The government has directed coal companies to supply fuel to power plants that have been commissioned this year through the MoU route till issues related to fuel supply pacts are resolved.
The latest directive would benefit as much as 8,800 MW of electricity generation capacity that has come up in the first three months of 2012, sources said.
"The Ministry of Coal has issued a directive to coal companies to supply coal to power plants commissioned till March 31, 2012 as well as those to be commissioned during 2012-13 through the MOU route as the FSAs are getting delayed," the Power Ministry said in a release today.
"With this directive, the commissioned plants would be able to generate power without facing disruption of coal supply," it added.
An MoU is not a legally binding document and now, that route would be used till the issues regarding Fuel Supply Agreement (FSA) are resolved.
The Association of Power Producers (APP) Director General Ashok Khurana said the latest directive is a welcome move. APP, a grouping of 24 leading power producers, had also taken up the issue with the Power and Coal Ministries as well as the Prime Minister's Office.
"This (directive) will ensure that fuel supply will not be disrupted for power projects that came up between January 1, 2012 and March 31, 2012," Khurana told PTI.
Concerned over the delay in signing of FSAs, the Power Ministry had taken up the issue of ensuring fuel supply to power plants with the Coal Ministry.
"In this regard, the Ministry of Coal was requested to issue a directive to coal companies to ensure supply of coal to power units which have been commissioned or are likely to be commissioned this year," the release said.
As per the release, the quantity of coal to be supplied to these power plants would be decided in consultation with the Central Electricity Authority (CEA) till FSAs for these projects are signed.
Most of the power companies have expressed concerns on certain clauses, such as those related to penalty, in the revised FSA mooted by Coal India Ltd.
CEA, the power sector planning body, on Wednesday held discussion with major power producers to gather their views on the FSA.