Coal Ministry to take CCEA nod for fuel supply to power projects

Coal Ministry to take CCEA nod for fuel supply to power projects

The Coal Ministry will seek the nod of CCEA for coal supplies to power projects with a total capacity of 30,000 mw as some of these plants are likely to get commissioned next fiscal. This assumes significance as the government is looking to provide round­the­clock power to everyone across the country. "Power projects with a capacity of 30,000 mw were given LOAs (Letter of Assurances) in 2009, 2010 and 2011.

The Coal Ministry will seek approval of the Cabinet Committee on Economic Affairs (CCEA) for conversion of these LOAs into fuel supply agreements," a source privy to the development said. Some of these projects are likely to go on stream in 2016­17, the source said, adding that the "some of them ( power plants) will also get commissioned in 2020 and beyond". Supply of coal is through legally enforceable fuel supply agreements (FSAs). New consumers need to approach the existing Standing Linkage Committee (LT) under the Coal Ministry for recommendation for issue of LOAs by coal companies, as per a provision of the New Coal Distribution Policy (NCDP).

LOA is issued on furnishing Commitment Guarantee followed by execution of FSA on fulfillment of LOA conditions in the stipulated period of time. Power producers with 30,000 mw had earlier approached the ministries of power and coal for early signing of FSAs to remove uncertainty and bring in clarity. These projects were not covered as part of the list of 78,000 mw of capacity for FSAs through a presidential directive issued after CCEA's nod during the UPA rule. CCEA had earlier asked Coal India to sign FSAs for a total capacity of 78,000 mw, including cases of tapering linkage, which are likely to be commissioned by March 31, 2015

Source: Economic TImes