Centre’s nod to rationalise coal linkage of Nabha Power Ltd

PSPCL HAS SOUGHT THIS WAIVER AS IT WANTS TO START COAL LIFTING FROM NCL AS SOON AS POSSIBLE TO REDUCE POWER GENERATION COST

PATIALA: The Union coal ministry has approved Punjab government’s request to rationalise the coal linkage of Nabha Power Limited (NPL) by allowing supply from Northern Coal Limited, than from the present supplier, South Eastern Coalfields Limited (SECL). With the decision, the Punjab State Power Corporation Limited (PSPCL) will save 20 paise per unit in electricity generation from the thermal plant.

This saving will be generated as the distance between the raw material and the user plant has decreased; NCL has coal mines in Uttar Pradesh, Madhya Pradesh and other nearby states, as compared to the SECL’s mines in the deep south of the country.

As of now, NPL has been sourcing coal from different Coal India Limited (CIL) subsidiaries under a Fuel Supply Agreement FSA with the SECL. In this arrangement, PSPCL was being billed the actual cost of coal in terms of the muchmaligned Power Purchase Agreement (PPA).

CIL, however, wants the NPL to enter into a supplementary Power Purchase Agreement (PPA) with the distribution companies or the PSPCL. This agreement, to be approved by the Punjab State Electricity Regulatory Commission,will mandate the passing on of the savings on account of linkage rationalization to the PSPCL. Punjab has asked for a waiver of this clause, as the entire power that NPL produces is supplied only to the PSPCL through a long-term PPA.

PSPCL chairman and managing director A Venu Prasad said the utility was trying everything within its means to reduce power generation cost. “I do hope that with the change of coal linkage, the PSPCL will save between 20 paise and 22 paise per unit of electricity generated from NPL. Not only freight will reduce, but coal quality is also better,” he added.

“The savings due to the use of such linkage of domestic coal will automatically be passed on to distribution to companies, and ultimately to consumers. These power plants will use the transferred coal only for generation of electricity for supply to the state,” said CMD, said saying that the PSPCL has asked the coal ministry to waive one of its conditions of a supplementary PPA, as it is not required for NPL and other plants.

“PSPCL has sought this waiver as it wants to start coal lifting from NCL, as soon as possible, to reduce power generation cost. We are also trying to get coal linkages from nearby locations, to save freight cost, which has doubled over the past few years,” he added.