IPPs urge State Govt to reduce water charge for thermal plants
Bhubaneswar: Independent Power Producers (IPPs), who are facing problems of rising cost and falling energy tariff, have urged Odisha Government to reduce water charge for their thermal plants in the State, an industry body official said on Wednesday.
The Association of Power Producers has written to Water Resources Minister Raghunandan Das and Energy Minister Dibya Shankar Mishra, alleging that the bills for water have been raised on the allocation basis, not on the actual consumption.
Water consumed by a thermal power plant in the State is around 58 per cent of the allocated quantity, the Association’s Director-General Ashok Khurana said. “For a 1,050 MW power plant in Odisha, the allocated quantity of water is 22 million cubic metre a year, whereas the quantity consumed is only 58 per cent,” he said.
Khurana also said the unit has to bear an annual cost of Rs 13.30 crore as water charge, though the consumption of the resource in value term could be Rs 7.7 crore a year. With the steady rise of renewable energy and falling tariff levels, IPPs have been witnessing a decline in the plant load factor (PLF) from 78 per cent in the 2009-10 fiscal to 51 per cent in 2020-21, the industry body said.
The Association claimed that the power plants located in Maharashtra are paying water bills based on consumption, not on allocation, resulting in significant cost savings. The annual increase in water charge by 10 per cent, as per the provisions of Odisha Irrigation (Amendment) Rules, 2015, has also led to a rise in cost from Rs 4.5 per cubic metre in FY17 to Rs 6.3 in FY21. “IPPs do not have any power to fix prices. They are locked into quoted tariffs under long term contracts,” the industry body said.
The regular increase in water charge does not fall under the “Change in Law” provision, and hence the cost has to be borne by the power producers, leading to a deterioration of their financial viability, it added.