Lack of availability of coal linkages has been a major issue of concern to power projects in India. Dialogue between the Ministry of Power and Ministry of Coal has been on course for over a year now, without any fruitful decision.
In an interview with CNBC-TV18, Ravi Sharma, CEO of Adani Power says CIL's inability to supply to demands and coal pricing are the major hinderances to quick decision-making. The power major has, however, received coal for the Mundra Project and Tiroda power plant. Adani Power expects an output of 6000 MW by end of FY12, he says. Below is the verbatim transcript. Also watch the accompanying video. Q: There is a report suggesting that the government is leaning towards prioritizing coal allocations to companies which are set on a cost plus basis or a case-I basis and people who sit on a merchant basis; a) Are you aware of such a decision and b) If it happens what kind of impact could it have on Adani Power? A: Coal is a major issue which is a matter of concern to all of us today. The Planning Commission, along with the Ministry of Power and Ministry of Coal is debating this issue and trying to find a solution. For over a year now, coal allocation has not gone ahead, primarily because of 2 reasons. Firstly, CIL is finding it difficult to meet the current requirements and secondly, the prioritization of coal allocation in terms of pricing has also to be worked out. Q: Apparently, they could be moving in a direction which may not be very beneficial for you, particularly for some of your projects like TPP Phase-I and II for Mundra. If indeed they decide to allocate in priority to the cost plus producers, would you struggle then, with some of your plants? A: Both, Mundra and Tiroda have already got the maximum coal allocation possible. Also, more than 80% of the capacity is already under PPA (Power Purchase Agreement). So, the people who will be most impacted are the people who have taken a majority of their power generation for selling into merchant market. As far as we are concerned, we are only there for 20%. That apart, our application (for PPA) for the rest of the plants is under consideration. Even at Kawai, our third plant, more than 90% of the generation capacity has already been sold to the Rajasthan government. Also read: Assocham for uniform coal price for power plants Q: By when do you expect the final resolution over this issue in terms of what the allocation process will be and whether indeed there will be priority to case-I? A: I would like it to have happened yesterday. But for some time now, it has not been moving too fast. I would certainly want that this to be addressed sooner than later because there are lots of plants and the plans that cannot get ahead. Q: On the merchant trade side, what do you expect in terms of rates that Adani Power can get, over the next few quarters? We hear of reports that many state electricity boards are unwilling to buy power at expensive ratesDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
