Centre allows tolling of up to 25% for thermal power plants

Cabinet clears use of land not meant for coal mining

Amidst rising power demand from states and coal supply shortages, the Centre on Wednesday allowed “tolling” of up to 25 per cent for thermal power plants and suggested that power generation companies look to import coal for blending up to 10 per cent. Additionally, the Cabinet approved a policy for utilisation of non-minable land for development and setting up of infrastructure relating to coal and energy.

In an official statement, the power ministry said tolling facilities will be allowed up to 25 per cent of linkage coal for certain power generation companies to avoid long-distance coal transport.

This came after a review of the operation of imported coal-based plants and import of coal for blending by states, by Union Power Minister RK Singh.

“This will enable states to optimally utilise their linkage coal in the plants nearer to the mines as it would be easier to transmit electricity instead of coal transport to far-off states,” Singh said, according to the official statement.

In the review chaired by Singh, a list of targets for states and power producers was drafted to ensure delivery of coal for blending purposes. “State-wise and Genco-wise targets were fixed and it was urged to ensure delivery of coal for blending before onset of monsoon as domestic coal supply gets affected during rainy season,” the statement said.

“The minister took review of the operations of imported coal-based plants and directed all the procurer states to ensure that all ICB plants are operational at fair and reasonable tariffs. It was decided to resolve all the operational issues in ICB plants and make them fully functional,” the statement said.

India is likely to face more power cuts this summer with utilities’ coal inventories remaining at a nine-year low pre-summer levels while the electricity demand is likely to rise amidst a severe heat wave in various parts of the country. States such as Maharashtra and Andhra Pradesh have already started implementing compulsory power cuts, according to news reports.

Separately on Wednesday, the Cabinet approved a policy, which provides a framework for utilisation of lands that are no longer suitable or economically viable for coal mining activities; or lands from which coal has been mined out and has been reclaimed.

“With the objectives of facilitating utilisation of lands, which are mined out or are practically unsuitable for coal mining and for increasing investment and job creation in coal sector, the Union Cabinet has approved the policy for use of land acquired under the Coal Bearing Areas (Acquisition & Development) Act, 1957 (CBA Act),” the coal ministry said in a statement.

State-owned companies like Coal India Ltd (CIL) and its subsidiaries shall remain owners of these lands acquired under the CBA Act and the policy allows only leasing of the land for the specified purposes given in the policy.

According to the policy, PSUs can deploy private capital in joint projects for coal and energy-related infrastructure development activities. The government company, which owns the land, would lease it for a specific period given under the policy and the entities for leasing will be selected through a transparent, fair and competitive bid process and mechanism in order to achieve optimal value.

The lands will be considered for activities such as setting up washeries, coal gasification and coal-to-chemical plants and to set up or provide for energy-related infrastructure.

Under the approved policy, establishment of various coal- and energy-related infrastructure, without transfer of ownership from government companies, would lead to generation of a large number of direct and indirect employment opportunities, the statement said.

This unlocking of non-minable land for other purposes will also help Coal India to reduce its cost of operations and set up coal-related infrastructure and other projects, it added.

“The policy will unlock land for various coal and energy infrastructure development activities that would encourage investment in backward areas of the country,” it said.

Utilisation of already acquired land would also prevent fresh acquisition of land and related displacement and would promote local manufacturing and industries, the statement said.