Coal news and updates

CIL signs 144 FSAs as deadline ends

September 17: Coal India Ltd (CIL) has ended up signing as many as 144 fuel supply agreements (FSAs) with power plants, 29 less than the number suggested by the Ministry of Coal (MoC), within the deadline of September 16 for supplying coal to plants with total generation capacity of 66,000 MW, according to information provided to ICMW by an official at the Central Electricity Authority (CEA).

On September 6, ICMW had reported, quoting another CEA official, that CIL had, till September 5, signed a total of 150 FSAs for a total generation capacity of about 58,000 MW. Later on, ICMW had confirmed with CIL only to find that the number of FSAs was 138 and not 150 as reported.

The agreements till September 16 have been signed with power plants that have either come to operation after April 1, 2009 or will come to operation within March 31, 2015.

"The capacity of power plants with whom FSAs have been signed within the deadline of September 16 is roughly about 66,000 MW," the official said.

The ministry, through a second presidential directive in June this year, had asked CIL to sign 173 FSAs with total generation capacity of 78,000 MW by September 16, but all FSAs could not be signed because of various issues from the side of the power plants, a source said.

According to calculations by ICMW, a power plant with a generation capacity of 1,000 MW roughly needs about 5 mt of domestic coal annually. Going by this, the total requirement of coal for 66,000 MW generation capacities for which FSAs have been signed would be about 330 million tons (mt).

However, as CIL is signing FSAs to supply only 80% of the total coal requirement of a power plant, its total supply commitment would be about 265 mt of coal. Of this, around 50 mt will be imported coal and the balance 215 mt domestic coal as it will supply 15% of the total requirement through imported coal on a cost-plus basis and 65% through domestic coal.

This means CIL will supply around 215 mt of domestic coal to these 144 FSA consumers.

Meanwhile, ICMW learnt that of all the 144 FSAs, a few do not have backing power purchase agreements (PPAs) with distribution companies (discoms) or their commencement date (COD) is unlikely to be within March 31, 2015.

"The supplies to such power plants will not commence unless they have signed PPAs and, as such, as per current estimates, CIL is expected to supply coal for generation of only 52,000 MW," a source said.

Incidentally, CIL had earlier decided to sign FSAs only with those power plants which have PPAs in place, as per which, it had to supply coal only to 60,000 MW generation capacities, but the revised directive from the Ministry of Coal had asked CIL to sign FSAs with all plants irrespective of PPAs along with a condition that coal supplies to such plants would commence only when the PPAs are in place.