A captive power producers' body today warned that the government's decision to dedicate all coal supplies to central, state and independent power plants would bring the industry to a "standstill".
The Indian Captive Power Producers Association (ICPPA) in a letter to the Prime Minister's Office and Railway and Coal Minister Piyush Goyal urged for resuming coal supplies to captive plants, which have been set up by various industries like steel, cement and aluminium to meet their own demand.
The installed captive power generation capacity is about 47GW in the country
The ICPPA shot off the letter today after the government decided to supply coal to state/central power plants and independent power producers from May 19 to June 30 to avoid any electricity crisis during summer season.
The new adhoc decision without any advance notice would bring industry to standstill particularly the continuous process based sectors like aluminium, the association warned.
They also noted that captive power plants have signed legally binding long-term fuel supply agreements with Coal India and abrupt stoppage of supplies would bring the industry to a grinding halt which will have sever impact on industry including cement, paper and other and result in millions of job loss.
They also highlighted that captive power producers just got 12 per cent out of total rake sanctioned to them last fiscal.
The association has said that the government should avoid adhoc decision on coal supplies curtailments and bring in a system of giving advance notice to the industry for making alternative arrangements.
Indian Captive Power Producers Association Secretary Rajiv Agarwal termed the decision as "bad" and said in the last four years the share of industrial power consumption has reduced from 45 per cent to 40 per cent.
"In the last one year, captive power producers have been suffering. They are getting 10 to 30 per cent of their coal requirement. We see it as clear discrimination between small and large power plants. It will affect all major sectors including cement, steel, textile, chemicals and aluminium," he told PTI.
The decision to dedicate all supplies to power plants was taken in a joint meeting of power, coal and railways ministries on May 17, 2018. Ministry of railways has asked all its zones to accord high priority to power plants from May 19-June 30.
According to the data complied by the Central Electricity Authority on May 17, as many as 24 non-pit heads plants were facing coal shortage out of monitored 114 plants.
Among the 24 plants, 18 coal stocks for less than 4 days and classified as super critical while other 6 have coal stocks for less than a week and categorised as critical ones.
Some experts think this may increase coal imports in the country by captive power plants and others.
The shortage of coal has resulted in surge in spot prices to as high as Rs 10.80 per unit in September last year.
The government in October last said the issue of coal supply to power plants is being addressed in a coordinated manner by the ministries of power, coal and railways.
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