Policy for coal linkage transfer to new power units on anvil

The government will come out with a policy to facilitate the transfer of coal linkages from old retiring power plants of public sector utilities to new units.

The move is likely to reduce the consumption of coal by the power plants amid the country facing fuel shortages.

"As far as transfer of coal linkage from old plants to the new one is concerned in respect of public sector/state public sector power utilities, a policy in this regard is to be finalised," the Coal Ministry said in document.

However, it said the issue of scrapping of old units by replacing them with new units of similar or bigger size comes under the purview of Ministry of Power.

The matter is also likely to come up for discussion during meeting under the chairmanship of Additional Secretary Coal A K Dubey likely soon.

During the meeting the officials from ministries like coal, power, railways and steel may deliberate on the issues like capacity of the plant, quantum of coal linkage, location of the new plant and duration of the replacement of plants.

The issue of transfer of linkages had also come up for discussion when Coal and Power Minister Piyush Goyal had a meeting with Coal Secretary S K Srivastava and Power Secretary Pradeep Kumar Sinha a fortnight back, sources said.

The Power Ministry had earlier taken up with the Coal Ministry the proposal to convert/transfer coal linkage of old retiring units to new efficient units, sources said, adding that the "state sector plants identified to be phased out are around 5000 MW capacity."

The demand-supply gap of coal which was 171 million tonnes last fiscal is estimated to touch 185 million tonnes in 2016-17.