A senior government official said that state-owned Rural Electrification Corp (
) is considering lending short-term bill payment loans to private and public power utilities.
“The loans will allow distribution companies to pay their contributions to power plants and transportation costs on time,” the official said. He said the loans will be within working capital limits under other central programs including Ujwal Discom Assurance Yojana (Uday) and will also be offered based on guarantees from the state government.
Electricity utilities from states like Andhra Pradesh recently requested financial support from the central government as high spot electricity prices soared due to a crisis triggered by low stocks of coal in power plants.
On Wednesday, average spot prices on the Indian Energy Exchange day-ahead market climbed again to Rs 6 per unit due to strong demand from Andhra Pradesh, Tamil Nadu, Gujarat and Maharashtra. The rains at the end of last week had lowered prices to Rs 4 per unit.
Data on the Ministry of Union Power’s Praapti portal showed that the dues accumulated at the beginning of October were around Rs 93,500 crore and are expected to reach Rs 99,000 crore by the end of the month.
The general manager of the Association of Electricity Producers, Ashok Khurana, said it was a welcome move. “It is understood that the Department of Energy plans to put in place a program that will ease the liquidity position of nightclubs and help them pay their electricity bills,” he said.
The proposed loans are being developed at a time when the Center is asking power projects to build up adequate coal stocks for the summer season, when peak demand is expected to reach 200 GW. Private electricity companies pay advances to coal companies.
ET reported on Oct. 19 that thermal power plants located far from mines will need to maintain sufficient coal stocks to operate at 75 percent of capacity for at least 20 days, under new standards the government is expected to notify soon to avert an energy crisis. . in the future.
India is in the throes of an energy crisis with power stations running out of fuel as demand increased as rains hit the domestic coal supply and expensive imported fuel made nearly 18 GW of capacity unsustainable.
Data available through October 19 showed that plants with a monitored power capacity of 165 GW had four days of average coal stock. Almost 93 Gw of capacity was running on a coal stock of less than four days.