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Power Ministry seeks to revise tapering coal supply linkages

The Power Ministry has asked the Coal Ministry to consider converting short-term coal supply pacts into long-term linkages for power plants that could not start output at captive mines in the absence of approvals.
 
"Wherever coal blocks have been denied clearance due to wildlife or any other issues, MoC ( Ministry of Coal) may consider converting tapering linkages into long-term linkages," according to an official memorandum.

Such projects with captive mines were given short-term coal supply, which would be tapered over three years. As much as 75 per cent of the coal requirement would be supplied in the first year from the normative date for commencement of production, followed by 50 per cent in the second year and 25 per cent in the third year.

The Cabinet Committee on Economic Affairs (CCEA) had in June asked Coal India to enter into fuel supply pacts for a total capacity of 78,000 MW. Of the 78,000 MW, projects with a capacity of 11,000 MW have tapering linkages.

Some of the power projects are awaiting approvals from the Ministry of Environment and Forests for their captive mines.

"These projects shall not get adequate coal supply due to delay in getting MoEF clearance for coal blocks, putting the projects at the risk of becoming stranded," the memorandum said.

Source: The Economic Times