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Home News Power Sector News Few takers for NTPC power from fossil-based fuels

Few takers for NTPC power from fossil-based fuels

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NTPCNTPC was stuck with almost 16.107 billion units of surplus electricity in 2011-12. This is because of grid restrictions, and there were few or no takers for electricity produced from expensive fuel.The company's generation loss in 2011-12 was much higher than the 13 billion units in the previous fiscal due to low demand for electricity generated from expensive fuel.

Of the 16.107 billion units, more than 10 billion units were from gas-based plants, an official said. Power generation in India is predominantly based on fossil fuel — coal and gas. It is always more viable to source fuel from the domestic market, as imported fuel means input costs going up, leading to higher electricity tariff.

Whether it is gas or coal, if sourced from overseas, it becomes expensive.

However, domestic production of coal and gas has not kept pace with increasing requirement for electricity generation. In fact, developers have been advised by the Government not to plan projects based on domestic gas till 2015-16.
Price competitiveness

Mr Arup Roy Choudhury, Chairman and Managing Director, NTPC, told Business Line that "the actual fructification of the gas-based capacities will depend on the price competitiveness of domestic gas/R-LNG vis-à-vis coal."

He said that industrial customers dependent on gas would be willing to buy imported expensive gas, but electricity generated from expensive imported fuel has few takers. In fact, even the electricity generated at Rs 4 a unit does not get immediate buyers.

NTPC is looking for long-term contracts for sourcing coal to ensure that the company has secure fuel supplies for its projects as well as it protects itself for volatility in fuel pricing.

Currently, 90 per cent of the company's fuel requirement is met domestically via its long-term contract with Coal India. The remaining 10-15 per cent NTPC meets through imported coal, which is very expensive.

The Minister of State for Power, Mr K. C. Venugopal, told the Rajya Sabha recently that some power generation facilities are facing shortage of coal and gas. During 2011-12, power utilities reported generation loss of 9 billion units and 11 billion units due to shortage of coal and gas respectively.

Source- Hindu

 

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