Coal News We love to talk!

OCT 28 2014

Coal block de-allocation: Power Ministry eyes the fuel supply agreement route

  • Economic Times, ET Bureau / Hyderabad
  • Created: Tue 28th OCT 2014

To ensure continued fuel supply to coal-based power plants, the Ministry of Power has floated a Cabinet note seeking approval to meet requirements of generators whose linked blocks are to be de-allocated by March 31, 2015.

The Cabinet note, seen by BusinessLine , states the Ministry has sought approval to meet 90 per cent of coal requirement of such plants by signing fuel supply agreements to keep them running at 85 per cent plant load factor. This would include plants constructed after 2009. There is also a proposal to convert tapering linkages of three years into full time linkages of 20 years.

The note recommends that the Ministry of Coal should sign fuel supply agreement to meet the requirements of projects aggregating 4,700 MW.

The proposal does not cover plants where only a Letter of Assurance has been signed.

For such plants, the Power Ministry proposes to allow imported or e-auctioned coal with the pass through in costs to be determined at the appropriate electricity commission. In the event of a shortfall in coal supply, the note recommends pooled prices of domestic and international coal. The proposals, if accepted by the Cabinet Committee on Economic Affairs, is expected to benefit 25,000 MW of capacity in the private sector and help electricity generators like Adani Power, Tata Power, Jindal Steel and Power Ltd, Reliance Power, Essar, GMR, GVK, among others.

If accepted, the move will benefit Adani Power, Tata Power, Reliance, Essar among others

Tags

Adani Enterprise Limited Adani Power Ltd Essar Electric Power Development Corporation Limited Jindal Steel and Power Ltd Coal Reliance Power Ministry of Coal Ministry of Power Coal-based power plants Cabinet Committee on Economic Affairs Fuel Supply Agreement Essar Essar Steel Essar Oil Ltd. Power Tata Power Electricity

Related News

  • Fuel retailers consider differential pricing as competition mounts  Read more
  • In a first, Uttarakhand to use 'clean' German tech to convert waste to energy  Read more
  • Odisha raises electricity duty rate by 1% on industry  Read more
  • Expert Group formed to look into Corridor Allocation Methodology for Power Exchanges  Read more
  • Sites scouted for biggest nuclear fuel fabrication plant  Read more
  • Tamil Nadu farmers hail oil ministry's decision to cancel CBM project  Read more
  • NTPC to fund bad loan clean-up in power space  Read more
  • NTPC to build Indias biggest power plant in joint venture with Jharkhand state utility  Read more
  • Power Ministry to seek Cabinet approval to UMPPs' bid document  Read more
  • Coal India: Waiting for price hikes  Read more