of per unit procurement for discoms at all India level has increased and its impact on the consumers?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER AND NEW & RENEWABLE ENERGY

( SHRI  R. K. SINGH )

(a) : No,  Madam.  Indian  Railways  has  rationalized  Coal  &  Coke  tariff structure by reducing the freight in the range of -1% to -15% for distances beyond 700 km. The freight rates below 100 km have also been reduced substantially by reducing  the  minimum  distance  for  charge  from  125  km  to  100  km  for  all commodities. Moreover, for the traffic moving for distances between 0-50 km, 5175  km  and  76-90  km,  concession  of  30%,  10%  and  5%  respectively,  is  being granted. There has been only a slight increase in freight in the range of 1% to 9% for the distances between 101-700 km.

..........2.

Coal India Limited, vide notification dated 01 . 01 . 2018, has revised the price  of  all  grades  of  non-coking  coal  produced  by  coal  companies  of  CIL superceding  their  earlier  price  notification  dated  29 . 5 . 2016.  The  price  of  higher grade  of  coal ( G1  to  G5 ) has  been  reduced  by  0-5 % whereas  the  price  for  other grades (G6-G14) has been increased in the range of 3 to 22 %. With this increase, the increase in cost of generation is expected to be around 9 . 0-10.0 paisa / unit.

(b) : No,  Madam.  The  thermal  power  plants  are  operating  consistently  at Plant  Load  Factor  (PLF)  of  about  60% during  2016-17  as  well  as  during  2017-18 (April 2017 - January, 2018). However, the generation from thermal power plants is increasing. The low PLF of thermal power plants is primarily due to high growth rate of capacity addition vis-à-vis growth rate of demand. The Compounded Annual Growth  Rate  (CAGR)  of  installed  capacity  during  2012-17  was  10.3%  vis-a-vis CAGR of energy met at 5.8% only.

(c) & (d) :    The price revision of coal by Coal India Ltd. and the rationalization of tariff  by  the  Railway  are  based  on  their  operational  requirement.  The  energy charge rate (ECR) of any Thermal Power Station (TPS) is determined based on the landed  price  of  coal,  i.e.,  the  price  of  coal  as  well  as  its  transportation  cost including  all  taxes,  levies,  duties  etc.  The  Plants  without  long  term  PPAs, purchase  coal  through  e-auction,  the  price  of  which  is  higher  than  the  notified price of coal.

Government of India has taken following initiatives to reduce the cost of Generation:

- (i) Flexibility  in  utilization  of  domestic  coal  for  reducing  cost  of  power generation.
- (ii) Rationalization of coal linkages to optimize cost of transportation.
- (iii) Third  Party  Sampling  of  coal  at  both  loading  and  unloading  ends  to reduce the power tariffs to the consumers.

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