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Too poor to buy coal for power

- Fuel reserves dip as cash crunch forces utility to cut purchase

Calcutta, Aug. 5: Cash crunch and dues have forced the state-run power generation utility to cut down on coal purchase.

Although there has not been any power shortfall because of the weather, the depleting coal reserves could trigger a crisis when electricity demand picks up next summer.

The West Bengal Power Development Corporation Ltd’s (WBPDCL) coal reserves have depleted to a fourth of what it usually keeps, power department sources said.

Since the beginning of this financial year, WBPDCL has been buying 40 per cent less coal from Eastern Coalfields Ltd (ECL). Since April, WBPDCL has been buying two rakes of coal a month on average from ECL, three less than the usual number. A rake usually carries around 3,500 tonnes of coal and the price of five rakes is Rs 7.5 crore.

Power department officials said the utility’s five plants, which have a combined generation capacity of 3,840MW, had a week’s reserves, around a fourth of the usual quantum of 30 days.

The officials linked the reduced buying to the cash crunch WBPDCL has been facing for the past couple of years.

“WBPDCL had to request ECL to give it less coal because it does not have enough funds to buy so much. Till April, the generation utility used to buy around 25 per cent of ECL’s produce. Now, WBPDCL buys 10 per cent,” a power department source said this evening.

The department officials said that if WBPDCL’s fiscal health did not improve this financial year, there could be a power supply deficit next summer, when the demand will increase and coal supply will become erratic.

“Things could get tricky for the generation utility when the demand crosses the 5,200MW mark next summer. If it does not have a 30-day reserve and coal supply takes a hit, achieving the generation target of 3,000MW could become difficult,” an official said.

WBPDCL, reeling from a debt burden of Rs 3,000 crore, is struggling to clear around Rs 900 crore in dues to ECL.

ECL, a sick Coal India subsidiary that is striving to make a turnaround by 2015, has been affected by non-payment of dues adding up to over Rs 2,500 crore in the previous financial year. WBPDCL owed Rs 1,400 crore last year, of which the generation utility paid Rs 500 crore this fiscal.

Sources said the state government’s reluctance to raise power tariff was one of the main reasons for the generation and distribution utilities’ financial problems.

A senior Nabanna official said the principal reason for the estimated reduced necessity of electricity in the next five years was the lack of growth in industrial power demand.

“The power demand from industry, which accounts for 40 per cent of the total electricity consumption in Bengal, has not gone up much in recent years. While the domestic power demand grew by 19 per cent in 2013-14, that of industry went up by 4 per cent,” the official said.

According to the official, over 48,000 medium and small-scale industrial units have shut down in the past five years and in the absence of new investment, the power situation is unlikely to change substantially by 2019-20.

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