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Out-of-turn coal to PSE utilities irks IPPs
News
- The Centre decision to supply coal out-of-turn to State and PSU utilities is being objected by independent power producers (IPPs)
Important Facts
- ln order to avoid possible shortage of coal at state owned thermal power plants the central government has directed the Coal India to provide out-of-turn coal allotment to State and central PSU utilities.
- This move has irked independent power producers (IPPs) which are already under stress on account of high levels of debt and less than optimum plant load factors. State-owned NTPC currently operates at a plant load factor (PLF) of more than 70%, IPPs are averaging about 55% PLF.
- The demand for coal supply coincided summer when demand for power Increases.
- Shortage of coal supply to IPP raised number of concerns
- Discrimination based on ownership of assets puts into question the sanctity of commercial contracts signed by Coal India Limited.
- This would lead to more stress for the bankers.
- This is against the principle of ease of doing business.
- Association of Power Producers (APP) has demanded level playing field for both Public and Private sector.
- APP demanded that prioritization should be on the basis of efficiency rather than on contractual obligations. This helps to produce more power on same quantity of coal.
