Power producers, which are bullish over Centre's recent reforms, have made a strong pitch for a policy clarity on quantum of domestic fuel supply under fuel supply agreement (FSA) and quantum of imported fuel to be blended to achieve 80% trigger level. Both the state-run power utilities and independent power producers have argued that a correct policy directive would help them to align their power production and plans. The policy clarity was still not in place despite the issue has been pursued regularly since it was flagged off during the Prime Minister's intervention in January.
The Prime Minister's office has recently said that a 65% trigger level would be maintained for the first three years and the Coal India has been directed to increase the trigger level from the fourth year by 80%.
Ashok Khurana, director general, Association of Power Producers (APP) told Business Standard "There is an urgent need for a policy clarity especially from the ministries of power and coal on the availability of fuel especially for the prospective period. This will naturally improve planning for generation." He added that policy clarity would certainty of fuel availability for the power developers
Senior official of IPP, who did not want to be identified, said currently there been a complete adhocism as far as fuel supply is concerned. "Generators will need to know the quantum and the price at which coal will be available especially to meet the normative availability of 65 per cent."
Khurana admitted that the Attorney General's opinion that the central regulator can reopen long term supply agreements in cases such as rise in fuel price was a positive. Already some of the IPPs have approached the central regulator. Similarly, some IPPs will approach state regulators as they supply within the state." However, he reiterated that a policy clarity was quite essential. He informed that at present about 35,000 MW of power plants cannot produce their full output because of fuel shortage that is coal and gas.
Power producers' plea is crucial especially when some of the IPPs have delayed commercialization of future capacities for lack of power purchase agreement.
An official of the Maharashtra State Power Generation Company (MahaGenco) said its generation was affecting due to inconsistency and lack of regularity in coal supply from Coal India subsidiaries. "MahaGenco has been sanctioned 9.13 million ton of F grade coal from Mahanadi Coalfields (MCL) its news projects with total generation capacity of 2,000 MW. It has yet to sign FSA with MCL considering the logistic issues." As far as taper linkage for new projects is concerned, coal production from Machhakata mines would be delayed due to land acquisition, environment clearance and common rail corridor.
