Power ministry seeks fresh coal linkages

The linkages would facilitate an additional 33,000 Mw coal-based capacity projected for commissioning in the 13th Five-Year Plan

With fuel supply in place for 78,000 Mw of stressed power generation capacity, the power ministry has asked the coal ministry to commit fresh coal linkages for an additional 33,000 Mw coal-based capacity projected for commissioning in the 13th Five-Year Plan period beginning April 2017.

“The coal ministry has not awarded any new linkages (letters of intent followed by fuel supply agreements) since 2010, which has led to non-finalisation of fresh orders for future projects,” the power ministry said in a letter to the coal ministry.

Between 2006 and 2010, the coal ministry had awarded linkages for 103,000 Mw. With lack of green clearances impacting the output of Coal India, no new linkages have been given since then.

“The coal ministry is requested to consider fresh linkage for the 13th Plan projects in the next three months. In the absence of a clear picture regarding linkages, the capacity addition programme would be adversely affected,” said the power ministry.

India wants to add a total of 86,000 Mw power generation capacity in the 13th Plan period. Around 66,000 Mw of this will be coal-based. Further, 40,000 Mw of this capacity will either be based on existing linkages or come up on captive coal blocks. This will leave 26,000 Mw without firm coal supply.

However, the power ministry wants the coal ministry to provide additional linkages for 33,000 Mw in view of likely delays in environment and forest clearances and land acquisition.

“For the remaining 26,000 Mw capacity addition, we need to plan for 30 per cent additional linkage because of uncertainties,” said the ministry.

Coal India had told the ministry in July that its incremental production by the end of the 13th Plan period in 2021-22 is likely to be around 180 million tonnes.

Around 80 per cent of this – 144 mt – would be available for the power sector, which would support 30,000 Mw capacity.

Additional production from captive coal blocks is likely to be around 100 mt, which would support another 20,000 Mw.