Average power cost up 71 paise in FY23: power minister

The average power purchase cost increased by 71 paise between FY22 and FY23, said Union minister for power R.K. Singh.

In a written reply to a question in the Lok Sabha, the minister attributed the increase in cost to a rise in various early-stage expenditure including increases in transmission and distribution costs.

On whether the rise in cost was caused due to the blending of imported coal, the minister said that whether domestic or imported, coal is procured by thermal power plants separately and as per their requirements and this had been going on since 2009 as part of the blending practice in coal plants.

The statement mentioned the specific circumstances under which the ministry had recommended the import of coal. The minister noted that there was an increase in electricity demand from July 2021 onwards, meaning that the consumption of coal in thermal power plants increased and due to low supplies, stocks became depleted from 28.7 million tonnes (mt) on 30 June, 2021 to about 8.1 mt on 30 September, 2021.

Therefore, in December 2021, the ministry advised state gencos and independent power producers (IPP) to import coal at 4% of their requirements and central gencos at 10% of their need during 2022-23.

In January 2023, the ministry directed all gencos to import coal at 6% to ensure smooth operations till September 2023. This mandate has now been extended till March 2024.

Mint, recently, reported that the power ministry is likely to review its policy of mandating power generation companies to blend 6% imported coal in January.