Coal-linkage to Captive Power Plants being ignored: ICPPA

BureauUpdated: Saturday, June 01, 2019, 03:09 PM IST
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Bhubaneswar: Lack of coal-linkage to Captive Power Plants (CPPs) seems to be “hurting” industries and the economy as CPP-based industries directly contribute to 18 per cent of the country’s GDP, an ICPPA official said today.

Chairman of Indian Captive Power Producers Association (ICPPA) Rahul Sharma claimed that CPP-based industries contribute to 5 per cent of forex earnings and employ 16 per cent of country’s total workforce.

Investment scenario in the sector is becoming sluggish for lack of initiative on various fronts, he alleged.

“Today, 382 CPP applications for 40,000 MW-capacity are pending with Ministry of Coal, Ministry of Power and Central Electricity Authority hampering investment of Rs 2 lakh crore directly in CPPs and another Rs 80 lakh crore in end-use industries,” Sharma, who is also Director – Corporate Strategy, Sesa Sterlite Limited, said in a statement.

Post-globalisation, CPPs fuelled country’s growth story and the government too persuaded industries for huge investment in CPPs and treated them equitably with Independent Power Plants (IPPs) and Utilities, he said.

However, post 2004, CPPs were pushed to the wall by discrimination in coal allotment, Sharma alleged adding coal supply to CPPs fell continuously leaving them to operate at very low capacity or remain idle.

This is suffocating for industries as 60 per cent of their power requirement is met by CPPs, the ICPPA Chairman said.

Moreover, CPPs reduce pressure on national grid. If State Electricity Boards and IPPs were to take load of CPPs, the grid will need an overhaul and power deficit will increase threefold. Still, CPPs are ignored in favour of IPPs which hope to meet India’s power needs in 2050, he claimed.

With about 51,000 MW, captive power sector forms 18 per cent of India’s total installed capacity. As 80 per cent of the same is coal-fired, lack of coal linkage has shot up cost burden on dependent industries affecting competitiveness of Indian products in international market, he claimed.

CPPs, like in past, have the potential to fuel the country’s economic growth. Rather than treating them unwanted, it is time to provide them coal-linkage and utilise them for faster recovery of the economy and its long-term sustainability, added Sharma.

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