Power costs may soar

Power costs may soar

Finance Minister Pranab Mukherjee had proposed to levy a clean energy cess of Rs 50 per tonne of coal, both produced in India and imported. The minister said the cess would go to the national clean energy fund for financing research and innovative projects in clean technologies.

“A cess of Rs 50 per tonne implies a 7-8 per cent increase in the price of coal which translates to 4-5 paise increase in the cost of power generation per unit,” a senior official in the Ministry of Power told Deccan Herald.

As India’s annual coal production touched over 500 million tonne, the country has emerged as the third biggest producer as well as consumer of coal in the world. Of the total energy generated in the country, 75 per cent comes from coal fired thermal power projects. It is expected that coal-based power generating companies are likely to pass on the cess burden to consumers. However, the state governments have to take a decision on increasing the prices of power as it is always a sensitive issue, said the official.

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