New supply policy for thermal power plants by March: Anil Swarup

As part of its efforts to reduce a growing coal stockpile, the government has decided to offer the fuel to thermal power units that do not have any supply contracts with Coal India. A policy on this would be readied by the end of March, coal secretary Anil Swarup said.

Speaking to reporters at the Asian Mining Congress in Kolkata on Wednesday, Swarup said the policy would outline the methods for supplying coal to power plants that do not have any supply agreement with Coal India. Supplies could start in early 2016-17.

Power plants with some 57,000 MW of installed capacity do not have any coal supply agreement or any supply commitment from Coal India. Of these, units with 9,000 MW capacity have already achieved commercial operation with coal received on temporary sources. The remaining units are in various stages of construction and will come up for commissioning from this year through 2020.

Some 6,000-7,000 MW of these projects already have power purchase agreements in place, but they do not have coal supply contracts from the state-run miner. Another set of 30,000 MW of power plants are in the pipeline and they have coal supply contracts in place.

“The current surplus supply situation is a temporary phenomenon and the government’s UDAY scheme aimed at improving the financial conditions and operational parameters of distribution companies is expected to help boost power demand in the next six months. As financial positions of discoms improve, they would be better placed to buy larger volumes of power. Increased power demand will fuel increased demand for coal,” the secretary said.

At present, discoms do not have the financial strength to buy additional power being generated. This situation has in turn damped power sale. CIL has achieved production growth of about 10% this year and power plants that have supply contracts with it are filled to the brim with coal.



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