New coal linkage policy
The Central government on May 17 approved a new coal linkage policy to ensure all power projects get adequate supply through a bid process or power...
The Central government on May 17 approved a new coal linkage policy to ensure all power projects get adequate supply through a bid process or power purchase agreements, to help debt-laden generators which have had to import coal despite adequate domestic stockpiles. Under the policy, state- and central government-owned power generating companies will be granted fuel on the basis of recommendations by the power ministry. Other companies will have to go through a bidding process, the government said in a statement.
Shakti or the Scheme to Harness and Allocate Koyla (Coal) Transparently in India, it aims to auction long-term coal linkages to power companies. It is expected to revive 30,000 Mw of power plants in the country, which are awaiting fuel supply. It hopes to may ease stress on account of non-availability of linkages to power sector projects. The coal supply to the TPPs has been made as per the provisions of the New Coal Distribution Policy (NCDP), 2007.
Till 2010, CIL had issued LoA for approximately 1,08,000 MW capacity and no new LoAs were issued thereafter due to the prevailing scarcity scenario. The CCEA decision of 21.06.13 directed CIL to sign FSA with TPPs of about 78,000 MW capacity. The coal availability scenario has, now, emerged from scarcity to adequacy. In this adequate coal availability scenario, the present policy proposes a fading away of the old linkage allocation policy and emergence of a new linkage allocation policy based on transparent and objective criteria for the optimal utilisation of the natural resources.
Thermal Power Plants (TPPs) having LoA (Letter of Assurance) shall be eligible to sign FSA (Fuel Supply Agreement) after ensuring that the plants are commissioned, respective milestones met, all specified conditions of the LoA fulfilled within specified timeframe and where nothing adverse is detected against the LoA holders and the TPPs are commissioned before 31.03.22. TPPs, part of 78000 MW, that could not be commissioned by 31.03.15 shall now be eligible for coal drawal if the plants are commissioned before 31.03.22. Actual coal supplies to all TPPs shall be to the extent of long term PPAs or medium term PPAs to be concluded in future.