Tariff-based bidding likely for future coal linkages
NEW DELHI: The government is looking at auctioning coal linkages — supply quota from mines — for future power stations through states via tariff-based bidding route. But industries in unregulated sectors, such as steel and cement where product price is market-determined, would have to compete for linkages in forward auction wherein the highest bidder would be the winner.
Top coal ministry officials said existing linkages to power stations would continue and would not be brought under the purview of auctions. “Under the present linkage system, a power plant may have FSAs ( fuel supply agreements) with multiple mines. Besides, the tariffs in PPAs (power purchase agreements) are based on linkage prices. There will be chaos if all the FSAs and PPAs have to be reworked,” one official said.