In a significant move, power sector
regulator CERC has decided to provide 50 per cent weightage for
Indonesian coal in the benchmark index that is used to determine
escalation rates for electricity generated using imported dry fuel. The move would help in having a benchmark in deciding the escalation
rates for electricity generated by power plants that are fired by
Indonesian coal.It also assumes significance amid deadlock between various power
generators and procurers over increasing the electricity tariff due to
rise in imported coal prices.
The Central Electricity Regulatory Commission (CERC) has decided to
include Indonesian coal, besides South African and Australian dry fuel,
in the composite index for imported coal for payment purposes.Currently for payment purposes, the index takes into account only Australian and South African coal. The Commission said the decision to revise the index has been taken
after considering the composition of steam coal imports as well as the
importance and acceptability of indices in international contracts.
“The weights of different coal in the composite index shall include
25 per cent Australian coal, 25 per cent South African coal, and 50 per
cent Indonesian coal,” the Commission said in an order dated December
23.
CERC has the mandate to notify the escalation rates for imported coal
used to fire power plants. These rates are notified every six months.
According to the watchdog, Indonesian coal has been included in the
index considering that it makes up for a pre- dominant share of steam
coal imports into the country.
Source: Business Standard
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