Union Government approves coal-linkage methodology for Independent Power Producers

The Union Ministry of Coal on May 16, 2018 approved the recommendations of the Inter-Ministerial Task Force (IMTF) unfolding the coal-linkage methodology for Independent Power Producers (IPPs).The task force was constituted to undertake a comprehensive review of existing coal sources of IPPs having coal linkages and consider the feasibility for rationalisation of these sources to optimise transportation cost.

Key Highlights:-

1. Under the coal linkage rationalisation, the coal linkage of a thermal power plant (TPP) of an Independent Power Producer may possibly be transferred from one coal company to another based on the availability during the fiscal. 2. The savings or profits achieved through this rationalisation will be passed on to the Discom or the consumer of the power.
3. The one time process of calling the IPP for coal linkage rationalisation will be undertaken jointly by Coal India Limited (CIL), Singareni Collieries Company Limited (SCCL) and Central Electricity Authority (CEA) in a transparent manner.
4. The coal linkage rationalisation will reduce the landed cost of coal due to reduction in transportation cost.
5. The Fuel Supply Agreement (FSA) of the rationalised source from any coal company would be signed only after the approval of the appropriate Electricity Regulatory Commission.
6. This process will be considered only for IPPs having linkages through allocation route. The IPPs will be required to state the Minimum Order Quantity (MOQ) for which the linkage rationalisation will then be requested.
7. Any dispute arising during the process would be resolved as per the provisions of the Arbitration and Conciliation Act, 1996.

Translate »