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Coal, power ministries slug it out over tapering linkages

The coal and power ministries have once again locked horns over tapering linkage, making coal supplies uncertain for 8,460 mw of various state-run utilities.



The coal and power ministries have once again locked horns over tapering linkage, making coal supplies uncertain for 8,460 mw of various state-run utilities.

The power ministry says that units aggregating generation of 8,460 mw are expected to get commissioned before the coal blocks allotted for the purpose become operational. So, these units need tapering linkage.

On the other hand, the coal ministry has, as a matter of policy, decided to stop tapering linkages to all plants that have been allotted coal blocks. So, making an exception at the power ministry’s request would create a situation where the demand for tapering linkages would rise. And, then, it would not be able to meet that kind of demand, a coal ministry official told fe.

The official said the Planning Commission, in its last meeting on linkage estimates for the 13th plan period, said tapering linkages were a disincentive to coal production as power producers tend to not develop their blocks fast if they are provided coal through this route.

According to the current practice, tapering linkages are given to power producers whose coal blocks are in the development stage. The linkage quantity is reduced in proportion to the coal produced from the block and, finally, it is withdrawn once the block gets fully developed.

“We are insisting that the 14 blocks allotted last year to various state-run power utilities start producing coal as soon as possible. Providing a tapering linkage to the state- run utilities that have been given coal blocks will be a dis-incentive to coal production,” Pratik Babu Patil, union minister of state for coal, said.

The coal ministry official said that in the plan panel meeting on March 13, the estimates of production for the 13th plan period were made factoring in the production from the newly allotted 14 blocks.

Source: The Financial Express