State seeks 13% free power from coal washery plants

Developers generating power from coal washery rejects in Orissa would have to share 12 per cent free power with the state in line with the National Hydro Policy of Government of India.

In addition to this, such developers would also have to set aside one per cent free power for people of peripheral areas affected by the project.

“A committee was constituted under finance secretary to suggest policy recommendations for power plants based on coal washery rejects. Since the state has to bear the pollution load from coal washing and subsequent power generation, the committee has suggested that such power producers have to share 13 per cent free power, including one per cent free power for project affected people. The state government will frame policy guidelines after the approval of the Chief Minister,” said a highly placed official source.

 

Last year, the state government had issued a notification, making it mandatory for power plants based on coal washery rejects would have to supply 33 per cent free power to a nominated agency authorized by the state.

“The demand for free power had to be scaled down to 13 per cent in the face of opposition from the industry. We also felt that demanding 33 per cent free power was unreasonable,” the source added.

The notification was issued on September 8 by the steel & mines department after decision taken by the High Level Clearance Authority headed by the chief minister on May 4 last year.

According to the notification, such power plants shall also pay an annual contribution at the rate of six paisa per unit of the energy sold outside the state towards Environment Management Fund.

The establishment of coal washing plants shall be restricted to coal mining lease area or within close vicinity of mining areas so that the ash generated could be easily used for filing mining voids.

Since coal washing does not require good quality water, the companies would make use of mine drainage water in their process. The companies are also required to explore and adopt dry washing technologies. The coal companies would contribute towards a fund as may be decided by the steel & mines department for environment protection, resettlement and rehabilitation of people from coal bearing areas and for upgradation of social and physical infrastructure in the state.

Washing of coal within the state had snowballed into a major issue with the Orissa government drawing the attention of the Union ministry of environment & forests (MoEF) on the issue.

The state government had urged the ministry not to insist on use of washed coal in thermal power plants.

Besides demanding free power from plants based on coal washery rejects, the state government is also keen on incorporating a clause at the MoU (Memorandum of Understanding) level according to which the thermal power generators will have to give their consent to offer 25 per cent free power. The free power clause is set to figure in all MoUs that are to be signed in the future with thermal power producers.