State-owned Coal India (CIL) allocated 27.14 million tonne (MT) coal to the power sector under special forward e-auction mechanism in 2018-19 fiscal, registering a decline of 6 per cent from the previous year. According to the latest monthly report prepared by the coal ministry for the Cabinet, CIL allocated 28.93 MT of the dry fuel to the sector in FY18.
In an attempt to reach out to its consumers, CIL had earlier announced a special forward e-auction calendar for FY19 to facilitate power plants to systematically plan the lifting of coal. Last year, it said it would put on offer a little over 45 MT coal under the special forward e-auction mechanism in FY19.
Meanwhile, the privately-owned thermal power units have complained about increase in coal prices in the spot forward e-auction (SFeA) by CIL and its subsidiaries. The thermal companies have alleged that coal firms have increased reserve price in the range of 10-32 per cent. “With this increase in reserve prices for the upcoming SFeAs, the final premium to be paid for successful bidders in these auctions would be well over 50 per cent of the notified prices. This increase would directly reflect in the cost of power produced, and would be disastrous for the power projects, considering the current stress scenario” pointed out a letter written to the Ministry of Coal by the Association of Power Producers.
“The projects that are dependent on the SFeA for their coal needs would get pushed down the merit-order dispatch, thereby reducing their chances of getting scheduled for generation. They will lose out to the power plants that get coal at much cheaper notified prices,” the letter added.
During the April 2018-March 2019 period, there was a 74 per cent increase over notified price, according to the monthly status report on the coal ministry website.