Electricity export to Bangladesh can't be done using domestic coal

New Delhi: Targeting NTPC for supplying Bangladesh electricity generated using cheap domestic coal, the Association of Power Producers has written to the government saying such sale violates extant policy and hurts interest of domestic power consumers.

The lobby group, whose members include Tata Power, Reliance Power and Adani Power, asked the government to issue a clarification stating that cross-border supply can be done only of electricity generated using imported coal or the one produced from coal bought through competitive bidding and not through allocations made for meeting domestic demand.

Last month, state-owned NTPC had won a bid to supply 300 megawatts (MW) of electricity to power-starved Bangladesh by beating Adani, PTC and Sembcorp of Singapore. The association in the March 26 letter to the Power Secretary Ajay Kumar Bhalla said the tender for electricity by Bangladesh Power Development Board (BPDB) required bidders to take consent of Indian government if "the power generated from the respective power plants using domestic coal can be exported to Bangladesh throughout the contract period (of 13 years)." "It is likely that this requirement has not been adhered to uniformly by all the bidders," it said without naming NTPC.

The association said the current policy requires the supply of electricity generated using coal sold under long-term supply linkages at government notified price and that sourced from captive coal mines, to only domestic power distribution companies. "This means that any bidder securing BPDB bid based on domestic linkage coal/captive coal would lock in part of domestic coal resources for external consumption for 13 years, thereby hampering domestic consumer interests, and would be violative of the extant policy framework," it said.

The association wanted the power ministry to issue an "instruction" stating that "the coal supplied under domestic linkage or coal from captive mines given for power sector, cannot be utilised for BPDB long-term contracts." Also, the ministry needs to clarify that that cross-border supply of power should be from e-auction/imported coal only. "This (clarification) can be taken up with BPDB, and undertaking from bidders may be made part of the bid, saying that they will not use domestic linkage/captive coal for the supply of cross-border supply of power," it added. NTPC's unit, NTPC Vidyut Vyapar Nigam Ltd (NVVN) is to first supply power to Bangladesh on short-term (June 1, 2018, to December 31, 2019) and then on long-term (January 1, 2020, to May 31, 2033).