Coal supply to power sector: MoP wants FSA regime to be deferred

In view of less-than-required coal availability from the Coal India Limited (CIL) sources, the Ministry of Power (MoP) has called on the Ministry of Coal (MoC) to defer the implementation of the fuel-supply-agreement (FSA) regime till the time the domestic coal major raises its coal-production capacity to meet the minimum fuel-requirement of the coal-based power plants (TPP). According to the MoP, in a situation when CIL is not able to make the required coal supplies, the supply of the indigenously-produced coal should be made via the easily alterable short-term linkages, rather than resorting to the annually fixed targets for coal supplies, under the FSA regime. Such a dispensation would facilitate an appropriate distribution of the available coal as per the requirement of the individual power plants, which varies from quarter to quarter, depending on seasonal variations. Further, this will ensure equal sharing of the coal deficit by the power plants, considering the fact that most of the thermal units would not be able to import 15% of their requirements, as stipulated by the coal ministry, since they have not been designed to run on coal with such high imported content.

Further, the MoP has requested the MoC to persuade CIL to supply atleast 40 million tonnes (MT) of additional coal, over and above its commitment of 360 MT, during 2011-12 fiscal for meeting the coal requirement of the power plants, for which FSAs have already been signed with the coal company. Our readers would recall that the MoP has already sought around 15 to 20 MT of additional coal from CIL-sources to the newly and soon-to-be commissioned plants over the course of the current 2010-11 fiscal. The power ministry has asked the MoC to utilize the 63 MT of coal, reportedly, available at various mine heads, for making the required dispatch to the power sector.