Generation companies are struggling to line up uninterrupted coal supply while distribution companies have to resort to power procurement at a higher price or shed load
Power sector woes are expected to continue for some time as coal shortage continues, leading to a dip in the generation. Rising demand for electricity and fall in hydropower production due to a dry spell in certain parts of the country is compounding the problem.
Generation companies are struggling to line up uninterrupted coal supply while distribution companies have to resort to power procurement at a higher price or shed load.
Association of Power Producers director general Ashok Khurana said this year the power demand has shown an increase of 6-7%. In states like Maharashtra, Gujarat, Gujarat and Tamil Nadu, the demand has increased significantly due to the ongoing festive season, increased agricultural activity, coupled with a dry spell.
''The coal supply could not cope up with increased demand consequently several plants like RattanIndia Amravati, KSK Mahanadi and GMR Warora are under forced shutdown due to lack of coal supply. This power deficit got aggravated due to less generation of wind and hydropower,'' he added.
Indian Energy Exchange director (business development) Rajesh Mediratta said the coal position will improve in November, with milder temperatures in North India. The power supply situation will then improve, which may soften the prices.
''Being the election year, the buyers are more aggressive and they do not want to shed the load, which has caused the spurt in prices on exchanges. Currently, the average price ranges between Rs 5 and 7 per unit, which had gone up to Rs 18 per unit in few time blocks on October 5,'' he added.
Kameswara Rao, partner (grid), PwC, is of the view that there is a more fundamental logistics problem. The coal shortages are being faced by almost all the widely dispersed state-level non-pithead plants. Further, about 20-30% of the power offered is not reaching buyers due to transmission limitation. ''Besides, the swing in demand is significant with bid volumes on the exchange more than doubling in the last three to four weeks, changing it from a buyers' to a sellers' market. However, a robust power system should be able to manage this,'' he noted.
Former power secretary R V Shahi said unless there is a major change in the institutional framework of electricity distribution management (privatisation, franchisees), the entire power sector will continue to be captive to inefficient operations and outcomes, not only affecting distribution but also all other elements in the supply chain as well – generation, transmission, fuel, Railways.
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