Centre urges power utilities to cut supply costs to ease burden on users

 India wants its power utilities to reduce the cost of power supply to ease the ‍burden on customers, a top ​power ministry official said on Wednesday.

The utilities need to lock in coal supplies promptly and when prices are lower and need to plan their coal capacity and renewable capacity additions on time and independently, power secretary Pankaj Agarwal said at an industry event in New Delhi.

Right now, the Central Electricity Authority, ​the think tank of the power ministry, does the planning on how much newer coal power capacity needs to be added by the states. But Agarwal would like to see states having more input into the plans.

"The cost of power supply needs to become affordable ... We need to introspect and optimise our cost of supply," Agarwal said, pointing out that the country's industrial power tariff is around $95 per megawatt hour.

The price is quite expensive when compared to other nations, such as China, Vietnam, Thailand and the U.S., which are estimated to be $60 per MWh and $80 per MWh, he said.

The power utilities have to work on integrating cheaper clean energy into their power mix that can reduce ‌the cost of power supply, the official ​said.

Agarwal said that cheaper renewables were a sweet spot for power distributors to reduce the cost of supply.

The official's comments come as power distributors have been resisting signing long-term clean energy contracts, while opting for expensive coal power.

Nearly ‍45 gigawatt of clean energy remains unsold as state power distribution companies are delaying their clean energy purchases, expecting electricity rates to fall further.

Agarwal ‍said ‌that the cost ​of inter-state transmission of power was also becoming ‍very expensive and the country might remove the waivers provided for that.

At present, ‍India ‍has extended a ‌complete waiver of inter-state transmission charges for electricity storage projects until June 2028.