Pvt power firms for level-playing field in coal allocation

Private power companies in a letter to the Coal Ministry has asked for a level-playing field in allocation of the natural resource and printed out that imports is not the solution to country's fuel problem.

"Supply of low and varied quantities of indigenous coal may lead to serious functional ramifications for the power plants,"  Ashok Khurana, Director General, Association of Power Producers said in a letter to Coal Secretary Alok Perti.

"The boilers here can accept only a blend of not more than 15-20% of the imported with domestic coal," he said, adding that this technical constraint makes it difficult for the existing thermal plants to provide undertaking for accepting unspecified quantity of imported coal.

Khurana also said that coal is a scarce natural resource and it must be distributed on the basis of its efficient use and in a manner to maximise benefit to the end consumers of power.

Coal should be allocated, based on the merits of projects and not on the basis of ownership, he said.

The Fuel Supply Agreements (FSAs) are granted for a period of five years, whereas the commitment of supply of energy under the power purchase agreement is between 25-30 years...

....For a developer to meet it's obligations to the procurer, there cannot be any disconnect between PPA and FSA, he added.

The lenders would also be extremely reluctant to finance a project which has no sustained and assured supply of fuel, he said.