Short-term fuel supply to power projects extended till June

The government has extended till June-end short-term supply of coal to power plants, which had lost their mines after the Supreme Court cancelled licences of 204 blocks last year.

To avert disruption in power generation, the government had earlier asked state miner Coal India to supply fuel to such power plants on a tapering basis till March 31, subject to review after that date.

In a fresh directive, the Coal Ministry said that supply of fuel to power plants, the blocks of which were cancelled by the Supreme Court last year, will continue till June-end.

"However, in case of supply of coal starts from schedule II (producing) blocks allocated to fresh allocatees in the current auction process, the dispensation shall cease in respect of the units linked to such coal blocks," it said.

The decision follows the recommendation of the Standing Linkage Committee (Long-Term) for Power, it added.

The committee suggested that "the supply of coal to those units which were getting supplies on tapering basis on the date of judgement of SC (September 24, 2014), should continue to get supplies at the same level of quantity till June 30, 2015 since these are running plants."

The short-term fuel or tapering linkage is provided to those consumers which have been allocated captive coal blocks but they could not develop mine on time.

The dispensation will apply to those power plants which are part of 78,000 MW list approved by the Cabinet Committee on Economic Affairs (CCEA) and are running, and have long-term power purchase agreements (PPAs).

The apex court in September last year cancelled licences of 204 coal blocks. Recently the government conducted auction of mines in two phases and put on sale 29 mines.