By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
BeFirsTrankBeFirsTrank
  • Home
  • Car Reviews
  • Auto Shows
  • Bike Reviews
  • Future
  • New Car
  • Used Car
  • Contact Us !
Reading: High Imported Coal Price May Hit Power Sector: Report
Share
Aa
Aa
BeFirsTrankBeFirsTrank
  • Home
  • Car Reviews
  • Auto Shows
  • Bike Reviews
  • Future
  • New Car
  • Used Car
  • Contact Us !
Search
  • Home
  • Car Reviews
  • Auto Shows
  • Bike Reviews
  • Future
  • New Car
  • Used Car
  • Contact Us !
Have an existing account? Sign In
Follow US
© 2023 BeFirsTrank News Network
News

High Imported Coal Price May Hit Power Sector: Report

srijita
Last updated: 2016/11/09 at 4:55 AM
By srijita 3 Min Read
Share
SHARE
High Imported Coal Price May Hit Power Sector: Report

New Delhi: The rise in imported coal prices is likely to have a negative impact on the power sector value chain as higher rates create “volume and profitability pressures” on discoms that are not able to pass on fuel cost increase to end-consumers due to “political intervention”.

“The 60 per cent rise in imported coal prices between April-October 2016 is likely to negatively impact the power sector value chain,” Ind-Ra has said.

Historically, the ability of the distribution companies (discoms) to pass on fuel cost increases to the end-consumers has been limited and delayed due to the political intervention in the tariffs, the rating agency said.
The distribution companies, independent power producers (IPPs) with non-escalable fuel cost, merchant IPPs and ports relying on imported coal for the bulk of their volumes will face volume and profitability pressures, it said in a statement.

“The increase in imported coal prices was more pronounced in October 2016, wherein prices rose by 25 per cent to around $85/t (tonne) from $68/t in September 2016,” it said.

The regulatory commissions can allow a pass-through of such costs by way of power purchase and fuel cost adjustment (PPFCA) since power purchase cost is an uncontrollable expense for the discoms, it added.

However, anecdotal evidence suggests that most state regulatory commissions have not allowed for such PPFCA adjustments on an actual and timely basis, which has led to an escalation in the power purchase cost of discoms, without a commensurate increase in revenues, the rating agency said.

“Ind-Ra expects merchant IPPs which sell power through the merchant route to be impacted significantly since the prices on the exchanges/bilateral trades have not moved up at the same rate…as the rise in variable cost of generation (25%) in October 2016, on account of the imported coal price increases,” it said.

“Thus leading to a significant compression in their gross margins, which have fallen to zero in October 2016. Hence the viability of merchant IPPs on imported coal is doubtful in thecurrent price scenario,” it added.

[“source-ndtv”]

You Might Also Like

Step by Step in Selling Your Car Online

Why Use BMW Km Stopper?

Strategies to Attract Qualified Truck Drivers and Retain Them Long-Term

Rent a McLaren for Your Next Luxury Trip

Qualities of Handicap Vehicles For Sale

TAGGED: Coal, High, Hit, Imported, May, Power, Price, Report, sector
srijita November 9, 2016
Share
Previous Article Penalty Of $1.55 Billion On Reliance Industries Exaggerated: Brokerages
Next Article Big Oil’s Entry To Heat Up India, World’s Fastest Growing Hub Of Demand

Calendar

September 2023
M T W T F S S
 123
45678910
11121314151617
18192021222324
252627282930  
« Jun    

Latest Trending News

  • Step by Step in Selling Your Car Online June 19, 2023
  • Why Use BMW Km Stopper? April 28, 2023
  • Strategies to Attract Qualified Truck Drivers and Retain Them Long-Term March 28, 2023
  • Rent a McLaren for Your Next Luxury Trip March 2, 2023
  • Qualities of Handicap Vehicles For Sale December 10, 2022
  • Characteristics of Electric Road Bikes October 13, 2022
  • The Advantages of Digital Marketing October 12, 2022

© 2023 Befirstrank News Network. All Rights Reserved.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?