NTPC may consider setting up imported coal-based projects

Company expected to make move after there is clarity whether escalation in cost of imported fuel will be compensated or not

State-run power producer NTPC may consider setting up imported coal-based projects once there is clarity that escalation in cost of the imported fuel would be compensated, according to a top official.

Earlier this month, power sector regulator CERC said that Adani Power should be granted "compensation" package for its Mundra project which would provide a cushion against the escalation in cost of imported coal for the plant.
    
"When we get the details (imported coal cost escalation) then I would be able to comment, then the picture would be more clear for me whether I am interested in setting up an imported coal-based Ultra Mega Power Project," Chairman and Managing Director NTPC Arup Roy Choudhury told PTI.

    

He said NTPC needs to check whether it will be compensated in a scenario that it factors in a price of USD 35 for the imported coal in the bid documents but prices shoot up to USD 80 eventually.
    
He added that a step will be taken after duty structure in India as well as the country -- from where coal will be imported -- is clear.
   
NTPC, which currently has an installed capacity of over 41,000 MW, plans to add another 16,909 MW by 2017. Out of the future addition, around 15,400 MW will be coal-based capacity.

    
According to estimates, Rs 5 crore is required to produce 1 MW of thermal power.
    
Coal India achieved an output of only 452.5 million tonnes for the just-concluded fiscal, missing the target of 464 million tonnes.
    
Meanwhile, CERC in a landmark judgement on April 3 said that Adani Power should be granted a "compensation" package for its Mundra project to mitigate the impact of rise in the cost of imported coal for the plant.
    
The company had approached CERC seeking revision in tariff from its 1,980-MW Mundra project in Gujarat stating increase in imported fuel cost.

    
CERC said that in order to offset increase in cost of imported coal, till the international price of the commodity is stabilised, the company should be provided with some relief.
    
The regulator has also directed constitution of a Committee comprising members including the Principal Secretaries of the concerned states and CMDs of the concerned distribution companies, an independent financial analyst and an eminent banker to recommend the compensatory tariff within a period of one month.
    
Following this order (April 3), the stocks of Adani Power, Tata Power and Reliance Power rallied on the BSE. The other two companies have also approached the regulator for their respective projects on similar lines.