9,044 MW power units yet to be issued LoI 3-month after coal

Nearly three months after coal was allocated to 10 companies for producing 9,044 MW of electricity under a new ambitious scheme, none of the power producers has been issued the letter of intent due to bureaucratic hurdles.

The Association of Power Producers, which represents the companies that were allocated coal linkages, has written three letters to Coal Minister Piyush Goyal and Cabinet Secretary P K Sinha since last month on “inordinate delay in issuance of Letter of Intent (LoI) by Coal India subsidiaries.” “Even after nearly three months, there is no clarity as to when LoI will be issued to the successful bidders,” the Association wrote to Goyal on December 7.

Under the new scheme to provide coal to private power units having firm power purchase agreements (PPAs) to supply electricity to states at a pre-decided tariff but not having long-term coal supply, 27.18 million tonnes per annum of coal was allocated to the 10 plants through an auction.

Coal India had conducted the auction for independent power producers with PPAs on September 11-12 where the bidder quoting a higher discount to its existing tariff would get the coal.

Adani Power, GVK Power, Bajaj Hindustan, GMR and Reliance Power quoted discounts in their power tariff in range of 1-4 paise per unit under the Scheme for Harnessing and Allocating Koyala Transparently in India (SHAKTI).

The 27.18 million tonnes per annum with tariff discounts going up to 4 paise per unit was “expected to result in an annual generation of over 47 billion units per annum from the linkage coal and a savings in tariff of approx Rs 125 crore per annum for period up to 25 years,” according to an official statement issued on September 15 after the auction.

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