State-owned monopoly miner Coal India has announced its intention to reduce supplies to captive power plants being operated by energy intensive industries, which account for 15% of the country’s power generation capacity.
The options for CPP will be to run their industries partly on captive power and then on grid power; which at times can be unreliable.
The other option is to import coal to bridge the gap. But imported coal will be more expensive.
The operators of captive power plants that cannot afford to import coal will have to bank on grid power, which is not reliable, particularly during summers.
If this was not enough, CIL has also announced an increase in coal prices.
Captive Power Plants that are already getting used to the new concepts such as RPOs and RECs now have more battles on their hand.
In such a case, maybe an option to look at solar power plants using OPEX model will be quite beneficial for them to bridge the gap; rather than import coal.
These industries are huge players and maybe solar on CAPEX may also not be a bad option for them.
But the fact that they are spending a lot of time, efforts and money into power which is a supplementary to their main business, may push these industries to look at OPEX model.