Delay in signing coal supply MoUs hurting 6,000 MW capacity

 Delay in signing of agreements to source coal for short-term usage has left over 6,000 MW power capacity stranded as units await fuel supply.

“14 thermal power units of various thermal power stations in the states including Maharashtra, Andhra PradeshBiharJharkhand and Uttar Pradesh do not have coal supplies because MoUs (Memorandum of Understanding) have not been signed,” a Central Electricity Authority official told PTI.

These 14 units include four units — Simhadri unit-4 (500 MW), Sipat-3 (660 MW), Rihand-5 (500 MW) and Mauda-1 (500 MW) — of state-run NTPC.

The government has directed coal companies to supply fuel to power plants that have been commissioned this year through the MoU route till issues related to fuel supply pacts are resolved. The move was aimed at benefiting about 8,800 MW of electricity generation capacity that has come up in the first three months of 2012.

The Coal Ministry issued a directive to coal companies to supply coal to power plants commissioned till March 31, 2012 as well as those to be commissioned during 2012-13 through the MOU route as the FSAs (Fuel Supply Agreements) are getting delayed. An MoU is not a legally binding document.

“But MoUs for only about 2,000 MW capacity have been signed rest are yet to be signed,” he added. This leaves over 6,000 MW of capacity stranded.

The quantity of coal to be supplied to these power plants, under the MoU route, is being decided in consultation with the CEA till FSAs for these projects are signed.

State-run Coal India (CIL) is expected to take up the issue of FSAs to be signed with power firms in its board meeting scheduled next week.

CIL may also agree to supply between 65 and 80 per cent of the requirement of power companies, for which FSAs would be signed.

So far, only 27 power plants including that of LancoReliance and Adani, of 48 in all, have signed FSAs with the state-run coal giant.

Source:The Economic Times.

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