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As power generation falls, transmission companies, private producers make a killing on exchanges, Oct 16, 2021,

Posted On : November 09, 2021

Private power producers and some state transmission utilities appear to be making a killing by selling electricity on the exchanges where rates have tripled owing to lower generation as a result of coal shortage, even as power secretary Alok Kumar
 asked states to watch out for generators gaming the market and take legal action if imported coal-based power plants refused capacity on any pretext.
Data from the power exchanges for October 13 show producers and state transmission companies selling electricity at Rs 16-18 per unit against the usual rate of Rs 4-6 prevalent before the coal shortage hit generation units.               Transmission Corporation of Telangana Ltd
and 
Karnataka Power Transmission Corporation Ltd
 were the top two sellers, commanding a tariff of Rs 16 and Rs 15 per unit, respectively. Sembcorp was the third-largest seller overall and first among private power producers, commanding a price of Rs 16 per unit. 

Jaypee Nigre Thermal Power Plant Raipur Energen
, Raigarh Energy Generation Ltd and Jindal Power Ltd got a tariff of Rs 17 per unit
The highest tariff of Rs 18 per unit was commanded by Hindustan Power Ltd, Adani Power Stage-II and 
Teesta Stage-III
, the last one a record of sorts for hydel power.
The tariffs on the exchanges are guided by the market principle of demand and supply and depend on the situation at a given time when buy/sell bids are made. The coal shortage has forced about 5 gigawatts of generation capacity to back down, creating a rush of buyers on the exchanges. A 30% reduction in imported coal-based generation has further aggravated the situation.
At a meeting last week with representative of 
Tata Power
, Adani Power, Essar Energy, which have imported coal-based plants, and officials of Gujarat, Rajasthan, Punjab and Maharashtra, which have power pacts with these plants, Kumar said it was the responsibility of the power producers to stock fuel and not providing availability of generation capacity on any pretext was “inexcusable”.

He asked states to use all possible contractual and other available legal interventions against wilful refusal of capacity and also watch out for gaming by generators. “If any gaming is noticed on the part of the seller such as not supplying under PPA and selling in market (it) should be brought to notice of regulatory commission under intimation to the ministry without any delay,” he said.
Tata Power and Adani Power have both shut down their plants, each with 4,000 MW capacity, at Mundra in Gujarat. Tata Power said it was unable to supply power at tariffs in PPA as there was under-recovery of Rs 2.50 per unit due to a spike in international coal prices. Adani Power said it was waiting for coal stock and would be ready to supply power at pass-through tariff as prescribed in its PPA.

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The strategy of government seems to be “never waste a crisis” and use the crisis of pandemic to streamroll so-called reforms by way of privatizing, it alleged. The draft proposal is of serious nature for which the present situation of a pandemic is a serious constraint, it stated. The Ministry of Power has once again found peak pandemic time as an opportunity in crisis to launch the draft amendments to National Electricity Policy, it lamented. Once the draft policy is finalised, the notified policy would have the status of “subordinate legislation”, and for this reason, the matters need to deliberate as in the case of the legislation itself or as in the case of amendment in the Act itself, it opined. Draft national electricity policy is pushing for more private participation in the power sector and launching sell out of public assets as at Chandigarh and Dadra Nagar Haveli, it noted. The preferred route being suggested are failed models like the franchisee system, transferring distribution responsibility to a private party, and separation of carriage (lines) and content (supply) business, it opined. Since the existing Policy is in force since February 2005 there was no emergency to totally replace it, while power engineers and workers as front line workers are already stressed in maintaining power continuity, it added
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