Coal shortage at power plants may push up spot prices in summer

Coal shortage is still affecting the efficacy or capacity utilisation (Plant Load Factor) of independent power projects in the country, which may lead to a spike in spot prices of electricity on exchanges this summer, according to experts.

“Earlier last year, the shortage of coal prices resulted in surge in spot power prices at energy exchanges to as high Rs 11 per unit and the rate may increase again with the onset of summers when demand touches its peak,” power sector experts said.

According to the latest Central Electricity Authority (CEA) data, the Plant Load Factor (PLF) of the independent power projects (IPPs) was 52.54 per cent in February 2018 compared to 59.54 per cent a year ago.

However, as per data, the PLF of central sector projects rose to 76.59 per cent in February from 72.93 per cent.

Similarly, the PLF of state sector projects increased to 61.76 per cent in the month from 54.41 per cent a year ago.

The experts noted that the IPPs have been reporting lower PLF than state run plants which indicates mounting pressure on private developers who are unable to operate at a higher capacity to remain viable.

They are of the view that the share in electricity generation of the central government owned NTPC has been on the rise on account better access to coal, while about 50,000 MW of IPPs with an investment of Rs 2.5 lakh crore are under tremendous stress.

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