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Govt clears coal linkage methodology for power producers

Press Trust of India  |  New Delhi 

The government today said it has finalised the methodology for rationalisation of coal linkages for independent power producers (IPP).

Under the new methodology, dry fuel can be supplied to plants by a other than the one with which they have signed the pact.

The methodology was approved on the basis of the recommendations of a an to optimise transportation cost, among other benefits.

"Coal linkage rationalisation shall be an exercise in which the coal linkage of a TPP (thermal power plant) of an may be transferred from one to another based on the availability during the fiscal and future coal production plan of the coal company," the said in a statement.

It said an (IMTF) was constituted to undertake a comprehensive review of existing coal sources of IPPs having linkages and consider the feasibility for rationalisation of these sources with a view to optimise transportation cost, given the various technical constraints.

The statement said the exercise will be voluntary on the part of the TPPs and aims aims to reduce the distance by which coal travels, thus, easing up the for utilisation for other sectors.

"The one time process of calling for the requests of the for linkage rationalisation shall be undertaken jointly by CIL, SCCL and CEA in a transparent manner," it said.

This linkage rationalization shall be considered only for IPPs having linkages through allotment route, the statement said, adding that they will also state the Minimum Order Quantity (MOQ) for which the linkage rationalisation shall be requested.

It said the Fuel Supply Agreement (FSA) of the rationalized source from any would be signed/implemented only after the appropriate approves the supplementary agreement.

On disputes, the government said these will be resolved as per the provision of the Arbitration and Conciliation Act.

"The proposed rationalisation of linkages is transparent, objective and creates a level playing field for IPPs in each domain. It attempts to make optimal rationalisation of the vital natural resources across the power units of IPPs," the statement said.

It said the reduced landed price of coal will lead to savings in the cost of power generated as well as

The savings will be passed on to the Discom/ consumers of power.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 16 2018. 14:15 IST