Government allows one-time coal linkage rationalisation for power producers

21 May 2018

The government has issued the guidelines to allow power producers to swap coal supply assurances in exchange for lowering tariffs. A Coal Ministry statement said, “The one-time process of calling for the requests of the Independent Power Producers for linkage rationalisation shall be undertaken jointly by Coal India, South Eastern Coalfields and the Central Electricity Authority in a transparent manner.”

Only Independent Power Producers (IPPs) having coal linkages through the allotment route will be eligible to avail of this facility. “The IPPs shall also be stating the Minimum Order Quantity for which the linkage rationalisation shall be requested and their preferred mode of transportation after the linkage rationalisation,” the statement added.

The power producers will have to pass-through the savings achieved due to reduction in the landed price of coal, to the discom and consumers of power. The Fuel Supply Agreement (FSA) of the rationalised source from any coal company would be signed and implemented only after the appropriate Electricity Regulatory Commission approves the supplementary agreement. The reduced landed price of coal would lead to savings in cost of power generated and would reduce the transportation cost of coal, the statement added.

Source: THE HINDU BUSINESSLINE