State-run power major NTPC has joined the chorus of voices opposed to CIL’s new coal pricing mechanism, asserting that it could lead to an increase in its generation cost by about 40 per cent.
The power generation cost of NTPC could go up by about 40 per cent on account of the new pricing system, NTPC CMD, Mr Arup Roy Chaudhary, told reporters on the sidelines of the India Energy Conclave here today.
Power producers are opposed to the CIL’s new pricing mechanism implemented from January 1 based on the gross calorific value (GCV) of coal, saying that this has increased the prices of certain grades by up to 179 per cent.
Till December 31, 2011, Coal India followed a pricing mechanism based on the Useful Heat Value (UHV) of coal, which deducted ash and moisture content from the standard formula.
However, unlike the UHV pricing methodology, in which coal was categorised into seven grades, the GCV-based system has 17 grades and the new prices have been fixed accordingly.
Meanwhile, CIL’s board is likely to review the prices to rationalise them after the Coal Ministry took a decision to correct the prices at a meeting last week.