Panel pulls up government for diverting coal cess

Panel pulls up government for diverting coal cess

News: The 42nd standing committee on energy report pulled up government for not using coal cess for reviving stressed gas-based power plants rather using it for post GST compensation to states

Important Facts:

Status of Gas-based Power Plants:

• Out of India’s total installed power capacity of 345MW, the share of Gas-based power in capacity is 7.2% and in generation only 3.8% mainly because due to non-availability of domestic gas and unaffordability of imported gas
• Because of such state large assets have turned into non-performing asset

Status of Coal Cess collection and utilization:

• Coal Cess (Rs 400/tonne) collected has to be transferred to National Clean Energy Fund (NCEF) for clean energy projects
• But according to report, only 18% of total cess collected had been utilized for projects under NCEF
• Inter Ministerial Group chaired by the Finance Secretary was constituted to approve the project/schemes eligible for financing under NCEF.

What are observations and recommendations of Committee?

• Diversion of funds for unrelated activities shows lack of commitment of government of clean energy projects
• To provide financial support to the stressed gas-based power projects in the country from National Clean Energy Fund (NCEF)

Benefits of revival of Gas-based power plants?

• could be used as peak based plants as demand for electricity increasing on account of government effort to electrify all households
• to meet Paris agreement INDC target of installing 40% of power capacity from renewable energy by 2030