Coal news and updates

Power firms await new coal linkage policy

Power producers have made a fresh appeal to the Centre to release a coal linkage policy soon.

They have argued the coal linkage policy announced by the previous UPA government had covered 78,000 MW to be commercially operational by March 31, 2015. It did not include capacity addition of another 78,000 MW, of which 20,000 MW have valid coal linkages, which are due to be commissioned in 2016-17 and beyond.

Union Minister for Power and Coal Piyush Goyal has said a new coal linkage policy will be declared soon. He, however, did not indicate a date.

''The fuel supply agreement policy framework announced earlier was limited to 78,000 MW, with the expected commercial operation date set at March 31, 2015,” said Ashok Khurana, director-general of the Association of Power Producers.

“For projects beyond 78,000 MW, there is no policy. These include projects with coal linkages, projects that lost mines due to the Supreme Court order, and projects that have have achieved their commercial operation date but have no coal,” he added.

Khurana said the absence of a coal linkage policy had caused uncertainty and the government must announce it at the earliest.

Access to coal is now provided “as is where is” or through e-auction. Power producers said it could not be a substitute for long-term coal supply. Power producers have long-term purchase agreements and need an assured minimum fuel supply to be able to quote a price.

A developer who is trying to complete a power project in central India pointed out power purchase agreements required producers to declare availability of 90 per cent coal, and there were penalties for mis-declaration.

Source: Business Standerd