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JUL 04 2015

Norms evolved for coal linkage to power companies without PPAs

  • Economic Times, ET Bureau / Hyderabad
  • Created: Sat 04th JUL 2015

The government has evolved a mechanism for supplying coal to stressed power companies without blocks through an auction route, under which two e-auction windows would be created, Union Minster for Coal, Power and Renewable Energy, Piyush Goyal said.

He also said that the Centre was coming out with a tariff policy and a policy for bidding for Ultra Mega Power Plants (UMPP).

Addressing members of the Bharat Chamber of Commerce here on Friday, he said that the Ministry has decided to create two separate e-auction windows for coal, under which the floor price of coal would be linked with the status of the power purchase agreements that the companies hold. Power companies without a PPA (Power Purchase Agreement) will have to bid at prices, which are 40 per cent above the CIL notified price and they would be free to sell the power. Those companies with PPAs but without a letter of assurance (for coal supply) will bid at 20 per cent above the CIL price, the minister said that each of these category of companies would get an initial amount of five million tonne of coal as the Ministry finalises its new auction-based coal linkage policy.

Speaking later at a meeting of the Coal Consumers Association of India, he said “this is a fair price and will be lower than import price of coal. COAI said that cancelling existing linkages would jeopardise the entire economics of the organisation, besides encouraging coal imports.

He said that bidding for the UMPP projects is set to start soon as final consultations were now underway for finalising the standard bid documents in line with the recommendations made by the panel set up by the government in January for evolving a standard bid documents. He said that the government was coming out with a tariff policy, which will give discoms ability to buy more power. The Minister, however, was opposed to any bailout of the stressed discoms saying “we have severe stress but it will have to be brought down in a calibrated manner. Short term stress is better than long-term collapse” he remarked. A new State-wise plan is needed, he said. With the government working towards energy security and power for all by 2019, major projects for enhancing transmission network is being taken up. Around 700 MW would be added to the Southern transmission grid in the next few days.



Uttar Pradesh Grid Renewable Energy Coal Coal India Limited Tariff Power Purchase Agreement Energy Security Energy Import Ultra Mega Power Project CIL Power Tariff policy India

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