The auction of coal linkages will be carried out as a separate window at frequent intervals at least twice a year
In a major relief to coal-based power generators, the Ministry of Power has issued draft methodology for allocation of coal under the SHAKTI policy. The methodology will be applicable to all coal-based thermal power plants including private generators.
The ministry in its draft methodology issued on August 21 said the auction of coal linkages will be carried out as a separate window at frequent intervals at least twice a year. This is to cater to the dynamic requirements and demand variations in the short term and day-ahead markets.
Coal India and Singareni Collieries Co (SCCL) will earmark coal from area or mine within a subsidiary in advance which may be allocated for use and they will initiate auction of coal linkages specifying quantum of coal available, quality of coal, source of coal, period for which such coal will be made available and with schedule to start coal supply.
METHOD CHANGE
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- The auction of coal linkages will be carried out as a separate window at frequent intervals at least twice a year
- This is to cater to the dynamic requirements and demand variations in the short term and day-ahead markets.
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Power Ministry sources told DNA that the quantity of coal linkage for the auction should be corresponding to the duration for which coal is offered at the rate of at least 2 million tonne per annum which corresponds to running 500 mw unit. CIL and SCCL may grant future coal linkages on an auction basis to power producers/independent power producers (IPPs) without power purchase agreements. All power plants without PPAs would be allowed to participate in the auction of coal linkage for the short-term period- maximum up to one year.
Association of Power Producers Director General Ashok Khurana said with the paucity of medium- and long-term PPAs, linkage for the short term would help developers about 15,000 mw which are without coal. ''For this move to become more effective, the government should also allow existing linkage holders to use their coal for short term and day-ahead market sales as recommended by high level empowered committee,'' he said.
In case of the commissioned capacities, fuel supply agreement will be signed with the successful bidders after auction process completion and if the power producer or IPP does not start drawing the coal within two years of submission of PPAs, the fuel supply agreement or the letter of approval will stand terminated.
According to power ministry sources, the power generated through allocated coal linkage will have to be sold in day-ahead market and intraday through power exchanges. Short-term power would be sold through a transparent bidding process.
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