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Government of India's coal reforms begin to pay off, Which has resulted in reduced power costs

April 28, 2017

SHIMLA : April 28, 2017


Coal sector reforms initiated by the Union Government headed by Hon'ble Prime Minister Sh. Narendra Modi, are beginning to pay. Initiatives to improve coal quality and efficiency in the supply chain have brought down the cost of power from coal-fired plants in spite of revisions in coal prices, central cess and railway freight in the last three years.


            Decline in the cost of power has accrued mainly from power stations burning less coal to generate each unit of electricity on assured quality of domestic fuel.
There is also import substitution worth Rs 23,349 crore, which saves fuel costs.

Since cost of coal makes up 54%-60% of the price charged by power producers and is passed on to consumers, coal consumption has a bearing on tariffs and environmental dividend in terms of emissions. According to government data, power stations are now burning 8% less coal than they used to three years ago for each unit of electricity.


Under the dynamic leadership of Hon'ble Union Minister of Power Sh. Piyush Goyal who also happens to be minister in charge of Coal Ministry, in a significant transformation, India has become power surplus from chronic power shortage. Record capacity addition of around one-fifth of current conventional power capacity and solar power capacity addition of 157% in the last two years led to a boost in power generation. The highest-ever increase in transmission lines and sub-stations improved the transmission scenario resulting in energy deficit falling to lowest ever of 2.1% in 2015-16.
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