Price rise in coal from Indonesia hits power companies in India

The government of India has confirmed that the increase in prices of coal from Indonesia has hit power producing companies in India.

Minister of State for Power Mr KC Venugopal informed the Lok Sabha that “Some power generation companies in India are facing the problem of an increase in the price of imported coal due to new regulations in export of the commodity in Indonesia.”

Some Indian power companies or their group companies hold shares in or have acquired coal mines in Indonesia, Australia and South Africa.

New regulation issued recently by the government of Indonesia prohibits the sale of coal, including sales to affiliate companies, below a benchmark price based on international rates. The regulation requires that all existing contracts are modified from this month to comply with the new coal pricing regulation.

The target for electricity generation is fixed on a year-to-year basis, keeping in view the performance of existing units and their maintenance program, the contribution expected from new generating units programmed to be commissioned, the availability of fuel, water, etc.

Private power companies like TATA Power and Reliance Power have written to the Power Ministry in the past, requesting it to mediate with the procurers of electricity from their Mundra (Gujarat) and Krishnapatnam (Andhra Pradesh) projects, respectively, for an increase in tariffs.

The two firms had asked the Power Ministry to allow them to increase the tariffs of their projects as the imported coal sourced from Indonesia for these projects has become dearer.

Source – profit.ndtv.com

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SUMIT KUMAR

Executive at India Electron Exchange

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