Power plants seek extension of temporary coal supply agreements

Source: ET ENERGY WORLD

Coal-fired power plants with total installed capacity of around 9,000 MW are asking for extension of temporary coal supply contracts for at least six years, since they have not been able to start production from the captive blocks allotted to them more than three years ago.

Delays in land acquisition, forest clearance and issue of possession letters from states have delayed production at these mines. These plants are likely to require between 35 million and 40 million tonnes of coal to run at 80% capacity. This coal could have been supplied to other users who do not have captive blocks if production from the allotted coal blocks had started on schedule, a senior Coal India executive said.

“These plants were offered temporary coal supply contracts for three years on the understanding that they would be able to start coal production from their captive mines within the time frame.

These three-year supply contracts are scheduled to expire this year for all these plants and none of them has been able to start production from their captive blocks. Having failed to start production, they are now asking for extension of coal supply contract,” the executive said.

Source: ET ENERGYWORLD