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Power generation cost to increase by 10% with revised coal freight
The recent coal transportation hike by Railways will increase generation cost by more than 10 %. This increase will lead to additional increase of generation cost by about 20 paise per unit.
THE GENERATION cost in Punjab will increase by 10 % after the railways increases freight rates by about 20% for coal transportation from Tuesday.
 
The Railways have hiked the base rate for freight from Rs. 100 to 120 and reduced the number of distance slabs from 174 to 37. The transportation charges for coal will increase by 20.1 % for distance of 500 Kms. Transportation costs up to 1000 kms distance will go up by 22.5% and above 1000 kms will go up by 25%.
 
Punjab State Power Corporation Limited (PSPCL) will be most hit on the coal front, because first it was increase in coal cost on the basis of revised coal classifications linked to gross calorific value and now the increase in transportation charges.
 
The latest transportation hike by railways would cost another Rs.400-crore on power generation. As per PSPCL, Annual Revenue Requirement (ARR) petition before Punjab State Electricity Regulatory Commission (PSERC), the fuel cost for 2012-13 has been estimated as Rs. 4171.13 crore.
 
According to official sources the destination cost of coal is around Rs. 3000 per metric ton and half of amount are transportation charges. Now the coal transportation charges have been increased by about 20 %, the transportation charges will increase to Rs. 1800 per MT against existing Rs. 1500 per MT. The overall coal cost at receiving end will increase by 10 %.
 
An increase of 10 % implies that fuel cost will exceed 4500 crore against earlier estimate of Rs. 4171 crore. The total gap between receipt and expenditure will increase from Rs. 8983 crore to more than Rs. 9400 crore. This increase will lead to additional increase of generation cost by about 20 paise per unit.
 
As per PSERC tariff order for 2011-12, the variable charges for Ropar and Lehra Mohabatt thermal plants are 191 and 189 paise per unit. The fixed charges are 92 and 124 paise per unit. The generation cost at Ropar and Lehra Mohabatt thermal plants is Rs.2.83 and Rs. 3.13 per unit respectively.

 
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