Lok Sabha Question No. 4789 (UNSTARRED), answered on 2016-12-15
Subject: Dependency on Imported Coal
Ministry: POWER
Asked by: DHARMENDRA YADAV, SHRIKANT EKNATH SHINDE, ANANDRAO  ADSUL

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.4789 TO BE ANSWERED ON 15.12.2016

DEPENDENCY ON IMPORTED COAL

†4789. SHRI DHARMENDRA YADAV: DR. SHRIKANT EKNATH SHINDE: SHRI ANANDRAO ADSUL:

Will the Minister of POWER be pleased to state:

(a) whether there is a 60% rise in imported coal prices between April and October 2016;

(b) if so, the details thereof and the reasons therefor;

(c) whether  the  regulatory  commissions  are  considering  to  allow  a pass-through  of  such  costs,  by  way  of  power  purchase  and  fuel  cost adjustment, since power purchase cost is an uncontrollable expenditure for the discoms, if so, the facts thereof;

(d) whether most of the State regulatory commissions are not considering to allow for such adjustments on an actual and timely basis, if so, the steps taken by the Union Government to reduce the dependency on the import coal; and

(e) whether the country has surplus power with adequate domestic coal availability, the details thereof and the reasons for import of coal?

## A N S W E R

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

( SHRI  PIYUSH GOYAL )

(a) & (b) : A  statement  containing  information  related  to  imported  coal during the period from April, 2016 to October, 2016 is given at Annex.

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

(c) & (d) :    As per Section 86 of the Electricity Act, 2003, tariff for retail sale of electricity for different consumer categories is determined by the Appropriate State Electricity Regulatory Commission  (SERC)  / Joint Electricity Regulatory Commission (JERC). Section 61 of the Act, mandates that the Appropriate Commission, while determining tariff to not only ensure safeguarding of consumer's interests but also the recovery of the  cost  of  electricity  in  a  reasonable  manner.    Section  62  of  the  Act further provides for periodic tariff adjustment during a year to take care of the variation in fuel price, as may be specified.

As per Section 63 of the Electricity Act, 2003, determination of tariff,  by  bidding  process,  the  Appropriate  Commission  shall  adopt  the tariff,  if  such  tariff  has  been  determined  through  transparent  process  of bidding in accordance with the guidelines issued by the Central Government.

Further,  provisions  as  contained  in  Section  8.2.1  (7)  of  the Tariff  Policy,  2016 provide for the Appropriate Commission to specify an appropriate price adjustment formula for recovery of the costs, arising on account  of  the  variation  in  the  price  of  fuel,  power  purchase  etc.  on monthly/quarterly basis for recovery of all prudent costs of the generating company and the licensee.

All the SERCs are required to take action as per the provisions mentioned above in the Electricity Act and the Tariff Policy.

(e) : The  energy  and  peak  shortage  in  country,  during  the  period April-Nov, 2016 was only 0.7% and 1.6% respectively as against 2.3% and 3.2%  during  the  corresponding  period  last  year  (2015-16).    Due  to enhanced supply of domestic coal, during the current year, there is no loss of generation in coal based power plants due to shortage of coal.

However,  there  are  some  power  plants  based  on  imported coal. The import of coal is being done for such imported coal based plants. However, efforts are being made to substitute imported coal by domestic coal to the extent it is technically feasible to further reduce its use.

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## ANNEX

ANNEX  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  &  (b)  OF  UNSTARRED QUESTION  NO.  4789  TO  BE  ANSWERED  IN  THE  LOK  SABHA  ON 15.12.2016.

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| FOB Prices of Imported Coal (Monthly Average Price, USD/Tonne)   | FOB Prices of Imported Coal (Monthly Average Price, USD/Tonne)   | FOB Prices of Imported Coal (Monthly Average Price, USD/Tonne)   | FOB Prices of Imported Coal (Monthly Average Price, USD/Tonne)   | FOB Prices of Imported Coal (Monthly Average Price, USD/Tonne)   |
|------------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------------------------------|
| Month                                                            | South African Coal Price (GCV- 6000)                             | Australian Coal Price (GCV-6000)                                 | Indonesian Coal Price (GCV-4600)                                 | Average Price for all Three Varieties of Imported Coal           |
| Apr-16                                                           | 52.78                                                            | 50.68                                                            | 38.07                                                            | 47.18                                                            |
| May-16                                                           | 53.38                                                            | 51.31                                                            | 38.46                                                            | 47.72                                                            |
| Jun-16                                                           | 57.86                                                            | 52.85                                                            | 39.25                                                            | 49.99                                                            |
| Jul-16                                                           | 61.88                                                            | 61.24                                                            | 41.34                                                            | 54.82                                                            |
| Aug-16                                                           | 65.89                                                            | 67.41                                                            | 45.41                                                            | 59.57                                                            |
| Sep-16                                                           | 67.31                                                            | 72.70                                                            | 50.84                                                            | 63.62                                                            |
| Oct-16                                                           | 83.04                                                            | 94.19                                                            | 59.41                                                            | 78.88                                                            |
| Price Escalation between April and October, 2016                 | 57.33%                                                           | 85.84%                                                           | 56.03%                                                           | 67.19%                                                           |
| Source: Global coal/Argus media ltd.                             | Source: Global coal/Argus media ltd.                             | Source: Global coal/Argus media ltd.                             | Source: Global coal/Argus media ltd.                             | Source: Global coal/Argus media ltd.                             |

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