You are here: Home » Economy & Policy » News
Business Standard

Coal ministry to kick off auctions in August for IPPs without PPAs

For IPPs with PPAs based on imported coal, an inter-min panel has been formed to work out modalities

Jayajit Dash  |  Bhubaneswar 

Photo: Reuters
Photo: Reuters

The coal ministry has decided to set in motion the auctions for providing to the independent power producers (IPPs) that are yet to tie up power purchase agreements (PPAs).

The process for auctions would take off in August this year. Earlier, the methodology for offering to having based on domestic coal was fixed by the ministry on June 12, 2017. Later, (CIL) formed a committee with representatives from the power ministry and Central Electricity Authority (CEA) and convened meetings. is expected to take the approval of its board by July 21 on the methodology and thereafter, the auction process for such are likely to start by the end of this month.

For providing to with based on imported coal, an inter-ministerial committee has been constituted to work out the modalities.

"Providing coal to having no is a welcome step. Without coal or power offtake agreements, the are finding it tough to raise credit to finance their projects. have also dried out to weak power demand and poor financial health of electricity distribution companies," said an official with an

Poor financial health of the electricity distribution companies (discoms) has impacted offtake. Mounting aggregate technical & commercial (AT&C) losses coupled with operational inefficiencies of the state discoms has led to their outstanding debt shooting to Rs 3.95 lakh crore.

Weak industrial demand for power has seen the average plant load factor (PLF) of thermal power producers tank to an all-time low of 59.88 per cent in 2016-17 from the level of 77.5 per cent in 2009-10.

According to the power sector linkage policy, coal is supplied to the extent of 75 per cent of the annual contracted quantity to power capacities of 68,000 megawatts (Mw). In the April-June quarter of this financial year (FY), coal despatches by to the power sector stood at 104.8 million tonnes (mt), recording growth of 2.4 per cent.

First Published: Tue, July 18 2017. 21:21 IST