Creates two separate windows for stressed power cos; targets to sell extra 10 million tonne through online auctions
Profits of Coal India are set to get a boost with the government deciding to raise e-auction quantity by creating separate windows for stressed power companies without coal blocks or linkages.
"There are many power plants which are stressed and are starved of coal. For those who don't have linkage we are forming two e-auction windows, one for those who have Power Purchase Agreements and another for those without PPAs," coal and power minister Piyush Goyal said.
"Initially in both these windows we would start with five million tonne each and then we would expand it looking at the response we get from the first exercise," the minister said.
This 10 million tonne could be over and above the normal e-auction volume as Coal India is now producing enough coal.
"We have now surplus power. Where there are transmission capabilities, we would provide as much coal needed. Enough coal is available with power plants. So there is no risk of any power plants having shortage," Goyal told reporters at the sidelines of an event of Bharat Chamber of Commerce.
Coal India normally sells around 10% of its output through e-auction at prices which are at a steep premium over linkage prices. Higher e-auction volumes always go to boost the state-owned monopoly miner's bottomline.
During the early days of 2015, e-auction prices were reportedly 65% over notified or linkage prices. For those having PPAs, the bidding would start at Coal India price plus 20% as floor price. Those who don't have PPAs or only have short term agreement, bidding would start at Coal India price plus 40% premium.
"Both of these would be transparent processes through which everybody who don't have coal would have equal opportunity," the minister said.
This would however be a temporary solution till April by when the government is expected to come out with a framework which would be a permanent solution.
The stalled initiative to set up large sized power plants would soon get a boost with the Pratyush Sinha committee recently submitting its report on bid documents for Ultra Mega Power Projects.
"Final consultation and final deliberation is going on and would be finalised very soon after which we would restart the process of bidding for UMPPs," Goyal said.
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