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Captive power producers call for the restoration of normal coal supplies

Pointing out that independent power producers did not build up the required inventories which led to the coal supply crisis, Rajiv Agarwal, Secretary-General of ICPPA said in a virtual media interaction that this failure to create inventories, for various reasons, has led to the depletion of the insurance stock and consequently a “complete crash of the whole system”.

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New Delhi: The Indian Captive Power Producers’ Association (ICPPA) on Tuesday sought the government’s intervention to ensure normal coal supplies to captive power producers who are bearing the impact of the coal crisis and disruption in the whole system.

Pointing out that independent power producers did not build up the required inventories which led to the coal supply crisis, Rajiv Agarwal, Secretary-General of ICPPA said in a virtual media interaction that this failure to create inventories, for various reasons, has led to the depletion of the insurance stock and consequently a “complete crash of the whole system”.

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Agarwal ruled that the CPPs were facing this situation at a time when significant investments to the tune of USD 30 billion have been made for setting up these CPPs and associated infrastructure, which have generated 15 lakh direct and indirect employment. Out of a total 78,000 MW installed CPP capacity in the country, around 40,000 MW (i.e. 55 per cent) CPPs are thermal-based, which requires 200 million tonnes of coal per annum.

According to Agarwal, the IPPs are not building inventories because they know that if there is a crisis the government will help them.

‘Today, where we have reached is 35-40 per cent of what we should be getting. All the coal rakes made for CPPs have virtually stopped,” said Agarwal, urging the Government for 100 per cent normalisation of coal supply to CPPs.

Agarwal emphasised that this would be the right time to start normalising supplies because the IPPs may be planning to build up very high, 30-days inventory by March and then start supplying to CPPs and industries for next year. The CPPs would thus continue to face a supply crunch and the crisis could deepen, Agarwal pointed out, in a situation where they are already reeling from the adverse effects of the pandemic and the consequent economic slowdown which affected industries and infrastructure.

Agarwal urged the Government to help the CPPs which provide grid stability as they operate with minimum transmission and distribution losses, reduce demand pressure on the National Grid network, pump excess power into the grid and thereby contribute to the national energy pool.

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