Adani Power's request for domestic coal may benefit other projects

Adani Power’s request for domestic coal linkage for its 4,620-megawatt (Mw) imported coal-based project may pave the way for improved coal supply to other such projects.

While taking a decision on Adani Power’s request in its meeting on Monday, the inter-ministerial standing linkage committee (SLC) is understood to have asked the power ministry to prepare a list of all such imported coal-based projects seeking indigenous coal. “The matter will be taken up again, after considering the power ministry’s list, including the Mundra project,” an official who attended the meeting told Business Standard.

Adani Power had sought an earlier decision granting 30 per cent linkage for the Rs 25,000-crore project be restored. The SLC is headed by the ministry’s additional secretary Zohra Chatterjee. Its members include officials from the power, coal and railway ministries, the Planning Commission and Coal India Chairman S Narsing Rao.

In January 2010, the panel had decided to grant coal linkage to the project to meet the 30 per cent requirement from Coal India Limited.

However, that decision was reviewed in April 2011, after the miner refused to meet the commitment, arguing the Planning Commission’s estimate given to it hadn’t considered domestic coal supply for imported coal-based stations.

Owing to uncertainty in imported coal supply for such projects, the power ministry had favored supplying coal to them.

In February 2012, the panel had asked the power ministry to clarify the change on the imported coal scenario and justify the change in the April 2011 decision, according to the coal ministry. The power ministry had then said Adani Power had carried out a technical study on this. According to the study, the plant was running on a low plant load factor (PLF), as it was designed to use 30 per cent indigenous blended coal, which wasn’t available.

Currently, the project is running at 85 per cent PLF. The power ministry has recommended the restoration of the original 30 per cent domestic linkage for imported coal-based plants.