NEW DELHI: The power ministry’s directive on 10% blending of domestic coal with imported fuel for generating electricity to meet rising demand is expected to push up tariff by 4.5% and widen the cash gap of discoms (distribution companies) to 68 paise per unit from an earlier estimate of 50 paise, rating agency Icra said in a note on Tuesday.
The agency’s estimates coincide with government data showing a 29% jump in the production of Coal India Ltd, which accounts for 80% of the fuel supplied to power plants, and coal-fired generation rising 9% in April from the year-ago period on the back of an 18% increase in fuel despatch.
