Coal news and updates

Govt directive on e-auction to impact small power producers

July 25: Small power producers who are dependent on the e-auction of coal by domestic coal producers will be badly affected by the government’s decision to cut down the e-auction limit by 25 million tons (mt) this year, industry sources said.

“Although the government decision is aimed at increasing supply to the power sector, it is going to hit companies like us that are mostly dependent on the e-auction sale to meet fuel requirements,” said a source in a power generation company procuring coal from e-auctions.

In fact, a large number of small power generators do not have linkages and find it hard to accommodate the cost of imported coal, the source said. Even companies that have signed fuel supply agreements with Coal India Ltd (CIL) are often not able to secure more than 60-70% of their contracted limits, he said.

CIL and Singareni Collieries Company Ltd (SCCL) offered around 47.6 million tons (mt) of coal through coaljunction in 2013-14. Of this, around 39.1 mt was sold.