Aluminium sector remains the worst hit due to plunge in coal supplies to CPP: ICPPA

On 6^th December 2021, the industry body Indian Captive Power Producers Association (ICPPA) said that coal supplies to captive power plants (CPP) have nosedived to 40%-50% of the requirement, while the aluminium sector is among the worst hit due to the hardship and if permitted to nettle it propels INR 1.4 lakh crores of investment towards risk.

ICPPA further added: “The continued shortage of raw materials to key industries would lead to an increase in aluminium import and loss of export earnings to the tune of INR 70,000 crores.”

"Keeping the above in mind, the Indian Captive Power Producers Association has requested the ministry's (Ministry of Power) immediate intervention for normalising 100 pc coal rakes supplies to CPP (captive power plants) industry and help them to partner the economic development of the nation," the association commented.

“In the last few months, the supplies meant for CPPs and industries have been either stopped or significantly curtailed for diversion of these to the power sector, which has led to a perilous situation for other coal-based power generators (CPP), adversely impacting their industrial operations.”

"The decision of coal diversion left CPP-dependent industry with no time to devise mitigation plans for sustainable operations, forcing CPPs to curtail generation or come to a standstill. On average, captive power plant-based industries are getting less than 50 pc of the coal against secured linkages and CIL (Coal India) auctions. Importantly, curtailment to CPP is continuing despite power sector has come out of the coal crisis," it said.

The association has also professed that any power interruption in aluminium plants will drive fatal and complete shutdown which will take another 12 months to recover, resulting in several lay-offs.

“Financial institutes will have debt exposure of over INR 1 lakh crores and additional national forex loss of INR 90,000 crores”, said ICPPA.

The industry body also spotlighted that aluminium production is a 24x7x 365 days uninterrupted process industry that is considered high power intensive.

ICPPA said: "To meet stringent and continuous power demand the industry has set up their in-house captive power plant of 9,400 MW (9.4 GIN i.e., 34 pc of thermal CPP capacity of the country) with an investment of INR 50,000 crores. The industry can only meet its power requirement through CPPs for which it requires 1.5 lakh tonnes of domestic coal daily (55 million tonnes every year). To meet the extensive coal demand, the industry has set up plants in the vicinity of coal-bearing areas, with power plants designed to operate on domestic coal.”

However, the industry body had lately delegated to the Ministry of Coal, Railways and Power striving for top-priority support for regularising the coal supplies to CPP dependent industries.