At a time when the Prime Minister's Office is busy paving the way for fuel linkage to new power projects, India's largest electricity generation company, NTPC Ltd, is claiming that capacities worth nearly 5000 MW are lying idle due to lack of demand. This includes nearly 2,000 MW of gas-based power.
Blaming it squarely on the cost of fuel and lack of purchasing power of State distribution utilities, NTPC Chairman Arup Roy Chowdhury said: "For the last two-and-a-half months, 5,000 MW of generation capacity is not requisitioned." He was attending a joint media briefing with Coal India Ltd (CIL) Chief S. Narsing Rao in Kolkata on Wednesday to announce the end of a deadlock in a fuel supply pact.
NTPC has an installed capacity of 41,184 MW, of which 5,800 MW is gas-based (including Ratnagiri Gas and Power, a JV with GAIL).
While the average generation tariff of the company is pegged at Rs 2.90, sources said the company was witnessing lukewarm demand for costlier power produced by gas-based facilities and units using relatively larger quantities of imported coal.
Though Roy Chowdhury did not elaborate on the generation cost of idle capacities, he admitted that State electricity boards were not keen to buy gas-based power. And, if the gas price is hiked, as recently decided by the Centre, there may not be any takers for such power.
"If we cannot sell power produced from gas priced at $4.2 per mmBtu (million metric British thermal unit), how can we find buyers for electricity if gas is priced at $8.4?" he asked. The company has already put its 4,000 MW gas-based capacity expansion plan on hold.
Roy Chowdhury's problems are partly solved by improved supplies by Coal India.
According to Narsing Rao, as against the promised supply of 65 per cent domestic coal and 15 per cent imported coal, to nearly capacities commissioned after March 2009, CIL is currently supplying 80 per cent domestic coal to all NTPC power stations except Simahdri.
Roy Chowdhury admitted that an improved domestic supply outlook had been a positive development for the power sector.
The two companies on Wednesday ended the deadlock over fuel supply pacts and entered a series of agreements ensuring supply of nearly 60 million tonne of coal to 14,010 MW worth of capacities added since 2009. This is over and above the existing pacts entailing supply of 114 million tonnes.
Asked if NTPC resolved issues regarding payment of nearly Rs 2,500 crore coal dues payable to Eastern Coal Fields and Mahanadi Coalfields (both wholly owned subsidiary of CIL), Roy Chowdhury indicated that things were ironed out.
CIL sources said NTPC agreed to pay dues based on third party sampling by the Central Institute of Mining and Fuel Research.