Cabinet approves GoM recommendations on Stressed Thermal Power Projects

Many of the issues affecting the Thermal Power Sector are likely to get resolved

The Cabinet Committee on Economic Affairs chaired by the Prime Minister has approved the recommendations of Group of Ministers (GoM) constituted to examine the specific recommendations of High Level Empowered Committee (HLEC) constituted to address the issues of Stressed Thermal Power Projects.

The CCEA has approved recommendations of the GoM mainly relating to grant of linkage coal for short-term PPA, allowed existing coal linkage to be used in case of termination of PPAs due to payment default by DISCOMs, procurement of bulk power by a nodal agency against pre-declared linkages, Central/State Gencos may act as an aggregator of power, increase in quantity of coal for special forward e-auction for power sector, coal linkage auctions to be held at regular intervals, non-lapsing of short supplies of coal, ACQ to be determined based on efficiency, payment of Late Payment Surcharge (LPS) made mandatory, non-cancellation of PPA/FSA/LTOA post NCLT scenario and non-cancellation of PPA for non-compliance of COD. With the implementation of these recommendations, many of the issues affecting the Thermal Power Sector are likely to get resolved.

The Government of India constituted a High Level Empowered Committee (HLEC) under the Chairmanship of Cabinet Secretary to address the issues of stressed thermal power projects. The committee made its recommendations to resolve the stress in thermal power sector and submitted its report in November 2018. The report of HLEC is available on the website of Ministry of Power. The Government thereafter constituted a Group of Ministers (GoM) to examine the specific recommendations of HLEC and forward its comments for consideration of the Cabinet. Subsequently GoM recommended majority of HLEC recommendations.

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