Higher cost of imported coal is to be considered for pass through as per modalities suggested by Central Electricity Regulatory Commission (CERC). Ministry of Coal has issued suitable orders supplementing the New Coal Distribution Policy (NCDP).
The Union Ministry of Power has issued appropriate advisory to CERC/SERCs to consider the request of individual power producers to decide for pass through of higher cost of imported coal on a case to case basis. Consequential changes in price of electricity would be the domain of appropriate regulatory commission.
Price of imported coal depends upon various factors such as heat value, moisture content, ash content, source of origin, ocean freight, etc. and varies from week to week. The price of domestic coal also varies from mine to mine depending upon Grade/ GCV Value of coal.
Further, landed cost of imported coal at power plants depends upon its distance from the coast. As ocean freight and inland transportation cost are a major component that contribute towards the landed cost of imported coal, therefore, import of high grade coal results in saving of transportation cost.
There is no such proposal under the consideration of Central Government to provide subsidies to lessen the financial burden on coal importing power generators as well as hike the power tariff to make generation of electricity from imported coal more viable.
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