Imported coal based power plants get fuel cost relief till December

NEW DELHI: The power ministry has allowed independent power producers (IPPs) burning imported coal to pass on the higher fuel costs till December with a view to restarting stalled capacity as domestic coal-based generation stations across the country struggle to cope with rising demand because of low fuel inventories, sources said.
The decision, taken at a meeting last week to take stock of the power situation, is expected to switch on 7,980 MW of imported coal-based generation capacity of Tata Power, Adani Power, Essar Power, ILF&S Tamil Nadu, Coastal Energen, Udupi Power and GSECL Sika Ltd. Most of the capacity was shut primarily after consumer states refused to pay for the rise in global coal prices.
The imported coal cost will be benchmarked to HBA (Harba Batubara Acuan) Index for Indonesian coal and the states will be free to exit the pass-through arrangement after December 31. The index has shot up more than 30% after the Russia-Ukraine conflict.